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Forbes, 16 November 2008 Europeans cheer G20 summit, eye implementation A G20 pledge to support the global economy with fiscal stimulus measures, another theme pushed by Brown, was vague reflecting the difficulty in coordinating national economic polices on a global scale. "More regulation and supervision can help but the question is whether it really addresses the root causes of the financial instability," said Katinka Barysch, deputy director of the London-based Centre for European Reform. "For that you need to address global imbalances, you need more co-operation at the macroeconomic level." Time, 14 November 2008 Europe's Obama problem: Afghanistan "Afghanistan will be at the top of the US priorities for Europe," says Tomas Valasek, director of foreign policy and defense at the Centre for European Reform, a London think-tank. He says Obama will appeal for more soldiers in the dangerous southern part of Afghanistan to fight Taliban insurgents. "Obama will put more troops in the country and expect Europe to do the same. And even though all European governments are short on troops and money, many will respond in kind." The Economist, 13 November 2008 No room in the ark Euro membership is certainly not a panacea. It can store up trouble by reducing pressure for structural reforms, says Simon Tilford of the Centre for European Reform, a London-based think-tank. For example: thanks to low euro interest rates, Italy can service its debts more cheaply. But without the option of devaluing its own currency, its competitive weakness is being cruelly exposed. Deutsche Welle, 12 November 2008 EU aims to get tough on credit rating agencies The new regulations, if approved by EU member states and the EU parliament, would subject CRAs to greater government supervision and dictate how they operate. "The general drift in the EU is to try to prevent future financial crises by tightening the regulatory screw," said Philip Whyte, analyst at the Centre for European Reform. The Guardian, 12 November 2008 German recession fails to slake thirst for beer Simon Tilford, chief economist at the Centre for European Reform, says the European commission's estimate for Germany is not credible because an economy built on exports is "hugely vulnerable" to sluggish growth in world trade. Manufacturing orders fell 8 per cent in October alone. Reuters, 11 November 2008 European governments turn left in global crisis Simon Tilford, chief economist at the Centre for European Reform think tank based in London, said: "Some governments are actually quite keen to exploit the precedent that has been set to re-establish a more ... interventionist industrial policy, or economic policy more generally." Miami Herald, 11 November 2008 Europe expects to flex its muscle at financial summit Philip Whyte, an economist at the Centre for European Reform in London, noted that the fair-value accounting rules have been blamed for "exacerbating the crisis by forcing banks to sell assets." Whyte called the Europeans' heavy emphasis on regulation to resolve or avoid future financial problems "a bit simplistic." In his view other factors contributing to the current crisis, such as the big surpluses in countries like China, need to be addressed. "They stand in relation to the Americans and British as a drug dealer stands in relation to a drug addict," he said of China. "They supplied the liquidity." Reuters, 10 November 2008 Not gloomy enough Simon Tilford, chief economist at the Centre for European Reform, reckons it may be even darker than the Commission expects. The Commission, he says in an article, has a tendency to be slow to downgrade its forecasts, and much of what it said last week was already looking out of date when released. "The indications of an unprecedented slump in economic activity are multiplying all the time." Tilford reckons the forecasts for Germany and Spain - the euro zone’s first and fourth largest economies, respectively – are among the most out of sync. Germany, for example, is seen standing still. But Tilford asks where such strength as even that will come from given the economy’s reliance on exports and a projected dive in global trade volumes. As for Spain, he wonders how a decline in output can be held to the Commission’s minus 0.2 per cent with unemployment rising rapidly, industrial production tanking and construction and housing activity collapsing. All this, Tilford says, shows that the Commission is too complacent about the state of the European economy. What it needs is to cajole member states that have run up large surpluses and strong fiscal positions to boost demand. "Current account surpluses are not sustainable in the present climate," he concludes. Associated Press, 8 November 2008 Spain tries to win invite to summit in US Spain has been outspoken in its desire to attend. With globalization and growing economies in Asia, Spain could be fighting its last battle to be recognized as one of the big players. "That is why it is important for Spain to have a seat at the table because they sense that if they don't get a seat now, they will never get a seat," said Katinka Barysch of the Centre for European Reform in London. Instead, Europe should learn to speak in one voice, without the glut of individual nations represented. "You are not going forward because you need to have fewer European countries, not more. So Spain muscling in there is complicating what we really need to do," she