#UCCEconoCon Live Blog

Refresh for updates, thanks to @AudreyEWalsh for some of the quotes

Hello and welcome to my live blog of the UCC Economics Society Economic Conference. There is a great line up of speakers organised and I will be updating this post as the day goes on. Feel free to ask questions in the comments on Twitter (@spiller2 or @corkeconomics) or on Facebook. Todays Timetable:

11:30 – 11:35    Welcome by Stephen Barry, Auditor of UCC Economics Society
11:35 – 11:50    Opening Address by Robbie Butler, UCC Department of Economics

11:50 – 12:50    Panel Discussion 1: Is politics the greatest stumbling block to economic stability? Ciaran Lynch TD, Sinead Ryan and Declan Jordan, Peter Mathews TD and John Considine (Chair)

12:50 – 13:20    Q&A

13:20 – 14:20    Lunch

14:20 – 14:40 “Gaming It: Incentives, Cheating and the Grey Area in Sports” – Declan Jordan

14:40 – 15:40    Panel Discussion 2: The Eurozone – wobbling on a tightrope between growth and debt? Megan Greene, Seamus Coffey, Brendan Keenan, Lorcan Roche-Kelly and Tim Harford (Chair)

15:40 – 16.10   Q&A

16:10 – 16:20    Coffee Break

16.20 –     Keynote Speech by Tim Harford

Robbie Butler:

  • We can go from Primary to University without studying Economics.
  • We don’t teach basic Economics, how to save, how to spend, how not to spend more then you earn
  • Interest in Economics has declined since the recession.
  • Need to capture imagination of young people. Less than 10% leave formal education with education in economics

Panel 1: Is politics the greatest stumbling block to economic stability?

Declan Jordan

  • Politics isnt the greatest stumbling block to economic stability
  • Do Governments hinder or help the Economy
  • 13 Countries with good growth had committed, credible and capable Government
  • Bad decisions and Bad Governments can damage Economies
  • Electorate needs to incentives “good politicians” with “Good policies”
  • we tend to see politics as a problem, we get the government we deserve, we elected them
  • we elected the same government 3 times who had short term views, but we contributed to it

Peter Matthews TD

  • We’ve had a volatile economic situation here, as opposed to stagnation (Japan) or depressed (Soviet Union)
  • Unregulated markets has wrecked the real economy.
  • Read the “Price of Inequality” – Joseph Stiglitz
  • Also read “Thinking Fast & Slow” by Daniel Kahneman
  • This country is overburdened by debt which is unsustainable! A debt right down for Ireland would be the right thing to do!
  • The 11 MEPs need to agree on working together to reduce the €53bn debt

Sinead Ryan

  • 1st lesson of economics is of scarcity, 1st lesson of politics is to ignore the 1st lesson of economics.
  • Where there is conflict between Economist and Politicians, the tax payer ends up the loser.
  • Examples are Irish Water, HSE, Bank Crisis and unprofitable routes on public transport
  • No politician wants to be called brave

Ciaran Lynch TD

  • If Government is a stumbling block for economic stability if bad policies are followed, its not if good policies are followed.
  • Everyone now has opinion about economics just as in politics
  • The financial crisis has both internal and external causes!
  • Economics does not come with an ideology, just like Politics
  • Coming out of the current crisis/bailout is an example of how politics can work
  • Life cycle carbon taxes – there is not enough materials in the world to meet future supply.
  • Politics does not cause instability but pursuing economic dogma does

Q&A: Question: How do we get the Politician’s we deserve

  • Economist should provide Electorate with information
  • Economist should fact check on political policies

“ECB Monetary Policy” – Lorcan Roche Kelly

  • German Economy is the most important tool to the the ECB
  • To get where the ECB wants to be, the must do something new. They can’t cut interest rates. Money supply must be managed better!
  • The crisis that Europe is facing, is not a debt crisis…. it is a growth crisis!
  • The best thing that happened to the ECB was Trichet leaving the bank and Draghi coming in
  • The Euro suffers from a publicity problem

“Gaming It: Incentives, Cheating and the Grey Area in Sports” – Declan Jordan

  • Lots of cheating in sport, Luis Suraz, World Cup 1982, Theire Henry, A-Rod, Lance Armstrong, Maradonna.
  • Cheating is not new, its easier, they do work hard
  • Its’ expected
  • Is bending the rules allowed?
  • Cheating needs a new definition
  • Should be defined as Breaking the rules for Advantage

Panel 2: The Eurozone – wobbling on a tightrope between growth and debt?

