Saturday, 27 October 2012

Concluding remarks of Conference of the European Economic and Social Committee “Restoring stability, trust and confidence in Europe: civil society for a new form of governance” 16th of October 2012

great conference by the EESC in Cyprus, which was sadly poorly attended. I was given the honour to close the conference and took the chance to talk about both the issue of the day (CSO as a way to increase accountability in Europe's decision making).

Here is the summary report.  In belief of Creative Commons, I have decided to post their presentations online. But remember, using them as your own is plagiarism, and theft - ask me or cite me!
--------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Civil society and accountability in Cyprus. Position in Europe and Abroad


I was invited to be part of a panel on governance in Cyprus in the 2012 PRIO conference in Cyprus. It was a very good panel with lively conversation.  I got very good feedback for a new research project in term of transparency in CSOs. My presentation was on the civil society organizations (CSO) in Cyprus in response to the desire of the Cyprus presidency to push for greater CSO participation in Europe. In short: the republic of Cyprus should do at home what it preaches abroad.  

Here is the presentation. In belief of Creative Commons, I have decided to post their presentations online. But remember, using them as your own is plagiarism, and theft - ask me or cite me!
--------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

The 1931 October crisis and the great depression: Japan Presentation


Following from my conviction for the open source ideal here is the presentation I did for the first Asian Economic History Conference that was hosted by the Hitotsubashi University in early September. The conference was one of the best I ever attended and the presentations were of top quality.

The comments allowed me to make great progress. I just wish i had time to push these ideas further.
Here is the presentation. n belief of Creative commons, i have decided to post their presentations online. But remember, using them as your own is plagiarism, and theft - ask me or cite me!

--------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Powerpoint on support of Erasmus: Why the single market works especially for youth

This was a powerpoint that i had ready for the commemoration of the single market and the Erasmus programme on the 12th of October. Sadly I woke up with no voice and missed it, since I really wanted to both show why the Single market works as the idea of the EU is under threat. I have also participated in Erasmus and I am a great  supporter of the project, which now has its funds viciously cut.

Here is the presentation, not given due to my lack of voice!

In belief of Creative commons, i have decided to post their presentations online. But remember, using them as your own is plagiarism, and theft - ask me or cite me!


--------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Thursday, 25 October 2012

Krugman appreciates economic history

Another excellent post on how 1930 multipliers are almost identical to current IMF estimates  suggesting a little stimulus perhaps mixed with some inflation will not hurt. I am less sure of this as a policy in southern Europe, were the governance system needs an overhaul in order to make stimulus effective, but glad to see Krugman inappropriate the research of economic historians.

It also speaks wonders for Demetriades, the Governor of the Cypriot Central bank, who is battling the IMF on arguing that the multiplier of fiscal spending cuts will not be 0.4 as the IMF suggests (which is insanely low, leading us to an underestimation of the GDP fall, but closer to 1.4. That is a battle of technicalities that can have such wide reprecussions that it is worth fighting for: well done to Dr. Demetriades for making a stand, and for using own IMF research to fight the low multiplier with.
--------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Monday, 15 October 2012

The last and most colourful "larger than their country" Leaders is dead: King (Prince) Shianouk

Decolonization brought forth an era of leaders who held their own citizens in a not so democratic “hero worship” and who could capitalise on the cold war by projecting greater power than they really had. The non aligned movement in the 1960s was exactly the personification of such larger than life characters, each of them having the ability though the combination of their colourful personalities, their willingness to flirt with both superpowers and their hero worship at home linked to decolonization.

 Makarios of Cyprus was one them: there are people who might not know where Cyprus is but they know Makarios. The last and most wily just past away today, managing to cheat death up until today. You could never pin King Sihanouk down: was he a plaything of the west, a die hard communist Khmer Rouge, a playboy, or an extravagant leader who wasted his countries resources on grand movies while the Vietnam war was spilling over in Cambodia? The truth is that he was all of the above and none of the above at the same time.

Trained by France he was diplomatic enough to accept Japan's terms during the Second World War while not looking like an enemy of the victorious allies. He brought independence to Cambodia while remaining an ally of France, and he undermined democracy by becoming prince for life while bringing the first elections. He brought in China and North Vietnam in the country after huge pressure to create alternative supplies to the Vietnam conflict. Instead of building an army to fend off a conflict he spent significant time on his hobbies of directing films and jazz.

He made Hollywood type movies in Cambodia about the glorious past of his lineage while people where in dire living conditions. He made a city after his name. At the same time although basking in privilege and extravagance he made public announcements of the greatness of Maoism (remember Makario's a head of an Autokefalous Church, claiming to be a socialist?). Prince Shianouk increased the influence with China while suppressing the left in his country and while he was still part of the French alliance! He claimed that that was the only way his country could stay out of the increasingly brutal and globalized Vietnam War that was raging all around Cambodia. Expelled and replaced by a pro west regime, the fate of Cambodia as a brutal side show of the Vietnam was ensured.

