International Economics: Pre-U Economics
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International Economics: Pre-U Economics
A collection of articles relating to the 'international' elements of Economics and relating to the Pre-U syllabus
Curated by Graham Watson
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Greek debt deal explained | FT World

The FT's Martin Sandbu explains what was agreed by the International Monetary Fund, eurozone finance ministers and the Greek authorities.

Graham Watson's insight:
The FT's Martin Sandbu outlines the intricacies of the latest tranche of the Greek bailout, looking at the involvement of the IMF and the concerns about the sustainability of Greek debt repayments.
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Hold on a moment: the European corpse may be rising from the slab

Hold on a moment: the European corpse may be rising from the slab | International Economics: Pre-U Economics | Scoop.it

As a basically Eurosceptic nation, it is sometimes said, Britain will only vote for Europe when it can look longingly across the Channel and see that the economy is notably better over there than it is here. So it was during the last referendum on membership of what was then the European Economic Community. Back in the 1970s, Britain seemed locked in a seemingly permanent cycle of economic decline. Contrast that with the steadily rising living standards of the time in Germany, and even France and Italy, and it is not hard to see why the overwhelming majority of voters thought they’d be better off in than out.

Graham Watson's insight:

Jeremy Warner looks at the current health of the Eurozone economy, within the context of Brexit, and concludes that, as things stand, the Eurozone is actually faring pretty well at the moment.


However, he's very much aware of its shortcomings - most notably in Italy where GDP remains 8% below pre-crisis levels - and the structural issues that still require tackling. He concludes by arguing, uncontroversially, that a strong Europe is good for the UK, irrespective of whether we're In or Out.

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Greece bailout: Eurozone deal unlocks €10.3bn - BBC News

Greece bailout: Eurozone deal unlocks €10.3bn - BBC News | International Economics: Pre-U Economics | Scoop.it
Greece agrees a deal to get further funds from its international creditors as eurozone finance ministers hail a "breakthrough".
Graham Watson's insight:

The cynics are suggesting that the magnitude of the latest Greek bailout is such that the Greeks will get through the summer and little more. Outrageous.


However, it does seem as though the can is being kicked, and kicked, and kicked...

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Why the title of 'developing country’ no longer exists 

Why the title of 'developing country’ no longer exists  | International Economics: Pre-U Economics | Scoop.it
hey are exploited by ruthless multi-nationals. They are under the jackboot of champagne-swilling currency traders. They are in hock to the banks, crushed by unfair trade agreements, and their workers are virtual slaves, turning out clothes in sweatshops on starvation wages. To many people on the Left, vast parts of the world are impoverished by a greedy West, while the professional poverty industry insists that the world is becoming more and more unequal all the time.
Graham Watson's insight:
It's almost overload: there's too much good economics out there, with this another fine story. The World Bank is getting rid of the 'developed'/'developing' distinction and this article explains why. In short, the differences within countries are, increasingly of greater significance than those between nations.
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IMF tells EU it must give Greece unconditional debt relief

IMF tells EU it must give Greece unconditional debt relief | International Economics: Pre-U Economics | Scoop.it
Fund’s debt assessment calls for ‘upfront and unconditional’ debt relief for Athens or it will refuse to part-fund latest bailout
Graham Watson's insight:
The other international story - those 'crazy' Greeks! The Guardian are reporting that the IMF are insisting on debt relief for Greece before they commit to funding the next tranche of the bailout. This throws up some interesting scenarios going forward. One wonders if the Leave campaign will make anything of this...
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US slaps China steel imports with five-fold tax increase - BBC News

US slaps China steel imports with five-fold tax increase - BBC News | International Economics: Pre-U Economics | Scoop.it
The US raises its import duties on Chinese steelmakers by more than five-fold after accusing them of selling their products below market prices.
Graham Watson's insight:

The US has hiked up its tariff on a particular type of Chinese steel by 522% - it isn't a universal tariff on all steel imports - but it illustrates tensions within the sector: the US wanting to protect its workers, the Chinese wanting to keep its steel mills rolling, and, of course, there are now implications for the EU, as China seeks to divert some of its exports to European markets.