Brendan Keenan

  • Eurozone is still a collection of National Economies, cant be compared to USA. Huge disparities between Governments
  • The eurozone crisis could easily erupt again!
  • Ireland facing more contraction until 2016, Public spending can grow beyond that if we reach that if international recovery
  • Is Ireland political willing to continue walking the tightrope? It will still be tough
  • A Tightrope… doesn’t matter which side you fall off! You fall off! A second bailout would lead to unknown territory.

Megan Greene

  • Adding an item to the agenda, INFLATION…… it should be growth, solvency and inflation.
  • It is important to look at 2 different solvency levels: 1) Public Solvency levels 2) External Solvency levels
  • 2014 will be a chronic year for the Eurozone, however next year things should get get better!
  • Germany has some room to provide some stimulus, but unlikely as its facing a rapid ageing population
  • German’s population is ageing and while their fiscal policy is good, their future generations will be paying the price.
  • Banking Union will not be about burden sharing, which was the point
  • Debt conference in Europe with all the weaker countries (and perhaps France), to restructure debt, is necessary.
  • The most political likely deal is debt restructuring. It will be politically tough. But rescheduling at least is nessecary

Seamus Coffey

  • If deflation appears in prices, it might not be too bad. However, if it appears in wages, it would not good!
  • Deflation also affects Government income, VAT and Duty.
  • Those most hurt by deflation are those in debt. Most in debt? Governments- where anti deflation comments come
  • We still havent solved the Banking Crisis
  • EU needs to become more federal, whether in policy or fiscally, for social project of 1950s to avoid getting stuck
  • The Burden of the Debt has to go Somewhere

Lorcan Roche Kelly

  • Eurozone is almost a Co-Op
  • The Eurozone is a good tempate for a Federalised Europe
  • We need a really bad crisis for politicians to hand over fiscal power. Seeds are there for that crisis. Sovereign Debt
  • The answer is more Europe
  • Integration or Disintegration
  • We are half way across canyon, if we turn around we will fall off.

Keynote Speech: Tim Harford

  • Focusing on the story of Alban William Phillips (Also known as Bill Phillips)
  • He is the Indiana Jones of Economics
  • Invented the Moniac the first computer model of an economy
  • Developed the Philips Curve, the correlation between inflation and unemployment
  • The 1970’s Oil Crisis discredited the Philips Curve
  • When he developed the curve he never believed in it.

And thats it folks! Thanks for joining me!

 

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UCC Economics Conference to kick-start wealth of debate

This Saturday, the UCC Economics Society will be holding their Economic Conference. There is a number of excellent speakers lined up (see below) which should be interesting to a lot of people. The reason I am posting this is that I shall be there and covering it on Twitter, Facebook and the blog.

Press Release:

Multi-million selling author and BBC Radio presenter Tim Harford will be the keynote speaker at the UCC Economics Society inaugural conference on Saturday the 1st of February in the Aula Maxima, UCC from 11am to 5pm. Other speakers include economists, broadcasters, politicians and journalists.

