If you belong to those who wondered about an unintelligible error message when visiting our website, here comes a short explanation of our recent black out.
Today and tomorrow, the German EU Presidency runs a conference on “Fiscal policy challenges in Europe”. The opening session this morning brought together several hundred participants from all over the EU to listen to the current Ecofin President, Peer Steinbrück, and EU-Commissioner Joaquín Almunia. All Thursday and Friday are devoted to high-ranking expert panels on the question how to ensure the quality and long-term sustainability of public finances. You can find the programme and the contributions here.
Last week the German chemical workers unit and the corresponding employers' federation settled for a deal to raise wages by 3.6% plus a one-off payment of 13 times 0.7% the average monthly earnings. The settlement includes some 550,000 employees in the sector. Some commentators have concluded that this means wages are to rise 4.3%. Well, wage round arithmetic is a bit more complicated than this. The deal runs over a total of 14 months and the last round (in 2005) already included a one-off component. One-off components need to be repeated to the same extend in every single round just to keep settlements stable, so one must not include them into a back of the envelope calculation of wage increase. So on an annual basis our own calculations arrive at a growth rate of earnings in the German chemicals industry of 3.1 to 3.3% on an annual basis.
We are inviting submissions for the following conference:
The Eurozone under stretch
Analysing regional divergences in EMU: facts, dangers and cures
Conference date: June 19, 2007
Venue: Berlin, SWP – German Institute for International and Security Affairs
The German Institute for International and Security Affairs (Stiftung Wissenschaft and Politik SWP), the Arbeitskreis Europäische Integration (AEI) and RGE Monitor organize a one-day workshop on economic divergences in the European Monetary Union (EMU). The conference brings together top researchers (economists, political economist, political scientists) and practitioners working on economic governance of the Eurozone in order to provide a state-of-the art analysis of the magnitude and consequences of economic divergence in the EMU, to assess the capacities of the current governance structures to deal with regional divergences and to discuss potential ways forward to improving the governance mechanisms in the EMU.
From a foreigner’s point of view it comes as quite a surprise that EMU governance in general and bashing of ECB interest rate policy in particular is such a persistent feature of the current French electoral campaign. While it is difficult to argue that economic data emanating from France have gone through the roof recently, they do not seem to be dismal either. Rather the French economy has over the past few years as well as over the most recent past maintained a growth momentum of roughly 2 % on average. The only thing that has effectively changed, is that this kind of growth momentum has been above EMU average up to 2005 and is now a wee bit below this average. And what is more and stands out in contrast to, say Italy, is that there is virtually no evidence of some major economic problem on the sectoral side of the economy such as a bloated textile sector that keeps aggregate economic performance on a subpar trend. So why all the fuss in the French electoral debate about inappropriate monetary policy?
For months now, European manufacturers and European politicians have complained over an overly cheap yen. While the euro had been rather stable relative to the US dollar, the yen has continued to lose against the euro over much of 2006, losing another ten percent on top of the more than 30 percent the Asian currency had already lost since the end of the New Economy bubble in 2001. Altogether Japan has thereby depreciated so much that travellers going to Tokio now regularly report that the city “isn’t really that expensive” and that if you stick to simple eateries “you don’t spend more money than in Berlin” – by itself remarkable given that Berlin is much cheaper than other European capitals. Of course, this has also consequences for manufacturing industries: The recent problems of European car makers are surely to a good part related to the improvement in competitiveness of their main competitors by 40 percent.
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