How will the Chinese, and the EU, respond? Ding, ding...seconds out...round two

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Matt Morris's curator insight, May 22, 9:26 PM

International Economics Article: Trade barriers between the US and China

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Kipper Williams on the World Bank's climate change warning

Kipper Williams on the World Bank's climate change warning | International Economics: Pre-U Economics | Scoop.it
Governments and cities should plan for climate change disasters now, warns the World Bank
Graham Watson's insight:
He's just very, very good...Kipper Williams on the World Bank's latest on climate change.
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Global corruption risks tipping more countries into crisis, IMF warns

Global corruption risks tipping more countries into crisis, IMF warns | International Economics: Pre-U Economics | Scoop.it

Governments must step up their fight against corruption or face damaging economic and social consequences that risks tipping more countries into crisis, the head of the International Monetary Fund (IMF) has warned.

Graham Watson's insight:
Proof if it were needed, that corruption is debilitating, that the long-term effects decrease potential growth and encourage the most productive members of corrupt economies to pursue rent-seeking rather than entrepreneurialism. At least that's what the IMF says. And, frankly, it's pretty hard to disagree with that assessment. One wonders how much poverty could be alleviate via the bank accounts of former political leaders in sub-Saharan Africa on that basis? That said, don't think we're immune - how is paying former PMs £250,000 for hour-long speaking engagements any better than giving them brown envelopes full of cash? As an economist, I'd have to say only marginally.
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The choice for Europe: rescue Greece or create a failed state | Paul Mason

The choice for Europe: rescue Greece or create a failed state | Paul Mason | International Economics: Pre-U Economics | Scoop.it
It’s no longer about austerity. This is a battle for the soul of Europe
Graham Watson's insight:
Paul Mason on the wider significance of the ongoing Greek crisis - he sees it as a broader question of political engagement and hopes that the EU will see it fit to allow for some debt relief - otherwise he worries for the state of both Greece and the European project.
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Could a plastic punch revolutionise the lives of palm oil subsistence farmers? - BBC News

Could a plastic punch revolutionise the lives of palm oil subsistence farmers? - BBC News | International Economics: Pre-U Economics | Scoop.it
Could a simple plastic device really shake up palm oil farming in the developing world?
Graham Watson's insight:
It's always amazing to see how technology has the capacity to enhance productivity. In this instance, its creators argue that a little plastic device is able to predict whether palm oil tree are going to produce. The application of precision molecular biology to developing world agriculture has the potential to have a dramatic effect. 
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Bruce Fellowes's curator insight, May 10, 7:41 AM
We have talked about Palm Oil many times in class this year. Could this invention makes it a more sustainable industry?
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Refugees hold key to German economic growth, IMF says

Refugees hold key to German economic growth, IMF says | International Economics: Pre-U Economics | Scoop.it
Policies to integrate migrants into labour market will help counter effects of ageing population, organisation says
Graham Watson's insight:
The Guardian looks at the IMF annual report into the state of the German economy and highlights something that I've been pointing out for a while. Germany's acceptance of refugees is an economically-motivated decision, designed to counter a declining population. The key issue for Germany is making sure they are properly integrated.  
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The EU referendum: A big decision. Don't risk it!

Good jobs, rights at work. The Trades Union Congress believe there's a huge amount at stake for working people in this referendum. A vote for Brexit coul
Graham Watson's insight:

The Trades Union Congress (TUC) are in favour of the Remain campaign, arguing that ordinary worker will be better-off in, not least because EU labour market legislation has helped protect them.  


They argue that a vote to Leave imperils some of this - although I'm not entirely sure that some of the economics adds up.

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IMF threatens to pull out of Greek rescue

IMF threatens to pull out of Greek rescue | International Economics: Pre-U Economics | Scoop.it
Christine Lagarde issues warning in letter leaked three days before eurozone finance ministers discuss help for Athens
Graham Watson's insight:

I told you that this was the coming story...this Guardian article - replete with typos - highlights the fact that the IMF are reluctant to continue supporting Greek rescue plans unless there's some debt restructuring.