Harford spent some time lecturing in UCC in the nineties. Since then he become well known through his writing. He contributes to the Financial Times where he writes the world’s only economic ‘agony aunt’ column. His most recent publication ‘The Undercover Economist Strikes Back: How to run or ruin an economy’ takes a step into macroeconomics, while his online TED talk has over 150,000 views (link http://www.ted.com/talks/tim_harford.html )

The conference features a number of other high-profile panellists who will debate European and political related economicaffairs. Megan Greene, Chief Economist with Maverick Intelligence, based in London, will speak about the current European situation. Other speaks include Brendan Keenan, former Economics Editor for Independent NewspapersSinead Ryan, consumer and personal finance journalist with The Herald, and Ciarán Lynch TD, Chairman of the Committee on Finance, Public Expenditure and Reform. UCC economists will also contribute, including Robbie Butler, Seamus Coffey and Declan Jordan.

The conference comes as part of a string of economics events running from Monday 27th January – Monday 3 February.Economist and author David McWilliams will officially launch ‘Economics Week’ on Monday 27th January in Boole Lecture Theatre 1 at 6:30pm. The week will be concluded by John Fitzgerald, Research Professor at the Economics and Social Research Institute, on Monday 3rd February at 7pm in Kane Science Building G02. A full timetable is available here: http://www.ucceconomicsconference.com/

Speaking ahead of the event, conference convener Jamie Cullinan said, “This conference is intended to unite leading academics and practitioners in the field to discuss economic problems with a view towards finding a pathway into the future. Applying the discussion to matters of politics and policy will focus the conference on the most current topics in a continually challenging economic environment.”

“Thanks to our hard-working team, we are very happy to have such a fantastic line up from international and national commentators and economists. Many people have read Tim Harford and he has enthralled us with his writing, while we’ve seen the likes of Megan Greene and Sinead Ryan speaking at Kilkenomics where they proved very insightful commentators. Now more than ever economics is to the forefront of society. Economists have dug into real-world matters and tried to understand human behaviour.

“Importantly this discussion will take place in a college setting and will have the power to influence economic thinking into the future through the attending students, who will also be given an opportunity to question the prevailing economic thought and policy issues on the day.”

Tickets for the conference are €10, with a €5 rate for students, and are on sale both online (http://www.ucceconomicsconference.com/ )  and on campus. For further information please contact economics@uccsocieties.ie.

 

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And Estonia makes 11

Financial Transaction Tax campaign
Financial Transaction Tax campaign (Photo credit: Leonardo Domenici)

Late yesterday, Estonia joined the 10 countries that plan on implementing a Financial Transaction Tax (FTT), due to the lack of agreement on implementing an EU wide Tax.

The 11 countries who will implement the tax next year are:

  • Austria
  • Belgium
  • Estonia
  • France
  • Germany
  • Greece
  • Italy
  • Portugal
  • Slovakia
  • Slovenia
  • Spain

According to Commission President, Jose Manuel Barroso

“This tax can raise billions of euros of much-needed revenue for member states in these difficult times. [..] This is about fairness – we need to ensure the costs of the crisis are shared by the financial sector instead of shouldered by ordinary citizens.”

But where will this money go? One suggestion is that this tax revenue would go into a Eurozone budget as all 11 countries use the Euro. While Development NGOs argue that the revenue should go towards those most in need in developing countries.

The Tax this has a way to go before it comes into force, and still has to be approved by the majority of Member State’s at council level as well as the European Parliament.

The EU-wide tax was shelved following opposition from Ireland, Luxembourg, Malta, Poland, Sweden and the United Kingdom, who fear being at a disadvantage in the absence of a World-Wide Tax.

More states can still sign up to this, but until details on the amount of tax charged on financial transaction and where the revenue goes is agreed, it is doubtful if the number of states involved in this enhanced co-operation will increase..

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European Commission Seminar, UCC, 2 October

Interesting things often pop into my inbox, so here is one for all of you with interest in the EU and Economic Policy. I will be there, so do say Hi if you attend!

The European Commission Representation in Ireland invites you to an evening seminar on‘European Economic Policy – What’s in it for Ireland?’