Bitter, Prince Sihanouk supported the Khmer Rouge, the most brutally genocidal regime, and was critical in their early success in recruiting fighters. Meanwhile he was living in a palace build to him in North Korea in isolation but in extreme decadence, having jazz parties and watching the movies he created. He entered with the Khmer victorious, only to stand helpless as the Khmer launched a policy of mass extinction and death of over 1.7 million dead Cambodeans. Prince Sihanouk never blamed himself for this tragedy he helped create and would work with the Khmer again to allow him to wield influence.

 His desire to be on the centre stage meant that being a glorified pawn of the communist Khmer Rouge was not going last. He was quickly deposed from all ceremonial dues and was not shot due to his global presence, and he sought refuge in China and North Korea. Despite that he was instrumental in maintaining Khmer Rouge power in the UN after they were expelled from the country by Vietnam and became financially supported by the USA who wanted to contain Vietnamese expansion.

He was brought back as a ceremonial head in 1992 when the Khmer guerrillas were effectively defeated diplomatically. In another turn he then created a party that supported in a coalition the Vietnam backed leader of the party Hun Sen. Yet he chose to abdicate in 2004 as he felt his given the role was too restrictive under the autocracy and new “hero worship” created towards the true leader of Cambodia, Hun Sen. He once more caused a storm as there was no abdication procedure in the fragile constitution created after the peace agreements.

 Here they are all leaders of the decolonised world, the last of them meeting them in death.

 Photograph caption: BELGRADE, YUGOSLAVIA: Delegations' chiefs pose 05 September 1961 at the end of the conference of the unaligned countries in Belgrade. (Fron R to L: Josip Broz Tito (1892 - 1980), president of Yugoslavia, Prince Hassan ibn Yahya (1908 - 2003), permanent representative of Yemen in the UN, Prince Norodom Sihanouk of Cambodia, Saeb Salam (1905 - 2000), Premier of Lebanon, Aden Abdullah Osman Daar, president of Somalia, Ibrahim Abboud (1900 - 1983), president of Sudan, Sheikh Ibrahim Suwaiyel, minister of Foreign Affairs of Saudi Arabia, Archbishop Makarios (1913 - 1977), president of Cyprus, King Hassan II of Morocco (1929 - 1999), Sirimavo Bandaranaike (1916 - 2000), Premier of Ceylon, Habib Bourguiba (1903 - 2000), president of Tunisia, Ahmed Sukarno (1901 - 1970), president of Indonesia, Osvaldo Dorticos Torrado (1919 - 1983), president of Cuba, Kwame Nkrumah (1909 - 1972), president of Ghana, Gamal Abdel Nasser (1918 - 1970), president of the United Arab Republic of Egypt, Emperor Haile Selassie I of Ethiopia (1891 - 1975), Sardar Mohammad Daud Khan (1909 - 1978), Premier of Afghanistan, Modibo Keita (1915 - 1977), president of Mali, Jawaharlal Nehru (1889 - 1964), Premier of India, Hashim Jawad (1911 - 1972), Minister of Foreign Affairs of Iraq, King Mahendra Bir Bikram of Nepal (1920 - 1972), Youssef ben Khedda (1920 - 2003), president of the provisional Algerian government, Louis Lansana Beavogui (1923 - 1984), Minister of Foreign Affairs of Guinea, Cyrille Adoula (1921 - 1978), Premier of the government of Democratic Republic of Congo, Antoine Gizenga, vice-president of the government of the Democratic Republic of Congo, U Nu (1907 - 1995), premier of Burma). AFP PHOTO (Photo credit should read AFP/Getty Images)

Sunday, 14 October 2012

An exceptionally good article by George Prokopis Advising Cyprus to accept the IMF proposals

