• Feb. 13, 2006

    Energy Security: Why Markets Can Help

    «Energy security, in various interpretations, has become a standing issue on the G8 agenda», says the G8's chair, ahead of the St-Petersburg summit next July. This is indeed quite topical: Recent events have shown that we cannot take for granted that our houses will be correctly heated next winter, that power supply will not be rationed or that petrol stations will be open. To name but a few: when hurricane Katrina devastated some of the largest US refineries, European and Asian refiners were not able to compensate the loss of supply, thus, shortages happened; when Gasprom, Europe's biggest natural gas supplier, stopped gas supplies to Ukraine, the gas pressure fell in Poland, Germany, Italy and many other European countries; when Iran decided to resume its nuclear fuel program, markets shivered at the idea that the global oil supply could be reduced by 3 million barrels per day (3.8% of global production), as already happened in 1979-1980.

  • Jan. 30, 2006

    Regional wages: a solution to the lack of regional mobility

    Regional disparities among EU countries remain substantial. In the second half of the nineties, the coefficient of variation of income per capita across 50 regions in the EU was almost double than across the 49 states of the continental US. Policy makers will then need to make a clear choice, in favour of greater labour mobility or higher wage flexibility. Otherwise, the combination of wage rigidity and limited labour mobility will continue to lead to unacceptably high unemployment differentials among regions.

  • Jan. 25, 2006

    Davos, Globalization and the Poor

    Are the poor made better off by globalization, as most orthodox economists and certainly the IMF and World Bank believe? Or are the poor hurt by global competition, as many anti-globalization activists would suggest? The orthodox view (the so-called «Washington Consensus») is frequently wrong: at best, openness to trade needs to be accompanied by many other policies that will allow the poor to take advantage of what globalization has to offer. New evidence suggests that there are four important lessons world leaders need to take into account.

  • Jan. 16, 2006

    Protectionists without borders

    Representatives from 150 member countries of the World Trade Organization met in mid-December in Hong Kong, aiming to expand trade flows and improve trade rules. The city's enormous convention center welcomed thousands of delegates representing governments, the private sector, NGOs, journalists, and multilateral organizations. Outside the huge facility, tens of thousands of anti-globalization activists once again protested, against neo-liberalism and trade liberalization. An unnecessary protest, since the gathering proved there is no great conceptual difference between the views of those inside and outside the great WTO bi-annual media theater.

  • Jan. 12, 2006

    The Value-Added Contribution: A Flawed Strategy

    During his seasonal greetings to the press, President Chirac revealed that he had asked the cabinet to review the tax base of employers' social contributions. The reform he proposes would penalize capital intensive industries relatively to labour intensive ones; in the long term, it would backfire.

  • Jan. 6, 2006

    The Gas War: A Monumental Russian Mistake

    Early on January 4, Gazprom and Ukrainian gas officials reached an agreement on gas deliveries to Ukraine in Moscow. This was in many ways an excellent agreement, but most of all so for Ukraine. -->First, it is a five-year agreement lasting till the end of 2009, which means that stable conditions for gas deliveries should have been accomplished. Amazingly, Russia is offering Ukraine five years of stable natural gas prices at a time of rising gas prices and increased gas scarcity, while most countries face annual price revisions.

  • Dec. 24, 2005

    British Presidency: the sad final act

    The long battle over the EU budget ended last week with an agreement that leaves everything unchanged. It was a rare display of hypocrisy. The horsetrading involved just peanuts for some of the major actors involved in the deal. Governments running yearly budgets of the order of 700 billion euros or more were fighting over a few million Euros. The final result is a six-year, 2007-13, financial package largely concentrated on transfers to agriculture (42 per cent of the budget) benefiting roughly 3 per cent of the EU population. Another 35 per cent of EU spending is allotted to structural funds whose effectiveness is highly controversial.

  • Dec. 12, 2005

    Chile, Mexico & Brazil: the triumph of pragmatism

    In December, the Chileans celebrated a new round of elections. However, beyond this event, there is yet another point worth celebrating: the profound and subtle transformation which is taking place in Chile and in Latin America stemming from the surge of economic pragmatism outside the predetermined paths of any rigid ideological model. -->The example of Chile The Chilean example is, from this point of view, exemplary (and perhaps unique), where the privatization of pension funds remained within the framework of a jewel of regulation of top quality institutional craftsmanship. Year after year, the system was modified and adjusted in order to improve. Today, the Chilean regulation body, the Superintendencia, is one of the most credible, technically prestigious and highly esteemed institutions in the country, making it a strong institutional mast.

  • Dec. 12, 2005

    Security and Defence: the mediocre balance sheet of British presidency

    With the EU in a deep malaise as a consequence of the French and Dutch rejection of the constitutional treaty, much is being made of the new role of European Security and Defence Policy (ESDP), suddenly recast as the one moving part of an otherwise paralysed European integration process. The establishment of the EU’s “battle groups” as Europe’s rapid action force, the vital role of the EU in keeping the peace first in Bosnia and now in Atjeh, the ramping-up of the European Defence Agency: these and others can be cited.

  • Dec. 12, 2005

    How the WTO increases your blood pressure

    By now you should be getting used to the desperate headlines. Maybe they’ve spoiled your breakfast, or worse, your day. WTO Meeting in Hong Kong to Fail! Doha Round to Collapse in Hong Kong! Let the WTO Fail! The rising blood pressure of journalists, bloggers, NGO scribblers, and let’s be honest the occasional academic, as they plumb the depths of their rhetorical skills to catch your eye with something interesting to say about the WTO, must be causing their doctors and loved ones alarm. The people who really count on WTO matters --government leaders, WTO ambassadors in Geneva, and the WTO’s new head, Pascal Lamy-- are as cool as a cucumber. They’ve been here before and, if you’re old enough to be reading this article, so probably have you.