Featuring presentations from local and national economic and political experts, this public event will provide you with an opportunity to voice your opinions and ask any questions you may have about the current economic situation. This event will take place from 6.30pm – 8.30pm on Tuesday, 2 October on the University College Cork campus.  Further detail, including information on the guest speakers, will follow shortly.  In the meantime, please RSVP to events@europeanmovement.ie or call 01 662 5815 to reserve a place at this free event.

I will update this once the speakers are confirmed.

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30th Amendment to Constitution – Text

A lunchtime protest by dislocated workers was ...

The Bill amending the Constitution to allow Ireland to ratify the Fiscal Compact is now available on the Oireachtas Website (PDF).

The bill proposes inserting a new sub-section 10 to Article 29 which deals with foreign affairs. The new section will read as follows:

10° The State may ratify the Treaty on Stability, Coordination andGovernance in the Economic and Monetary Union done at Brussels on the 2nd day of March 2012. No provision of this Constitution invalidates laws enacted, acts done or measures adopted by the State that are necessitated by the obligations of the State under that Treaty or prevents laws enacted, acts done or measures adopted by bodies competent under that Treaty from having the force of law in the State.

The Dáil will debate the amendment starting on Wednesday as it rushes to pass the amendment ahead of the referendum on May 31st. Once the Amendment has cleared all stages in the Dáil and Seanad a Referendum Commission will then be established.

Text of the current Constitution (PDF). Correct as of March 2010, not including the 29th Amendment approved by Referendum last October.

Portugal Approves Fiscal Compact

BERLIN, GERMANY - SEPTEMBER 01:  Portuguese Pr...

Portugal today became the first state to approve the Fiscal Compact. 25 of the 27 EU Member states signed up to the tightened budget rules. The United Kingdom and the Czech Republic are the only two not to sign up. It is interesting that Portugal were first to approve the treaty as they were the third country to get a bailout of the EU/ECB/IMF after Ireland and Greece.

The Portuguese Government were supported by the opposition Socialists in passing the pact which was approved by 204 votes to 24, with two abstentions.

Portuguese Prime Minister Pedro Passos Coelho told parliament that the pact represented a “moment of confirmation of the European consensus”

Antonio José Seguro, the Socialist leader, said: “This treaty is vital to Portugal staying in the euro.”

Mr Seguro said: “This treaty may be a response to markets, but it is not a response to the crisis and to the problems of Portuguese, to unemployment. It is an unbalanced treaty.”

Mr Seguro raises some valid points as the Pact also does not deal with issues of Bank Debt but it is part of a number of initiatives to try and fix the Crisis in the Eurozone.

Ireland will be voting on the Fiscal Compact on May 31st. Ireland will be the only country to hold a referendum on the pact.

Don’t forget you can read the Fiscal Compact here

Negotiations under-way on Promissory Note deal

The European Central Bank. Notice a sculpture ...
The European Central Bank. Notice a sculpture of the euro sign. (Photo credit: Wikipedia)

After last nights announcement in the Dáil by Finance Minister Michael Noonan, full statement on Karl Whelan’s blog, negotiations are under way between Central Bank Governor, Patrick Honohan, and the European Central Bank.

The Promissory Note, basically a Government IOU to the Anglo Irish Bank, is worth over €3.1 billion and is due for payment on the 31st of March, which is also the day of the Fine Gael Ard Fheis in Dublin.

The prospective plan is to swap the Promissory Note for a Government backed bond that will be due for repayment in 2025. This will give the Government some breathing space on time, but crucially will mean that the €3.1 billion can be used to help shore up the budget. That bond will also be used by the IBRC as collateral in seeking emergency loans from the Central Bank.

According to the Irish Independent the basic details of the deal are as follows as the more intricate details still need to be ironed out:

  • The €3.1bn debt due on March 31 will be deferred up to 2025.
  • The debt will technically be repaid. There will be no default.
  • There will be no net cost to the State.
  • The deal is estimatesd to save the taxpayer €80m in interest this year.
  • A new government bond, repayable in 2025, will be issued to cover the cost of the repayment.