What has been missing from all the analysis of the IMF plan an government counter proposals is a serious and deep analysis regards to other bailout plans. Up to now Greece is seen as what could happen to Cyprus - but Greeks see the situation correctly and argue that Cyprus can still have viable debt and hence should get the loan and as soon as possible. The best comment is on the Russian loan: even if it was given, as the interest would be at 5% rather than 1.8% then the deficit reduction measures should be at least 20% more severe. Bravo Politis: it has been a while since you had a good econ article! Τρέξε Κύπρος, τρέξε! του Γιώργου Προκοπάκη Γιώργος Προκοπάκης, γράφει σήμερα αποκλειστικά για τα «Αυτονόητα» του Πολίτη.• Η Κύπρος, με το σχέδιο του Μνημονίου πάνω στο τραπέζι, βρίσκεται μπροστά σε μια κρίσιμη επιλογή: πώς θα διαχειρισθεί τα προβλήματα που έχουν ανακύψει από την κρίση. Πρέπει πρώτα απ’ όλα να γίνει κατανοητό ποιά είναι τα χαρακτηριστικά του προβλήματος. Ελλοχεύει ο κίνδυνος της μεταφοράς στο νησί της διελκυστίνδας για το ελληνικό Μνημόνιο – ιδεολογικά φορτισμένης και αδιέξοδης. Η έξοδος από την κρίση σε καμιά περίπτωση δεν θα είναι μια ευχάριστη βόλτα στο πάρκο. Δεν υπάρχουν εύκολες ή μαγικές λύσεις. Απαιτείται διαχειριστική ικανότητα, αποφασιστικότητα, σκληρή δουλειά και πάνω απ’ όλα το χτίσιμο της ευρύτερης δυνατής κοινωνικής συναίνεσης. Αναγκαία προϋπόθεση είναι η ειλικρίνεια, η δίκαιη κατανομή των βαρών στην κοινωνία και η προστασία των πολιτών που πλήττονται βαρύτερα. Το πρόβλημα Το κυπριακό πρόβλημα, αντίθετα με το ελληνικό το οποίο είναι πρόβλημα βιωσιμότητας τους χρέους (solvency), είναι πρόβλημα ρευστότητας (liquidity). Ο διατραπεζικός δανεισμός σε όλη την Ευρώπη έχει πρακτικά πεθάνει εδώ και τρία χρόνια – μαζί του και πολλές αγορές κρατικού χρέους. Για τις ελλειμματικές οικονομίες, η ασφυξία ήταν ζήτημα χρόνου. Η έκθεση των κυπριακών τραπεζών στα ελληνικά ομόλογα και τα επισφαλή δάνεια - που όλοι ήξεραν αλλά όλοι είναι έκπληκτοι σήμερα – επιτάχυναν ίσως την εμφάνιση του προβλήματος. Η έκρηξη των πυρομαχικών και οι επιπτώσεις της στην οικονομία εξανέμισαν κάθε ελπίδα διαχείρισης αναβάλλοντας αποφάσεις, σπρώχνοντας τα προβλήματα κάτω από το χαλί. Η ρητορική που χρεώνει τα πάντα στις τράπεζες και τους τραπεζίτες, ακόμη και εάν δεχθούμε ότι σωστά βάζει το δάχτυλο στο ένα και μοναδικό πρόβλημα, δεν προσφέρει καμία διέξοδο. Μια ελλειμματική οικονομία είναι υποχρεωμένη να δανείζεται για να καλύπτει το έλλειμμα και να αναχρηματοδοτεί το χρέος της – αλλιώς χρεοκοπεί. Το πρόβλημα των 2 ή 3 δισ € των τραπεζών είναι προσδιορισμένο και περιορισμένο. Έκπληκτοι οι πολίτες μαθαίνουν προ μερικών μηνών πως το (μικρό, ας πούμε) πρόβλημα των τραπεζών χρήζει θεραπείας με δανειακή σύμβαση και Μνημόνιο πολυ-πολλαπλάσιου μεγέθους. Αναρωτιούνται «πώς μπορεί να συμβαίνει αυτό μετά το ρωσικό δάνειο; – διάολε όσο είναι το τραπεζικό πρόβλημα δανειστήκαμε από τον Πούτιν». Δυστυχώς, για όσο χρονικό διάστημα η χώρα δεν μπορεί να δανείζεται από τις επάρατες αγορές, κάποιος πρέπει να της καλύπτει τα ελλείμματα και να πληρώνει τις λήξεις των δανείων. Η χώρα εκτός από χρήματα έχει ανάγκη από ένα πρόγραμμα προσαρμογής. Ένα πρόγραμμα που θα μειώσει τα ελλείμματα – άρα δεν θα αυξάνει το χρέος – και θα επιτρέψει στη χώρα να ξαναβγεί αυτόνομα στις αγορές να αναχρηματοδοτεί το χρέος της. Το πρόγραμμα αυτό ή θα το αποφασίσουν οι Κύπριοι μόνοι τους ή θα το επιβάλλουν οι δανειστές. Υπάρχει βέβαια και τρίτη επιλογή: δανεισμός (αν υπάρχει πρόθυμος δανειστής) χωρίς προσαρμογή – η βέβαιη καταστροφή μετά από κάμποσο καιρό! Οι επιλογές Για να γίνουν κατανοητές οι επιλογές, ας επιχειρήσουμε να ποσοτικοποιήσουμε ένα μέρος του ζητήματος. Η Ελλάδα με το δεύτερο μνημόνιό της δανείζεται από την τρόικα με επιτόκιο κάπου 1.8%. Η Κύπρος δανείζεται διακρατικά και με βραχυχρόνιο εσωτερικό δανεισμό (τράπεζες) με επιτόκιο τουλάχιστον 5%. Για το ευτελές ποσόν των 5 δισ €, η διαφορά του επιτοκίου βαρύνει τα δημόσια οικονομικά της Κύπρου με πρόσθετες δαπάνες για τόκους περίπου 180 εκατ € ετησίως. Περίπου το 20% της