Christine Lagarde, the Managing Director of the IMF, is reputed to written that "For us to support Greece with a new IMF arrangement, it is essential that the financing and debt relief from Greece’s European partners are based on fiscal targets that are realistic because they are supported by credible measures to reach them".


And without continued IMF support, the current bailout package looks unsustainable.

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Will Greek debt deal really change anything? - BBC News

Will Greek debt deal really change anything? - BBC News | International Economics: Pre-U Economics | Scoop.it
Will the latest deal on Greece's debt change anything or does it just delay dealing with the real problem, asks the BBC's Andrew Walker.
Graham Watson's insight:

In line with my normal scepticism, this BBC article suggests that c'est plus ca change (cedilla notwithstanding!) as far as Greece is concerned. However, the interesting thing about this seems to be that although there's no substantive change in challenges facing Greece, this time there's no IMF involvement, nor is there likely to be without debt relief.


The fact of the matter is that Greece will be repaying its debt to the Eurozone's bailout agency until 2059. And yes, you read that correctly.

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Greece reaches debt relief breakthrough - but it's not over yet

Greece reaches debt relief  breakthrough - but it's not over yet | International Economics: Pre-U Economics | Scoop.it
Greece reached a "breakthrough" deal with European creditors last night that will reduce its massive debt mountain and release vital rescue funds to the cash-strapped nation.
Graham Watson's insight:
The Telegraph on Greece; it's actually fairly explicit about the nature of the latest 'breakthrough': "the rest will be given to Greece after the summer and subject to a progress review".

I imagine the latter will be particularly stringent.
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EU exit warnings are flawed  

EU exit warnings are flawed   | International Economics: Pre-U Economics | Scoop.it

The Treasury recently brought out its report on the long-term effects of Brexit, saying they will be dire. This week it followed that up with equally severe warnings about the short-term impact. Both are flawed.

Graham Watson's insight:

I wonder if the Telegraph are going to carry as much material in favour of Remain as they do Leave...


Here Patrick Minford gives reasons as to why the Remain campaign are being disingenuous. No, he does... 

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AEP: Saudi financial crisis 'could leave oil at $25' as contractors face being paid in IOUs

AEP: Saudi financial crisis 'could leave oil at $25' as contractors face being paid in IOUs | International Economics: Pre-U Economics | Scoop.it

Saudi Arabia faces a vicious liquidity squeeze as capital continues to leak out the country, with a sharp contraction of the money supply and mounting stress in the banking system.

Graham Watson's insight:
This Ambrose Evans-Pritchard article has a touch of the 'Katie Allen's' about it, in that it's very pessimistic, to the extent that there are genuine concerns for the state of the Saudi economy. Another article that poses a lot of questions - how apt for the day that my boys sat their Pre-U Paper 2...
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Better Seeds Bring Bigger Harvests in West Africa

More food is being produced on farms in Cote d’Ivoire, Sierra Leone and across West Africa. What’s behind this big boost to #agriculture and #farming? Better seeds!
Graham Watson's insight:

Another World Bank clip highlighting the excellent work of WAAPP in increasing agricultural productivity by technological advances and the fact that WAAPP is able to benefit from economies of scale that individual nations would not be able to exploit.


Agricultural productivity is a key factor in encouraging development: as agricultural productivity rises, fewer workers are required to produce a given quantity of food and surplus workers are able to move to rural areas in search of work. It's fairly standard stuff - it's how the Industrial Revolution began.

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Matt Morris's curator insight, May 22, 9:25 PM

Awesome video about the growing economies of Africa.

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Canada fires cost oil sands production $760m - BBC News

Canada fires cost oil sands production $760m - BBC News | International Economics: Pre-U Economics | Scoop.it
A new report into the financial impact of the McMurray fires says some $760m (£528m) in oil sands production has been lost.
Graham Watson's insight:

This story is remarkable - it illustrates the size of the loss as a result of the Fort McMurray fires, but I also think it's remarkable for all sorts of other reasons, not least the methodology of the report.