While Irish Economy notes that a number of questions still need to be answered this is hopefully a good deal for Ireland. It will also hopeful spur on the Troika (EU, ECB and IMF) in renegotiating the overall debt of the bailout of Anglo Irish Bank and Irish Nationwide now known as the Irish Bank Resolution Corporation.

UPDATE: The Sunday Business Post have an excellent explanation of the deal

Noonan announces deal on Promissory Note

This is a photograph of the Dáil chamber, Lein...
This is a photograph of the Dáil chamber, Leinster House, Kildare Street, Dublin Ireland. It is the chamber and seat of Irish Government where Irish parliamentarians (TD's) govern Ireland. The photograph was taken on 28th of June, 2008 at the inaugural opening of the Houses of the Oireachtas (parliament) for a 'family fun day'. This we were told (by the guides) was the first time that photography was permitted inside the Dáil chamber. (Photo credit: Wikipedia)

Tonight speaking in Dáil Eireann, Finance Minister Michael Noonan, announced that a deal had been brokered on the Anglo Promissory Note which is due to be repaid. An excerpt from his speech from politics.ie

Firstly, there is an issue that I wish to bring to the attention of the house as the Government has always committed that we would inform the Dáil about any development concerning the payment of the promissory note at the end of this month.

In more recent months, we have been involved in technical discussions on reducing the burden of debt associated with the recapitalization of the banks. In particular our focus has been on the Promissory note arrangement that was put in place to fund the Irish Bank Resolution Corporation – formerly Anglo Irish Bank and Irish Nationwide. This is an arrangement, which requires the State to make cash payments of €3.06 billion each year to IBRC. There have been some developments on this issue during the day.

The discussions with the European authorities on the general issue continue but we are now negotiating with the EU authorities, and principally with the ECB, on the basis that the €3.06 billion cash installment due from the Minister to IBRC on 31 March 2012 under the terms of the IBRC promissory note could be settled by the delivery of a long term Irish Government Bond. The details of the arrangement have still to be worked out.

More as details become clear.

House of Commons to Debate Loan to Ireland

House of Commons of the United Kingdom
Image via Wikipedia

This Evening the House of Commons will be debating the Loans to Ireland Bill which will allow the United Kingdom to give a loan of £3,250 million to Ireland.

The plan is that the bill will finish off all stages today. It will pass the Committee stage in the whole House.

Already today the issue has been raised four times in the House of Commons. The first time by Mark Reckless, MP for Rochester and Strood, during Northern Ireland Questions, in relation to assets held by NAMA in Northern Ireland and suggested that maybe some of these assets could be used as collateral in the loan. The second time was in relation to the effect of the economy in the Republic on the North. Northern Ireland Minister, Hugo Swire MP for East Devon, said that it was important that the UK was seen as part of the solution for Ireland and not the problem.

During Prime Ministers Questions, Mark Reckless MP, again, raised the issue of the loan to Ireland and suggested that the UK does not follow the wishes of the German Finance Minister. David Cameron in his response agreed with Mark Reckless and said that he was glad that the UK could come to Ireland’s aid.

I will be watching the debate on the bill and it will be interesting to see some of the remarks that are made.

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Bailing out the Banks

2 euro coins
Image by Landahlauts via Flickr

So last night it finally happened. We formalised the bailout. We are taking an €85 billion loan. We will be paying an interest rate of about 5.8%. We will be loaning money to ourselves.

Yes, you read that last line right.

€17.5 billion will be coming for the National Pension Reserve Fund and the other cash on hand funds.

Who’s fault is this? The Banks.

€35 billion of this is for them. €50 billion is to cover state deficits. They are there because we gave the banks money!

It is a disgrace.

Links of Interest:

A difficult but essential deal – Irishtimes.com

€85bn rescue package – Unwelcome return to penal times – IrishExaminer.com

At least we know the grim reality – Independent.ie

Announcement of joint EU – IMF Programme for Ireland – Corkpolitics.ie

It’s All about Money – JasonoMahony.ie

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