ετήσιας προσαρμογής που ζητάει η τρόικα με το σχέδιο του Μνημονίου. Αυτό πολύ απλά σημαίνει πως, εάν η κυπριακή κυβέρνηση έχει εναλλακτική πηγή δανεισμού και είναι αποφασισμένη να συμμαζέψει την οικονομία, το δικό της πρόγραμμα πρέπει να είναι κατά 20% πιο σφιχτό για να έχει το ίδιο αποτέλεσμα! Στο σχέδιο Μνημονίου που της προτάθηκε, η κυπριακή κυβέρνηση απάντησε με το δικό της Μνημόνιο. Η κυπριακή αντιπρόταση (μεγαλύτερης διάρκειας, οπισθοβαρές) φαινομενικά επιδιώκει ήπια προσαρμογή. Τα ζητήματα αποτελεσματικότητας των μέτρων της αντιπρότασης, ιδίως στο πρώτο μισό του προγράμματος θα τεθούν υποχρεωτικά. Είναι προφανές πως ένα μέτρο βέβαιης αποτελεσματικότητας νωρίς στο πρόγραμμα «συσσωρεύει» δημοσιονομικό όφελος καθ’ όλη τη διάρκεια του προγράμματος. Η αντικατάστασή του με μέτρα μικρότερης απόδοσης και αβέβαιης αποτελεσματικότητας είναι βέβαιον πως είτε θα οδηγήσει το πλοίο στα βράχια είτε θα απαιτήσει πολύ μεγαλύτερου κοινωνικού κόστους μέτρα αργότερα. Ένα πραγματικό πρόβλημα δεν λύνεται με λογιστικά τερτίπια. Η σημασία της ταχύτητας Να θυμίσω την ιστορία με τα προβλήματα του Καναδά πριν 15 περίπου χρόνια. Εφαρμόσθηκε μια προσέγγιση που αργότερα ονομάσθηκε «αναπτυξιακή λιτότητα». Βασικό χαρακτηριστικό: άμεση λήψηόλων των μέτρων και απαρέγκλιτη εφαρμογή τους. Προφανώς χτυπήθηκαν νοικοκυριά – κάποια βάρβαρα. Προφανώς χτυπήθηκαν επιχειρήσεις – κάποιες έκλεισαν. Όμως το πλαίσιο ήταν καθαρό από μιας αρχής, για την οικονομία της χώρας, τους επενδυτές και τους δανειστές, και σε έξι μήνες τα πράγματα ομαλοποιήθηκαν. Η Κύπρος είναι μια μικρή οικονομία. Το ΑΕΠ της χώρας είναι μικρότερο από το ελληνικό πρωτογενές έλλειμμα του 2009! Το πρόβλημά της είναι περιορισμένο σε σύγκριση με το ελληνικό και κυρίως διαφορετικό. Θα είναι έγκλημα να αυτοκτονήσει η χώρα μεταφέροντας στο νησί μια ιδεολογική και εν πολλοίς άσχετη διαμάχη. Το συμφέρον του κυπριακού λαού είναι να βγει το συντομότερο δυνατόν από το πρόβλημα και όχι να το αφήσει να σέρνεται και να διογκώνεται. Η κυπριακή οικονομία στηρίζεται σε μεγάλο βαθμό στην τουριστική της βιομηχανία και το ρόλο της ως χρηματοπιστωτικού κέντρου. Ακόμη και εάν υποθέσουμε πως ο τουρισμός παραμένει αιμοδότης της οικονομίας, η παράταση της αστάθειας είναι σχεδόν βέβαιο πως θα πλήξει, ανεπανόρθωτα ίσως, τον άλλο πυλώνα. Η «ήπια» προσαρμογή που σώζει μερικές εκατοντάδες θέσεις εργασίας στο δημόσιο, ή επιχειρεί να διατηρήσει την αυτόματη τιμαριθμική αναπροσαρμογή, βάζει σε κίνδυνο όλη την κυπριακή οικονομία. Η παράταση της κρίσης είναι βέβαιο πως θα πλήξει κυρίως τη μεσαία τάξη. Αφ’ ενός λόγω της μείωσης του διαθέσιμου εισοδήματος, κυρίως όμως λόγω της κατάρρευσης των αξιών (π.χ., ακίνητα) και της υπερέκθεσης σε τραπεζικό δανεισμό. Αν συμβεί κάτι τέτοιο, το πρόβλημα και οι ουρές του θα ταλανίζουν την κυπριακή κοινωνία για πάρα πολλά χρόνια. Το συμφέρον της κυπριακής κοινωνίας είναι να προδιαγραφεί μια συνολική, ριζική και άμεση λύση. Μια κυπριακή αναπτυξιακή λιτότητα! Αυτό σημαίνει τάχιστη παρέμβαση της Κεντρικής Τράπεζας και της ΕΚΤ στο ξεκαθάρισμα των προβλημάτων του τραπεζικού τομέα. Η ανακεφαλαιοποίηση των τραπεζών και η παροχή ρευστότητας, όσο κι αν χτυπάει στα αντικαπιταλιστικά αντανακλαστικά μας, είναι μέγιστη προτεραιότητα εάν η επιθυμία είναι η τάχιστη αναθέρμανση της οικονομίας. Στη διαδικασία αυτή μπορεί να συνεκτιμηθεί και το πρόβλημα υπερδανεισμού των πολιτών. Το πρόγραμμα προσαρμογής, ανεξαρτήτως πατρότητας, γίνεται όσο περισσότερο δυνατόν εμπροσθοβαρές. Καθήκον της πολιτικής ηγεσίας είναι να επιδείξει την απαιτούμενη γενναιότητα, να σταθεί πίσω από το πρόγραμμα και να κερδίσει την εμπιστοσύνη των πολιτών. Βέβαια, απαιτείται και κάτι ακόμη: μέχρις ότου ξαναπάρει μπροστά η οικονομία, να ελαχιστοποιήσει τις επιπτώσεις, ειδικά στους πιο αδύνατους πολίτες. Χωρίς πόρους και παρεμβάσεις δεν προστατεύεται κανείς Η προστασία των πληττομένων είναι το προσφιλές άλλοθι των πολιτικών για να μην κάνουν τίποτε. Είναι, θα πείτε, και όποιου προσπαθεί να «πουλήσει» αναπτυξιακές λιτότητες και άλλα τέτοια. Χωρίς πόρους και χωρίς παρεμβάσεις δεν προστατεύεται κανείς! Ας βρούμε λοιπόν εκείνες τις παρεμβάσεις που κάτι μπορεί να κάνουν και τους πόρους που απαιτούνται. Πρώτα απ’ όλα, είναι αδιανόητο, σε περίοδο κρίσης ειδικά, το κοινωνικό κράτος να αναδιανέμει πόρους με «οριζόντια» κριτήρια (π.