said. Voice of America, 7 November 2008 EU leaders discuss global financial crisis European leaders are far from united on what is needed to tackle the financial crisis, as Centre for European Reform analyst Katinka Barysch points out. "Within the European Union you have quite significant differences at the moment between the governments on what the longer term reaction to the crisis should be," said Barysch. "And Sarkozy, who is called a hyperactive president, is coming up with a wealth of proposals about what the EU should do and most of them are being shot down as soon as they emerge." EU Business, 6 November 2008 The roles of key European figures in tackling the financial crisis Gordon Brown: The British prime minister, who had been coming under fire from members of his own government and seen poll ratings plummet, saw his stock rise first on the European stage. His plan to bail out banks was used as a blueprint in the EU and the US. "He's the surprise winner in the crisis," said Katinka Barysch, an analyst at the Centre for European Reform. De Telegraaf [The Netherlands], 6 November 2008 Bedrijven blij met Obama Philip Whyte van de Britse denktank CER (Centre for European Reform) verwacht niet dat Obama in de huidige omstandigheden de begrotingstekorten op korte termijn zal wegwerken. „Dat is wat overheden deden in de jaren dertig, en dat pakte desastreus uit.” Whyte vreest wel de ’protectionistische geluiden’ van Obama gedurende zijn nominatiecampagne. Een groot deel van zijn achterban ziet meer vrijhandel als een rechtstreekse bedreiging voor de eigen baan. „Een Democratische president kan een obstakel voor de wereldhandel zijn”, aldus Whyte. International Herald Tribune, 5 November 2008 Croatia makes progress toward joining EU Katinka Barysch, deputy director of the Centre for European Reform, said the tough message to most EU applicants was clear. "The commission is saying: We understand you have local problems but, at some point, that's not enough, you have to make reforms," she said. "Giving a tough message is important to preserve the credibility of the process." The Age [Australia], 5 November 2008 Europe's new love affair promises an entente cordiale According to Tomas Valasek, director of foreign policy and defence at the London-based Centre for European Reform, Senator Obama is seen to represent the "cleanest break with America's least popular policies". The Guardian, 5 November 2008 Europe's looming skills crisis At a seminar here this week organised by the IPPR/Centre for European Reform, experts agreed that net inflows and outflows were now unpredictable. But we all agreed, too, with Peter Sutherland, BP chairman and UN secretary-general special representative on migration, who said recently: "It is inevitable that if GDP growth globally declines ... then this will have an effect on migrants, either in terms of wanting to go home or in terms of being unemployed in the places to which they come." Reuters, 3 November 2008 European climate backlash puts global deal at risk Such a threat has set minds in Brussels to thinking how the east European alliance might be broken apart, possibly by handing out funding to pay for low-carbon alternatives to coal, or by linking them to an EU power grid. "I think that alliance can be picked apart, because what they really want is recognition of their reliance on coal and the obstacles they face in switching to gas," said Simon Tilford at London's Centre for European Reform. "I think it just needs a financial re-jig." ...Other nations, including Britain, counter that cutting oil consumption is good for consumers and new green industries like electric cars could replace jobs lost in polluting industries. "It is beholden on the countries that pushed for this to stick to their guns, and that's where Germany could be a problem," said Tilford. "If Germany asks for too many concessions, there's a risk of it becoming a free for all." Der Tagesspiegel, 31 October 2008 Schulterschluss mit London Simon Tilford, Wirtschaftsexperte des „Centre for European Reform“ kommentierte: „Man vermutet, dass es Sarkozy nicht um eine bessere Regierung der Eurozone geht, sondern um Barrieren gegen Investoren, Protektionismus und darum, die Rolle des Staates auszuweiten – und das wäre das Schlimmste, was passieren könnte.“ Tilford fügte hinzu, die Briten hätten eine tief sitzende Skepsis gegen eine Ausweitung der Rolle des Staates. „Eine fundamentale Änderung dieser Haltung wird es auch durch die Krise nicht geben.“ New York Times, 29 October 2008 Sarkozy boldly attacks financial crisis, but Europe wants results But they are also going to look for results, said Katinka Barysch, an economist and the deputy director of the Centre for European Reform in London. "For Sarkozy, it’s a tricky strategy," she said. "In a situation where confidence is in such short supply, having a politician leave the impression he’s in charge and can do things can be good. But if like Sarkozy, you convene one summit after another and present one idea after another, you raise expectations you can’t fulfill." EU Observer, 29 October 2008 Financial crisis should not delay US missile shield According to Tomas Valasek from the London-based Centre for European Reform, campaign speeches tend to differ from real action and even a president from Democratic camp is likely to find himself under pressure to show leadership and strength on security. "Although senator Obama is surrounded by people who have expressed doubts about parts