Monthly Archives: June 2013

Greek prime minister Antonis Samaras, centre, holds a cabinet meeting this week.

Just how off track is Greece’s €172bn second bailout? When the FT reported that a new €3bn-€4bn financing gap had opened up in the programme, EU and International Monetary Fund officials went out of their way to insist there wasn’t a gap at all.

“There is no financial gap. The programme is fully financed for at least another year, so there is no problem, on the premise that we reach a final agreement on the review in July,” said Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup.

IMF spokesman Gerry Rice weighed in with a written statement: “If the review is concluded by the end of July 2013, as expected, no financing problems will arise because the program is financed till end-July 2014.”

Notice the caveats, however. Both Dijsselbleom and Rice say there won’t be a shortfall – as long as the IMF is able to distribute its next €1.8bn aid tranche before the end of July. Why? Because of the new financing gap, which means the Greek programme essentially runs out of money in July 2014. The IMF must have certainty that Greece is fully financed for 12 months or it can’t release its cash, so after July, it must suspend its payments.

Lest any doubt remain, let’s turn to the European Commission and IMF reports on Greece, which make this abundantly clear. When the second bailout programme began early last year, the European Commission’s initial report contained a chart showing projected quarter-by-quarter aid payments that looked like this:

In the latest review, issued earlier this month, the same chart looked like this:

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Today’s OECD International Migration Outlook takes a comprehensive look at the fiscal impact of immigration, but also has some interesting numbers on destination and origin countries.

Britain has been the destination of choice for immigrants from OECD nations in the past five years, but tiny Belgium is not far behind. Also Germany, where unemployment is now lower than it was before the financial crisis hit in 2008, is a close third choice.

Outflows of population, predictably are largest from countries with the highest unemployment rates, OECD data show.

OECD 1 Read more

A leading Iranian presidential candidate has told women to have more babies.

The country’s top nuclear negotiator Saeed Jalili, who has championed “resistance” against the west, is a staunch conservative. In a recent campaign speech he lashed out at the western view that empowering women can act “as a tool” to speed up economic development. In Islam, he said, “the core identity of women lies in their motherhood”.

But he’s fighting against the tide of Iranian demography, which has undergone a radical shift in the past three decades.

Iran fertility

Source: United Nations Population Division

Iranian total fertility rates (TFR) have collapsed from 6.49 per woman in 1974 to 2.17 in 2000 and 1.89 as at 2006. Demographers regard a TFR of 2.1 per woman as what is needed to keep a population stable. So the Iranian birth rate is not even enough to maintain current population levels, let alone to expand them.

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George Osborne’s attempt to flatter the official headline measures of the public finances came unstuck on Wednesday after the UK Statistics Authority reprimanded the Office for National Statistics for treating the Treasury’s raid on the Bank of England as equivalent to tax revenues.

Upholding a complaint from the Financial Times about the ONS decision, the statistics watchdog called for a review of the headline measures of public borrowing and debt.

The decision will stop the chancellor from claiming borrowing is lower merely because funds have been moved from one part of the public sector to another, and demonstrates that the UKSA is willing to criticise the statistical work of its own government department as well as ministers.In November, Mr Osborne announced he would repatriate to the Treasury the funds building up under the quantitative easing scheme in the Bank of England arising from interest payments on the debt owned by the bank.

The Treasury hoped this raid would improve headline figures of government borrowing, helping Mr Osborne to meet his fiscal rules and say borrowing was falling, despite the weak economy.

Initially the ONS agreed with the Treasury’s arguments, but this has now been overturned by the UKSA, which said the counter arguments made by the FT were “more persuasive”.

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‘Finding government statistics is not easy. Both expert users and occasional users struggle to navigate their way through the multiple places in which statistics are published.’

UK House of Commons public administration select committee report, May 2013

How hard can it be to find a few statistics? And since when is this a matter for a parliamentary committee?You’ve obviously never tried to use the Office for National Statistics website. Try a simple-sounding query – such as what households are currently spending in a week, or retail price inflation for the past 50 years – and you are highly unlikely to get anywhere using the search window. It’s like Google on an acid trip, throwing several thousand random results at you.

It can’t be that hard.

I recently sat down with one of the UK’s finest economic journalists, Evan Davis of the BBC, and we tried to get the results we wanted either through the search window or by trying to second-guess the tormented mind of the person who constructed the branches of the database’s hierarchy. It was hopeless. Even when Mr Davis used his expertise to shortcut the process, we found ourselves thwarted at every turn. (As an aside, Google delivered the correct result in seconds.)

I am sure Chris Giles, the FT’s economics editor, would not be defeated
so easily.

Perhaps not, but Mr Giles testified to the public administration committee and took the trouble to run through, step by step, just how difficult it would be to find the answer to a simple, practical statistical question – such as whether unemployment today is lower or higher than it was in the mid-1990s. For an expert user, who knows that the relevant code for the data in question is MGSX, finding an answer to that question is slow and awkward. For a more typical user, finding an answer might be impossible.

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Chris Cook

The NSA data-collection story has prompted a lot of reporting about “metadata” – information about communications between individuals. As the FT has reported:

The practice was revealed by The Guardian, which published an order – signed by the secret Foreign Intelligence Surveillance Court – instructing Verizon to give the NSA the metadata, or information logs, for the calls “on an ongoing daily basis”.

Call logs really matter. Even if you cannot hear the calls, metadata – knowing who called whom – is massively important. It allows you to build a picture of who knows whom and how well. This sounds trivially true, but computing power means it’s extremely easy to pull out this data in real time and in great detail. And if you spot a suspicious group, you can then get another warrant to listen in on their conversations.

Here is an example: I’ve put my Facebook account details into a piece of analytical software – and, 10 seconds later, this is my life:

This is a map of who my friends are based solely on knowing which of them is friends of the others. Nothing else. Just Facebook friend lists. It has worked out that the big clusters are groups of people who know one another – so probably have something in common. The ones at the centre of the packs know everyone else around them, and those at the edge are more peripheral.

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Kate Allen

China has declared war on European wine producers, in an apparent tit-for-tat spat about solar panel tariffs.

The move is a canny one on China’s part. Although European wine-makers have historically not been favoured by Chinese consumers, that has begun to change. Between 2008 and 2012 Chinese consumption of European wines rocketed by 445 per cent. This is despite the fact that duties and taxes already account for around half the price of the average imported bottle. Read more

Kate Allen

The engine that is driving the world economy has changed in nature quite radically over the past couple of decades, as our analysis today reveals.

Much of this economic momentum comes from big economies that are expanding relatively slowly. But who, in pure year-on-year percentage growth terms, is leading the pack this year? Read more

Kate Allen

Youth unemployment is a hot topic at the moment. Both the OECD and the UN have warned that the spiralling rates across many advanced economies will have severe consequences.

Nearly a quarter of European under-25s are now unemployed, the latest reported figures show. And concerns reached a new pitch last week when it was revealed that Italian youth unemployment had topped 40 per cent. Read more