χ., πολύτεκνοι) και όχι εισοδηματικά. Είναι υποχρέωση της πολιτείας προς την κοινωνία να αλλάξει άμεσα τις αναδιανεμητικές προτεραιότητες του κοινωνικού κράτους. Είναι παράλογη η άμεση ή έμμεση επιδότηση επιχειρήσεων από κοινωνικούς πόρους όταν ο φορολογικός συντελεστής είναι 10%. Είναι παράλογη η ισότητα συμμετοχής στις ιατροφαρμακευτικές υπηρεσίες πλουσίων και φτωχών. Οι πόροι που πάνε σε δράσεις ελάχιστης κοινωνικής αποτελεσματικότητας με τον φερετζέ της κοινωνικής πολιτικής είναι πολλοί. Πιθανότατα δεν φθάνουν όμως. Πιθανότατα δεν απαντούν και στα προβλήματα της μεσαίας τάξης. Ας βρούμε λοιπόν κι άλλους πόρους. Αν η προδιαγραφόμενη λύση είναι πειστική με μικρό ορίζοντα εφαρμογής των περιοριστικών μέτρων, ένα συστατικό της λύσης μπορεί να είναι η χρονική μετάθεση των ανελαστικών υποχρεώσεων των πολιτών – κυρίως των υποχρεώσεων προς χρηματοπιστωτικά ιδρύματα. Οι δανειακοί διακανονισμοί με ελάφρυνση των υποχρεώσεων των οφειλετών για μια περίοδο τριών έως πέντε ετών, είναι εφικτοί και εν πολλοίς επιθυμητοί από τις ίδιες τις τράπεζες – έναντι του πολλαπλασιασμού των μη εξυπηρετουμένων δανείων και της κατάρρευσης αξιών, άρα και εγγυήσεων. Δεν είναι ζήτημα νομοθετικής ρύθμισης αλλά συναινετικής προσέγγισης στη διαδικασία ανακεφαλαιοποίησης. Συναινετική μεταξύ των τρόικας, ΕΚΤ, τραπεζών και κυβέρνησης. Che fece,,, il gran rifiuto Ας πάμε ακόμη παραπέρα. Ακούγεται συχνά για το ασφαλιστικό σύστημα η αυτομαστιγωτική φράση που χαϊδεύει αυτιά: «υποθηκεύουμε τις μελλοντικές γενεές». Αληθινή, αλλά άχρηστη εάν δεν συνοδευτεί από διορθωτικές δράσεις. Η κατάσταση είναι αρκετά κρίσιμη ώστε να αξίζει τον κόπο να εξετασθεί η εναλλακτική «να δανεισθούμε από τις μελλοντικές γενεές». Δανεισμός λελογισμένος, με διαφάνεια, με προσδιορισμένους στόχους και με ανάληψη υποχρέωσης εξώφλησης. Το κοίτασμα φυσικού αερίου είναι μια προίκα για τις μελλοντικές γενεές Κυπρίων. Ακόμη και αυτές οι μελλοντικές γενεές θα είναι ευγνώμονες εάν μπορέσουν να απολαύσουν την «κληρονομιά» σε ανθηρές οικονομικές συνθήκες. Αφήστε που χρειάζεται και μια οικονομική ασφάλεια η κληρονομιά αυτή, την οποία μπορεί να παράσχει μόνο μια σταθερή οικονομική ανάπτυξη. Πού μπαίνει το φυσικό αέριο στη συζήτησή μας; Εάν η κυπριακή κοινωνία είναι αποφασισμένη να παλέψει για την γρήγορη ανόρθωσή της, για την προστασία του βιωτικού επιπέδου και των επιτευγμάτων 38 χρόνων υπό συνθήκες κάθε άλλο παρά εύκολες, μπορεί μέρος της αξίας που είναι κλεισμένη στο βάθος της Μεσογείου να χρησιμοποιηθεί ως εγγύηση για άντληση των συμπληρωματικών πόρων που θα σώσουν την παρτίδα και ολόκληρες κοινωνικές ομάδες από τη σύνθλιψη. Είναι μεγάλη και δύσκολη απόφαση. Πρέπει να είναι το τελευταίο κομμάτι στο παζλ μιας λύσης, αφού όλες οι υπόλοιπες παρεμβάσεις έχουν ελαχιστοποιήσει τις ανάγκες. Αυτό που δεν πρέπει να γίνει με τίποτε είναι η εύκολη λύση, της ληστείας των επόμενων γενεών: να χρησιμοποιηθεί πρώτα (π.χ., εγγύηση σε νέες εκδόσεις χρέους) για να αποφευχθούν οι παρεμβάσεις και οι αλλαγές που είναι απαραίτητες. Απαιτείται γενναιότητα και αίσθημα ευθύνης από το πολιτικό προσωπικό. Η εναλλακτική όμως πρέπει να διερευνηθεί και τουλάχιστον να προσφερθεί προς κρίση στον κυπριακό λαό. Επιμύθιον Δυστυχώς, τα δύσκολα προβλήματα δεν έχουν εύκολες λύσεις. Ο ρόλος του πολιτικού προσωπικού, επικειμένων μάλιστα των εκλογών, είναι σημαντικός. Ο κυπριακός λαός έχει δικαίωμα στην αλήθεια, στην κατάθεση των πραγματικών εναλλακτικών. Ο Τσώρτσιλ, ένας περιθωριακός και εν πολλοίς ανυπόληπτος πολιτικός, όταν του ανατέθηκε η διαχείριση του πολέμου πριν εβδομήντα τόσα χρόνια είπε στους συμπολίτες του: «σας υπόσχομαι αίμα, ιδρώτα και δάκρυα». Η Ευρώπη σώθηκε. Ο κυπριακός λαός είναι σίγουρο πως δεν γλυτώνει τον ιδρώτα. Το στοίχημα είναι να σωθεί η Κύπρος χωρίς τα άλλα δύο. --------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Friday, 12 October 2012