of the missile defence system, they do not question its philosophy as a whole," the expert on foreign and defence policy told EUobserver. In addition, it is more difficult for a politician to defend a milder stance on security when faced with the basic argument of "why should we protect our people less sufficiently," Mr Valasek added. Differences are stronger, however, when it comes to the idea of using space for military purposes, for example by launching laser weapons or micro-sattellites to intercept enemy missiles during their flight, the analyst said. Senator Obama also said in July he would "not weaponise space." But according to Mr Valasek, the argument enjoys support beyond the Democratic party, with many saying that an arms race in space would be the most damaging to the US because of the country's clear primacy in the area for now. Agence France Presse, 28 October 2008 Sarkozy, Brown hold financial talks in sign of warming ties But Philip Whyte, senior research fellow at the Centre for European Reform, warned not to "read too much" into the thawing of ties. "Franco-British relations are clearly a lot better than during the fag end of the (Jacques) Chirac years," when Sarkozy's predecessor opened a rift with London and Washington over the Iraq war. "But this idea that France and Britain are going to become some sort of subsitute, or are going to supplant the Franco-German relationship is nonsense. "When it comes down to long-term considerations of France's interest, Germany remains the primordial relationship," Whyte said. Christian Science Monitor, 28 October 2008 Europe's financial crisis is spreading eastward In many cases, the loans Western European banks have made to Eastern European customers for mortgages were made in foreign currencies – euros, dollars, Swiss francs, and others – at substantially lower interest rates than they would have received in their own currencies, which were strengthening rapidly. That wasn't a problem, as long as those Eastern European currencies remained strong, says Katinka Barysch, the chief economist at the Centre for European Reform in London. "But now these currencies are under pressure," Ms. Barysch says, "and you will really struggle to service your mortgage if the value of your own salary is collapsing vis a vis your mortgage payments in Swiss francs or euros." Daily Times [Pakistan], 26 October 2008 Mediterranean union bogged down by Mideast politics Clara Marina O’Donnell, at the Centre for European Reform in London, said the trouble is no "surprise, because all the difficult tricky procedural questions were not addressed, all the difficult things were delayed" till November. "There was an undue optimism when Sarkozy started this union because basically he tried to rebrand it all without addressing the core strategic shortcomings" notably that some members "don’t talk to each other," she said. Financial Times, 25 October 2008 Pressure mounts on China to offer help "All the countries with current account surpluses have people knocking on their doors at the moment and China, with the biggest surplus, will be the most courted," said Charles Grant, director of the London-based Centre for European Reform. The Irish Times, 23 October 2008 If Europeans could vote in US election, Obama would win, but then what? "Europeans will cheer the departure of George Bush and see it as an opportunity to rebuild the transatlantic relationship but they should be careful not to have overblown expectations of the new US president," says Hugo Brady, an analyst with the London-based think tank, Centre for European Reform. Either Barack Obama or John McCain would offer real prospects for better EU-US relations, although most of the tricky issues dogging transatlantic relations will remain such as Iran and Afghanistan, says Brady. The Guardian, 23 October 2008 From brake to boon: German prudence shields economy "I think the fact that (the Germans) haven't had asset bubbles means they will escape some of the nastiness that we are going to see elsewhere," said Simon Tilford, chief economist at the Centre for European Reform in London. ...Long seen as Germany's Achilles heel, private consumption could now provide some support for the economy, even if it is unlikely to boost it much. "The savings rate is high and it is unlikely to rise further, so to that extent that will support consumption," said Tilford. "They (the Germans) are certainly less vulnerable than the UK, or Spain or France." Reuters, 22 October 2008 Asia and EU wrestle crisis in messy diplomatic dance "The fact that the EU is not a very effective negotiating partner, that it can be so opaque and complex, is a frustration for China, I'm sure," said Charles Grant, director of the Centre for European Reform in London. "But China is also a frustratingly opaque and rigid partner, so the EU is also frustrated." Le Point, 21 October 2008 L'Allemagne envisage des mesures ciblées pour doper l'économie "L'Allemagne pourrait se permettre de réduire les impôts tout en augmentant les dépenses publiques, ce qui donnerait un coup de fouet aux économies allemandes et européennes, mais je ne pense pas que cela se produira. Ou si cela se produit, ce ne sera pas suffisant, ou il sera trop tard", estime Simon Tilford, économiste en chef au Centre pour la Réforme européenne. The Guardian, 21 October 2008 Germany mulls measured stimulus measures Having made fiscal consolidation a hallmark of its [Germany's] economic policy, the coalition government is