Latvian PM Valdis Dombrovskis was roundly praised this week at the Peterson Institute for International Economics in Washington. (If the global army of economic policymakers has an elite special forces unit, it is Peterson.) Leading a coalition government, Mr Dombrovskis has elected to plough on with implementing the cuts required under an IMF-EU programme to make a fiscal adjustment of more than 10 per cent of GDP.
The parallels with Greece are obvious, including the problem of inflicting huge damage by choosing the devaluation route. Latvia has a pegged currency rather than actually being in the euro, but such a large proportion of mortgages and other consumer loans are denominated in euros that Mr Dombrovskis says a devaluation wouldn’t help much anyway. Continue reading »
Always entertaining to see US Treasury secretary Tim Geithner in front of the Senate finance committee, like a beleaguered nephew being harangued by a posse of irascible uncles. And the occasional aunt.
Charles Schumer, number 3 Democrat in the Senate, is threatening to bring his currency bill against China in the next two weeks, which would allow US companies to include estimates of currency undervaluation in antidumping and countervailing duty calculations. (Yesterday he also put out a press release alleging that China was exporting honey by relabelling it as the product of other countries, a practice he immortally dubbed “honey laundering”). Continue reading »
File under “counterintuitive”.
The WTO staff’s biennial survey of Chinese trade policy (discussed at the WTO on Monday, but the document was only publicly released today), had a lot of rude things to say about Beijing’s system of export taxes and restraints, particularly the ones on raw materials. Continue reading »