Discussion turned into a debate - or the mistakes I made on live TV

On Thursday I wanted to talk about how to quickly make the government plan to the troika better. As I see it has 4 main flaws that I wanted to explain. 1) It does not include business cycles in taxation revenues and social expenditures, which would lead that we will commit to amounts that we will not be able to deliver, need new measures and new plans, spreading panic "ala Greece" 2) It postpones all issues of worth - structural reforms in the "future" through the use of "making reports on the issues" 3) There is no use of Greece's skills of does and don'ts - no understanding of best practise. 4) It ignored the ability to reduce co-sponsorship of EU funds (from 50/50 to EU 90/CY10) so that the real reduction in growth related expenditure is kept to a minimum. Lets explain this point: a) Lets say the government was giving 10 million for research and the EU topped it up by 10 million (co-sponsorship 50/50). i) Total Cyprus government budget cost 10m ii)Total expenditure for research 20m Now the government has to cut budget and cuts research from 10 million to 1 million. b)The problem is that for every 1 euro you take away you loose an additional euro from the EU funds. Why? i) New Total Cyprus government budget cost 1m ii)Total expenditure for research 2m Total reduction of expenditure 18m c) The solution is to ask the commission (and only the commission -= this is not a "troika" issue) to reduce the co-sponsorship level to 90/10. i) New Total Cyprus government budget cost 1m, but as the new ratio is 9/1 then the EU will provide ii)Total expenditure for research 10m Total reduction of expenditure 10m Yet all good plans of mice and men... i was led astray by the things I was hearing by my fellow panellist and looked to the past rather than the present. You can watch it here and tell me what you think... --------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Sunday, 7 October 2012