Bear in mind, the fire is still burning - the headline figure strikes ,e as the back of a fag packet calculation - average daily output x number of days output lost. Surely, there are all sorts of other costs involved too: there must be significant external costs too, so perhaps such an early report isn't really a good assessment of the 'economic' cost of the fire.

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Eurozone growth estimate revised down a notch - BBC News

Eurozone growth estimate revised down a notch - BBC News | International Economics: Pre-U Economics | Scoop.it
The official second estimate on eurozone growth is revised down slightly from 0.6% to 0.5% in the first quarter of the year.
Graham Watson's insight:
We're where we were regarding Europe, Germany has done exceptionally well recently, doubling its growth rate but other economies are still struggling and overall growth is still close to stagnant.
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Eurozone recovery wilts as sugar rush fades, deflation lurks  

Eurozone recovery wilts as sugar rush fades, deflation lurks   | International Economics: Pre-U Economics | Scoop.it

The eurozone’s short-lived recovery is already losing steam as stimulus fades and deep problems resurface, raising fears of yet another false dawn and a potential deflation trap if there is any external shock over coming months.

Graham Watson's insight:

It's been a pessimistic week on the Telegraph's Finance desk - in this article Ambrose Evans-Pritchard reflects on data that suggests that Eurozone QE hasn't had a positive long-term effect upon European economies and may have only served to mask underlying structural weaknesses. Deep joy!


And as kicker - the threat of deflation returns front and centre.

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EU referendum: Frankfurt poised for a Brexit boom - BBC News

EU referendum: Frankfurt poised for a Brexit boom - BBC News | International Economics: Pre-U Economics | Scoop.it
Few in the German financial capital say they want Britain to leave the EU, but many are ready to take advantage if it does.
Graham Watson's insight:

This BBC article looks at the fact that if Britain does vote to leave the EU, then there's a chance that big players in the City will move, although to where?


Frankfurt is one of the prospective refuges - and there's some talk that a number of major players have already explored this possibility. However, my only observation is that people said this about the creation of the Euro and, if anything, the hand of the City was strengthened. I think it's still the case that the largest trader of Eurobonds is still London...  

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Tax havens have no economic justification, say top economists

Tax havens have no economic justification, say top economists | International Economics: Pre-U Economics | Scoop.it
Thomas Piketty and Jeffrey Sachs among signatories of letter urging world leaders at UK anti-corruption summit to lift secrecy
Graham Watson's insight:

The Panama Papers leak has prompted some soul-searching regarding tax havens and, on the eve of a UK-hosted anti-corruption summit, a number of leading economists have signed an open letter urging greater transparency over the issue.


The irony? It's Britain's overseas crown dependencies and territories that lead the world in term of this sort of activity.

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Eurozone ministers to examine how to ease Greece's debt burden

Eurozone ministers to examine how to ease Greece's debt burden | International Economics: Pre-U Economics | Scoop.it
Measures such as tweaking repayment terms over the next three years are being considered, but a write-off is off the table
Graham Watson's insight:
The Guardian with more on Greece; a renegotiation of the terms of the bailout is being discussed but a complete write-off is a no-no., to overuse the hyphen.
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Greece bailout: Eurogroup 'hopes for debt relief deal on 24 May' - BBC News

Greece bailout: Eurogroup 'hopes for debt relief deal on 24 May' - BBC News | International Economics: Pre-U Economics | Scoop.it
Eurogroup chief Jeroen Dijsselbloem says he hopes a deal with Greece on reforms and debt relief can be agreed by eurozone ministers on 24 May.
Graham Watson's insight:

Keep your eyes peeled, Greece isn't out of the woods yet, and the prospect of future debt relief is uncertain, although it seems that the Germans are more receptive to the idea than perhaps they were two years ago.


Either way, Greece has adopted a number of austerity measures and there appears to be some prospect of progress. For now.

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