unlikely to change course, said Simon Tilford, chief economist at the Centre for European Reform. "Germany could afford to cut taxes and boost public spending, and give both the German and European economies a shot in the arm. But I don't think we're going to see it. Or if we do see it, I think it will be too little, too late," Tilford said. Associated Press, 21 October 2008 Sarkozy: EU should consider sovereign wealth funds Some analysts doubt whether other European leaders would support the plan given that EU nations lack the deep pockets of the oil-rich nations. "Is this the best use of taxpayers' money? No," said Katinka Barysch, economics expert at the Centre for European Reform, a London-based think tank. Reuters, 21 October 2008 Italian backlash threatens EU's climate fight "Nobody really envisaged a west European state playing hardball," said analyst Simon Tilford at London's Centre for European Reform. "It won't dilute the target, but it might make it harder to meet it," he added. "And this is all before the economic crisis has really started to make itself felt." Time, 16 October 2008 Is Europe backsliding on climate-change targets? But even if the EU can still honor the spirit of its climate change commitments, they might have to be scaled down, according to Simon Tilford, chief economist at the London-based Centre for European Reform (CER). "It was always going to be tough, but it is now much, much harder," he says. "It would be too pessimistic to say the whole agenda will be derailed. But it is difficult to see how it can be kept on track in its current form." International Herald Tribune, 16 October 2008 Euro's appeal growing amid financial meltdown Philip Whyte of the Centre for European Reform said that may be wishful thinking, as the euro is considered a "dead issue" in Britain. Deutsche Presse- Agentur, 16 October 2008 EU summit backfire sets up for bumpy climate ride And that backfire leaves the French government, current holder of the EU's rotating presidency, facing a rough ride if it is to forge a deal on flagship EU laws on fighting climate change in December. "It was understandable what the presidency tried to do, but maybe it was always unlikely that it would work," Simon Tilford, chief economist at the Centre for European Reform in London, said. "Europe is facing a recession, perhaps a prolonged one. Against that backdrop, EU governments are even more determined to ensure that their red lines are not crossed," Tilford told dpa. Earth Times, 15 October 2008 United we stand, emboldened EU leaders say Hugo Brady, an EU expert at the Centre for European Reform, a London-based think-tank, says the bloc's response to the credit crunch has reminded its citizens of the importance of monetary union. All they need to do is look at non-EU member Iceland, which is facing national bankruptcy as a result of the crisis. Or Denmark, which has refused to join the eurozone and has now been forced to raise interest rates to defend its currency. But Brady also cautioned leaders against becoming too self- confident. "I would council against a premature declaration of victory," Brady said. "The patient has a good chance of surviving, but we don't know yet if it will be able to walk." Financial Times, 14 October 2008 EU summit marks pivotal point "Of the major powers and potential powers, only the EU starts from the assumption that multilateralism is desirable," says Charles Grant of the Centre for European Reform think-tank. "Faith in the rule of international law, and in the potential of international institutions, run deep in the DNA of Europe's political elite." EU Business, 14 October 2008 France thrives as Europe's crisis-manager "Most governments gave Sarkozy quite a good mark," said Charles Grant, director of the European Center for Reform in London. But agreements negotiated with Moscow and Tbilissi have been criticised for lacking specifics while a first attempt at a Europe-wide response to the banking crisis with Britain, Germany and Italy fell flat. The Spectator, 14 October 2008 Whither the euro The financial crisis has partially revived the euro debate. Eurosceptics think that it might bring the whole thing down while those who favour British entry believe that they have found a new argument for it. To date, it has been the usual suspects making the case on either side. But today Simon Tilford and Philip Whyte of the Centre for European Reform, a pro-European think-tank run by Charles Grant, have a piece in The Guardian which is surprisingly bearish on the euro’s prospect. Here’s the key section: "The credit crunch should test conclusively whether it is sustainable for countries to share a single currency outside a political union. The financial markets seem to be sceptical. The difference (or "spread") between the yields on German government bonds and those of many of the other member states have widened steadily over the course of 2008. In Greece's case, the spread over German bunds is now almost a full percentage point, while in Italy it is 0.9 and Spain 0.6. A year ago, the differences were negligible. What these spreads tell us is that investors have more confidence in the ability of the German government to service its debts than the Italian, Spanish or Greek governments. And since they share the same currency, this means investors believe there is a growing risk that the euro area will unravel." World Bulletin [Turkey], 11 October 2008 5th Bosphorus Conference on "Turkey-EU relations" begins |