Archive for the ‘Global Economy’ Category

7
Aug

The meltdown of the global order

Written on August 7, 2015 by Waya Quiviger in Global Economy

Just over a century ago, in a lecture to the Royal Geographical Society, British geographer Halford Mackinder laid out the fundamental tenets of a new discipline that came to be known as “geopolitics.” Simply put, he said, international relations boiled down to the intersection of unchanging physical geography with the vagaries of human politics. Only one constant was ever in that equation: “The social movements of all times,” he said, “have played around essentially the same physical features.”But here’s the thing: Today the “geo” in “geopolitics” is actually changing, chiseling away at one of the core principles that has guided foreign policy in the United States, Europe, and Asia for the past 100 years. Oceans and islands are appearing where they weren’t before, once-constant coastlines face a salty dissolution, and formerly fertile breadbaskets are doomed to be barren. So what do we do when both parts of Mackinder’s equation are in flux?

Read more…

Published by Keith Johnson on July 23rd in Foreignpolicy.com

28
Jul

El proyecto de reforma financiera emprendido por la Unión Europea tras el estallido de la crisis en 2008, ha venido experimentando diferentes avances. El más significativo hasta la fecha se produjo en 2012, cuando los gobiernos nacionales de los 28 estados miembros decidieron reunirse para formular un marco común de regulación y supervisión bancaria: la Unión Bancaria. Sin embargo, la comisión Juncker ha decidido ir más allá y embarcarse en un nuevo proyecto, que puede calificarse cuanto menos de ambicioso: formar una Unión de Mercados de Capitales en la Unión Europea. La intención de este proyecto es crear un mercado de capitales europeo fuerte y estable, que proporcione financiación al sistema complementariamente al sector bancario.

En Febrero de este año la Comisión decidió publicar un libro verde explicando la idea, con la intención de que los diferentes interesados pudieran transmitir sus objeciones y sugerencias. Hace poco más de un mes que expiró el plazo para expresar opiniones y actualmente dicho organismo está trabajando en la elaboración de un plan de acción que será presentado en septiembre. Jonathan Hill, el comisario europeo de Estabilidad Financiera, Servicios Financieros y Mercados de Capitales de la Unión, ha recalcado en numerosas ocasiones la importancia y los beneficios de este proyecto, que deberá estar completado para 2019.

Bolsa

Los beneficios de la creación de una unión de mercados de capitales para los 28 estados miembros están claros. Las empresas tendrán mayor acceso a numerosas vías de financiación y no serán tan dependientes del crédito bancario, que tanto se ha restringido tras la crisis, para financiarse. Además, el desarrollo de un mercado de capitales común y sólido aumentará la atracción de inversores extranjeros y promoverá una mayor estabilidad financiera. Por lo tanto, la puesta en práctica de este proyecto contribuirá al crecimiento de la Unión Europea y a su estabilidad. Read more…

Publicado el 28 de julio de 2015 en http://blogs.elpais.com.

Carmen Múgica, Master en Relaciones Internacionales en la IE Escuela de Relaciones Internacionales y colaboradora de la Fundación Alternativas.

27
Jul

EL CHACO, Ecuador — Where the Andean foothills dip into the Amazon jungle, nearly 1,000 Chinese engineers and workers have been pouring concrete for a dam and a 15-mile underground tunnel. The $2.2 billion project will feed river water to eight giant Chinese turbines designed to produce enough electricity to light more than a third of Ecuador.

Near the port of Manta on the Pacific Ocean, Chinese banks are in talks to lend $7 billion for the construction of an oil refinery, which could make Ecuador a global player in gasoline, diesel and other petroleum products.

Across the country in villages and towns, Chinese money is going to build roads, highways, bridges, hospitals, even a network of surveillance cameras stretching to the Galápagos Islands. State-owned Chinese banks have already put nearly $11 billion into the country, and the Ecuadorean government is asking for more.

Ecuador, with just 16 million people, has little presence on the global stage. But China’s rapidly expanding footprint here speaks volumes about the changing world order, as Beijing surges forward and Washington gradually loses ground.

While China has been important to the world economy for decades, the country is now wielding its financial heft with the confidence and purpose of a global superpower. With the center of financial gravity shifting, China is aggressively asserting its economic clout to win diplomatic allies, invest its vast wealth, promote its currency and secure much-needed natural resources.

It represents a new phase in China’s evolution. As the country’s wealth has swelled and its needs have evolved, President Xi Jinping and the rest of the leadership have pushed to extend China’s reach on a global scale.

China’s currency, the renminbi, is expected to be anointed soon as a global reserve currency, putting it in an elite category with the dollar, the euro, the pound and the yen. China’s state-owned development bank has surpassed the World Bank in international lending. And its effort to create an internationally funded institution to finance transportation and other infrastructure has drawn the support of 57 countries, including several of the United States’ closest allies, despite opposition from the Obama administration.