Another great article in the Sunday mail by Costas Apostolides

Most newspapers had thoughtful economic article today in regards to the government proposals to the "Troika" (I hate using that term - it suggests unanimity of purpose and a solid organization rather than an ad-hoc consortium of lenders of last resort), the Sunday mail was great. The article which can be seen here was written by a man I love and respect very much, even though I disagree about some of the issues relating to the Troika. No one knows Cyprus more and no one has worked more on practical issues to see this island have a better future, both in relating to his time in the planning bureau or his frankly amazing work on the economics of a solution in Cyprus. He happens to be my father and the reason I got to study economics and history. This article was written by him in today's Sunday mail. The impact of economic and financial crisis By Costas Apostolides Published on October 7, 2012 CYPRUS is a small country with a dynamic economy that is service orientated (80 per cent) and where growth sectors such as ship management bring in around a billion euros a year, the large number of foreign exchange on-line operators may well contribute even more, and the fastest growing economic sector is “house maids”. The aim of this article is to shed light on the economy, and to examine the impact of the international economic and financial crisis. Since the establishment of the Republic 1960, this is the first recession that has been caused by economic factors. The recession of 1964 was caused by inter-communal fighting and that of 1974-1976 by the Turkish invasion, while in 1991 it was caused by the first Gulf war. For all these the government (in cooperation with business and the trade unions) took immediate action, and the recovery from the 1974 Turkish invasion has been characterised an economic miracle. Unfortunately this time both the government and the Central Bank were found lacking, and there has been a total lack of cooperation on both the political level, and the business/labour level. The international financial crisis started in 2006 in the form of problems in the USA subprime mortgage market, which affected the financial sectors including the banks in almost all the major economies. It had an immediate effect on the UK in the form of a banking crisis, which led to recession in Cyprus’ major market in 2008 (-1.1 per cent GDP). The effects were a decline in outbound UK tourism from 2007 to 2011, while at the same time the demand from the British for houses in the whole Mediterranean region virtually evaporated, effecting the economies of Portugal, Spain and Cyprus. As a consequence Cyprus was hit in tourism and construction/real estate because in both sectors the British market accounted for over 50 per cent of the market. Cyprus at that stage had virtually no “toxic bonds”. The eurozone began to be affected in 2008, and in 2009 GDP fell in all the eurozone countries, and 4.3 per cent overall. Cyprus came through relatively mildly with a GDP contraction of only 1.9 per cent, the lowest in the eurozone. There was a decline in tourist arrivals from the UK, the Scandinavian states, Ireland, France and most other European countries. Business in hotel accommodation and restaurants fell (-6 per cent), construction sector was the most affected (GDP fell -18,7 per cent), followed by the associated sectors of quarrying (-25 per cent) and manufacturing (-5.8 per cent). Construction fell largely because of the collapse of the UK market, which affected primarily the real estate/construction sector in Paphos and in Famagusta coastal areas. In 2007 the Department of Lands and Surveys registered 14,586 contracts for real estate sales from foreigners, of which 43 per cent from Paphos. In 2011 only 1,670 foreign purchase contracts had been submitted, with less than a third from Paphos. Since 2009 the economy has been in stagnation, and appears to be back into recession in 2012. The sectors that are showing growth are first and foremost employment by households, that is foreign housemaids and those engaged in gardening activities, followed by the financial sector including the banks, services and the public sector. Transport and communications were in recession in 2009 and 2011, while hotels/restaurants have recovered strongly in 2011, and tourism revenues have sharply increased in 2012 also. The retail sector has been hit by the reduction in personal consumption in 2009, and many shops have closed, leading to major changes in the real estate sector. In contrast to the relatively moderate effects on GDP of the crisis, unemployment has risen sharply from 2009 onwards and reached 7.5 per cent of the economically active population in 2011, and is currently around the EU average of about 11 per cent. Cyprus has never experienced such a high rate of unemployment other than in the period of 1974-1976. This is the most tragic effect of the crisis that is affecting the population at large, especially young people. The fact that the economy is not growing also resulted in a fall in productivity in 2009, and stagnation in productivity in 2011, as well as the probability that school leavers will not get jobs in June. The recession and stagnation in the economy have had the effect of increasing pressure on government services such as health and education because many people can no longer afford private sector services. State revenues fell sharply in 2008 from €7.4 billion (about 9 per cent) to €6.7 bln in 2009 (fully absorbing for the surpluses of 2007/2008). By 2011 state revenues were still below the 2008 level. At the same time state expenditures continued to increase from €7.2 bln in 2008 to €8.4 billion in 2011, mainly owing to an increase in social welfare provisions (€633 mln) and civil service pay (€310 mln). As a result a fiscal problem arose, because the public sector went from small surplus in 2008 (€161 mln) to a deficit of around a billion euro in each of the following years (2009, 2010, 2011). The deterioration in public finances was the reason why credit rating agencies began to downgrade Cyprus in 2011 junk status in 2012. As a result the government has had difficulty raising funds in the market, and cannot finance a recovery programme. The credit rating agencies are, therefore, preventing a recovery and restructuring programme from taking place, though it must be stressed that the government failure to consider the effect of recession on its revenues and its insistence on proceeding with additional social benefits, exacerbated the problem and contributed to the present situation. The major failing, however, has been in monetary policy. Not only because the banks invested in Greek bonds, but due to the high interest rates of 7 per cent to 9 per cent charged to consumers and businesses, which are preventing growth. Without lower interest rates economic growth cannot take place, the situation cannot be remedied, but there have been few practical proposals put forward in this regard. Costas Apostolides is Chairman of EMS Economic Management Ltd
--------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.