Even the current stock market slump is unlikely to shake the country’s resolve. China has nearly $4 trillion in foreign currency reserves, which it is determined to invest overseas to earn a profit and exert its influence.

China’s growing economic power coincides with an increasingly assertive foreign policy. It is building aircraft carriers, nuclear submarines and stealth jets. In a contested sea, China is turning reefs and atolls near the southern Philippines into artificial islands, with at least one airstrip able to handle the largest military planes. The United States has challenged the move, conducting surveillance flights in the area and discussing plans to send warships. Read more…

8
Jul

 What Are the Geostrategic Implications of a Grexit?

At the the moment, it is unclear how Greece will ultimately fare in the current duel of wills with the Troika over its technical default, the upcoming referendum, and the possibility of a continuation of the long-running bailout drama. The two sides are locked in acrimonious finger-pointing, Greek banks are shuttered for the week, and the logical but ever elusive diplomatic and economic solution — a reasonable negotiation between the parties — seems further away than ever. As a proud Greek-American, I am saddened by the situation.

Meanwhile, the July 5 referendum is judged too close to call at the moment, and most Greeks will likely be confused about the implications and uncertain how to vote. Macroeconomic theory appears to have been the first casualty of the process, and the doomsday economic scenarios — a crashed Greek economy, a battered if not broken euro, and a deeply shaken European project — are looming large on the horizon.

But in the midst of all of the appropriate Sturm und Drang of the Greek financial and economic crisis, it is worth considering the geostrategic implications of the “Grexit” — which have been largely ignored.

Let’s face it: A Greece that goes crashing out of the eurozone will be an angry, disaffected, and battered nation — but one that will continue to hold membership in the European Union and NATO, both consensus-driven organizations. (“Consensus-driven” means that without unanimous consent among all members, the organization cannot take decisions or execute effective operational actions.) Many times in NATO councils as the supreme allied commander I watched the agonizing process of building consensus, one compromise at a time. In both the EU and NATO, an uncooperative Greece in the future could time and time again put the organizations “in irons,” which is to say becalmed and not moving effectively forward.

This could manifest itself very quickly in, for example, decisions about sanctions against Russia (from which Greece is avidly courting support and funding, logically enough). It could easily affect day-to-day governance in the European Union over issues from negotiating the Transatlantic Trade and Investment Partnership to agricultural subsidies to what should be done about refugee flows across the Mediterranean. Greece could become a troublesome and obstructionist actor in complex negotiations involving the EU, such as the Iranian nuclear treaty efforts.

 Read more…

James Stavridis is a retired four-star U.S. Navy admiral and NATO supreme allied commander who serves today as the dean of the Fletcher School of Law and Diplomacy at Tufts University. He recently gave a well attended seminar at the IE School of International Relations.

 

Published on 1 July, 2015 in http://foreignpolicy.com/

30
Dec

Four EU countries in top 10 world economies

Written on December 30, 2014 by Waya Quiviger in Global Economy, News

BRUSSELS – Four European countries are in the world’s 10 largest economies, according to research by the Centre for Economic and Business Research.

The annual World Economic League Table 2015 published on Friday (26 December) by the London-based think tank puts the US as the world’s main economic powerhouse, followed by China and Japan.

Germany, the UK and France take the fourth, fifth and sixth spots, respectively, with Italy, in the eighth place, the only other EU country in the top 10.

The UK has edged ahead of France into fifth place in this year’s rankings, although the Cebr comments that the $1 billion (€850 million) gap in output between the two countries is “well within the margin of error” and would likely be extinguished if France’s markets in drugs and prostitution, which “may prove to be ‘larger than their British counterparts”, were included.

In June, the UK economy received a statistical boost of £65 billion (€80 billion) following the introduction of new EU accounting rules allowing the so-called ‘grey economy’, which includes proceeds from drug trafficking and prostitution, to be recorded.

Meanwhile, Russia is the main loser in the new list, dropping from eighth place to tenth in the rankings, with Cebr chief executive Douglas McWilliams suggesting that Moscow’s role in the ongoing Ukraine conflict was a factor in the country’s economic decline.

“The fun of the world economic league table is that it brings things back to hard figures,” said McWilliams.

He added that “countries like Russia and Argentina, who have invaded neighbouring countries and whose leaders spout aggressively nationalistic rhetoric, are brought down to earth by their falls in the league table as their economies collapse”.

The Russian economy is poised to endure a 4.5 percent recession in 2015 as a result of falling oil prices and the effects of western sanctions.

Last week the country’s central bank was forced to spent around €3 billion of its foreign currency reserves to prevent a run on the rouble currency.

But the next 15 years are likely to be about the continuing rise of some of the ‘Bric’ countries – Brazil, Russia, India, and China.

China is projected to overtake the US by 2025 as the world’s largest economy, the Cebr forecasts, while the “unstoppable” rise of India will see it become the world’s third-largest economy by 2024.

In Europe, meanwhile, Cebr predicts that Germany’s ageing and declining population, coupled with the weakness of the euro, will allow the UK to overtake it by 2030.

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