Interview of Dr. Theodore Panagiotou and Alexander Apostolides at the Sunday mail

I just finished reading the troika and the government proposal at 4 this morning and I found much that made me upset. I agree with Dr. Panagitou's comment that "the proposals seem drawn by accountants, not economists" in the article where i be the great friend and journalist 10 euros if we received a tranche of the bailout by december, since I am not so sure it will pass through all stakeholders. Here is the original link,: Counter-proposals make second bailout certain By Stefanos Evripidou Published on October 7, 2012 THE GOVERNMENT’S counter-proposals to the troika were slammed yesterday by economic analysts who predicted tax revenue and economic activity to fall even further as a result, making a second bailout “unavoidable”. Dr Theodore Panayotou, director of the Cyprus International Institute of Management (CIIM), slated the government’s counter-proposals - largely made up of direct and indirect taxes - as a “pure accounting exercise” which “totally misses the point”. According to Panayotou, the proposals to impose more taxes and cut salaries in the private and public sector will end up lowering disposable income and reducing economic activity, resulting in lower profits for companies, greater unemployment, lower tax revenues, and more spending on social welfare. “Even though taxes will be higher, the numbers estimated (in expected revenue) will never materialise,” he said. “I expect more unemployment as a result of the reduction in economic activity, and an increased need for social spending. We will need to sign a second memorandum (with the troika), which is exactly the path followed in Greece,” he said. Panayotou was quick to add that the troika’s own proposed measures are far from perfect. “It seems they haven’t learnt their lesson from Greece. Their approach focuses too much on cutting (public expenditure), but these are accounting measures. The problem of the Cyprus economy is not just an accounting problem, the problem is the public sector is highly unproductive.” He argued that 20 per cent of the public sector produced the same work as the remaining 80 per cent. With the proposed measures, both productive and non-productive public employees will get the same cut in salaries, de-motivating those that do most of the work, instead of encouraging increased activity. The CIIM chief called on the government to introduce interchangeability in the public sector so civil servants could be transferred from overstaffed departments to ones where there is a staff shortage. He also called for a proper evaluation of public servants which will link their wages to productivity. Panayotou further argued for a reduction in the “outrageous salaries” of public employees on the middle to lower-end of the scales, saying these were twice as much as those in similar positions in the private sector. “A second problem of the Cyprus economy is that the private sector is highly uncompetitive vis-a-vis its partners in the eurozone. Basically, we cannot export anything, and even our tourism product is not competitive. “Therefore, tax revenues will keep going down, because economic activity will go down, and we won’t really be getting out of the mess. It’s highly predictable we’re going for a second memorandum,” he said. “The people who prepared the proposals are not economists, they’re accountants.” Panayotou called for a focus on keeping economic activity high and tax revenues high “otherwise you’re getting into a vicious circle of more and more depression, and a downward spiral”. He questioned why the private sector has not focused on promoting sports tourism, medical tourism, convention tourism, and started more energy-saving initiatives. “So many things that can be done are not being done. If we don’t try to become more competitive, we are lost. It’s a losing game when you have no investment in innovation, research and entrepreneurship. We don’t understand what it means to create value,” he said, adding, “As things stand, a second memorandum is unavoidable”. Alexander Apostolides, a lecturer in economic history at the European University Cyprus rejected the finance minister’s claim that the bailout could come by the end of December. “Even if we accepted the troika’s proposals today, the bailout still has to be agreed by the IMF board, the Commission in Brussels, and some hostile European parliaments, like Finland where they have elections coming up. There’s no way.” He too cast doubt on the government’s forecasts for increasing revenue, saying it was ignoring the substitution effect, where increased taxes convince consumers to find cheaper ways to maintain their standard of living. Apostolides questioned when the state would finally run out of money, noting that it has been engaging in short-term borrowing at a very high interest. “Also, at the end of October, the banks need to be recapitalised and no one really knows what will happen if they’re not,” he said. --------------------------------------------------------------------------------------------------- Licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License. . You are free to copy content but you must link back to this blog and attribute the work to me (Alexandros Apostolides).. You cannot use my work for commercial purposes and you must share it under the same terms I do.