VACACIONES OCTUBRE 2016 (CLICK ON LINK)
The parable of Ticino
The harsh lessons from Switzerland for Brexiteers
Fully 90% of those who toil in its workshops are Italian, as are the engineers who design its moulds and the managers who seek new export markets for aerospace and biomedical components. Mr Puffi would like to employ more locals, but says the Swiss prefer banking and public-sector jobs. Northern Italians, by contrast, value industrial work and have the technical skills he needs. Their country’s economic woes make them “hungrier”. And there are a lot more of them.
For others, that is precisely the problem. “Ticino is confronted with Italy,” says Norman Gobbi of the Ticino League, a local party that backs immigration curbs. “And Italy is an example of the non-functioning of the EU.” Switzerland, a small, federal construct that protects its sovereignty furiously—it became a full UN member only in 2002—is in many respects a curiosity. Its relationship with the EU, governed by a complex set of bilateral deals, is no exception. But its recent experience provides lessons for others, not least a Brexiting Britain, on how far European states outside the EU can set the terms of their relationship with the union.
Since 2002 all EU citizens have had the right to live and work in Switzerland (and vice versa).
Millions of Italians live within 50 kilometres of the border. Tens of thousands of them commute across it every day. In 2014 concerns that Italians were undercutting local wages drove 68% of Ticinese to vote “yes” in a national referendum that called for curbs on immigration and cross-border commuting. The proposal squeaked through by 20,000 votes. Some credit the Ticinese with its victory.
In doing so they landed Switzerland with a giant headache. A “guillotine” clause in Switzerland’s accords with the EU means that unilaterally overturning the free-movement provisions jeopardises the rest of the agreements reached in 2002, which cover everything from procurement to agriculture. One government study found that scrapping all this could, by 2035, leave Swiss GDP 7.1% lower than it would otherwise be.
Owing largely to immigration, the Swiss population has grown by over 10% in a decade. As a country of nothing but “water and rocks”, in the words of Paolo Beltraminelli, the centrist president of Ticino, Switzerland has always had to look abroad to plug labour gaps. But anti-immigrant populists have a deadly weapon: the popular initiative, which triggers lots of referendums. In 1970 a proposal to cap immigrants at 10% of the total population (bar Geneva) almost succeeded; today the figure is 23%. Votes against burqas and minarets have followed, as concerns about asylum-seekers and Muslims were added to the mix.
The EU was at first minded to compromise with Switzerland over free movement. But that changed after last year’s election in Britain returned a government with a mandate to renegotiate its EU membership. Fearful that concessions to the Swiss would be seized on by the British, the EU toughened its stance; the Brexit vote in June made things worse. Now the Swiss look set to back down. This week the lower house of parliament approved a law that encourages employers to recruit in Switzerland before looking abroad; hardly the strict curbs demanded by the right-wing Swiss People’s Party (SVP) that proposed the referendum.
Infuriated, the SVP could seek a second referendum to overturn the law, or to tear up the bilateral deals entirely. The Ticinese won’t wait: on September 25th they are set to approve a local initiative, backed by Mr Gobbi, to privilege Swiss workers over foreigners. The proposal is a legal nonsense; such matters are national rather than cantonal responsibilities. Much more of this sort of thing, says Mr Puffi, and he will move Precicast to Italy.
Given the choice, Swiss voters tell pollsters they would not ditch the accords with the EU to cut immigration. But hardliners think the backlash against migration across the EU means that one day Brussels will have to take a less rigid stance; and that it is in the EU’s interest to keep Switzerland happy. The parallels with the British debate are irresistible: Brexiteers, too, argue that the EU will have to bow before the will of referendum voters. Yet Britain’s vow to cut immigration from the EU will mean losing some access to the single market, possibly including the “passporting” rights that allow financial firms to operate freely across the EU. Confronted with the potential collapse of Britain’s most important trading relationship, the promise to keep out Polish workers will look less compelling, or so some pro-EU voices suggest.
Britain will face a similar dilemma. Whatever access it maintains to the single market, the rules will inevitably change; if Britain does not apply them automatically it will be progressively excluded from it. Britain may be far larger than Switzerland, a small country surrounded by the EU; and its security and police ties with the rest of Europe give it extra clout in striking a deal. But like Switzerland, Britain will face tough questions about what it means to preserve sovereignty when its biggest trading partner is making rules over which it will have no say.
Immigration could be the least of its worries.
Photo: Associated Press
China’s Currency? That’s the Least of the Problems for the Next U.S. Leader
China’s ambitious rise presents issues far more complex than Trump’s outdated yuan manipulation charges
By Andrew Browne
SHANGHAI—In his video documentary “Death by China” the economist Peter Navarro, a Donald Trump adviser, promptly shows a Chinese dagger plunging into the heart of America, as blood spurts from the wound.
Almost as quickly, the Republican presidential nominee raised the Chinese threat in his debate with Hillary Clinton on Monday night. He identified China as a currency cheat that steals American jobs. China, he said, “is the best ever at it.”
Except that Mr. Trump, like many a general, is fighting the last battle. His opponent’s weapons and tactics have changed.
Indeed, U.S. politicians of all stripes have consistently failed to appreciate both the scope of China’s ambitions and, above all, the extent of the adjustments that will be required within America to respond effectively.
When President Obama took office in 2009, the Chinese economy was less than a third the size of America’s. It’s now 60% as big—and by some calculations is already larger.
Back then, China’s investments in the world were modest, mainly state-owned companies acquiring mining assets in Africa and other developing economies. Last year, China’s outbound investment flows exceeded inflows and they have become far more sophisticated.
The latest dazzling deal: China’s richest man, Wang Jianlin, who already controls America’s largest movie theater chain, seeks to buy control of Hollywood’s Dick Clark Productions, which stages the Golden Globe Awards.
In another contrast from 2009, China was then rebuilding after a devastating earthquake that revealed serious equipment shortages in the Chinese military, which lacked heavy-lift helicopters and transport planes to reach the disaster site in Sichuan province.
Just this week, in a startling illustration of how China’s economic might has since translated into military muscle, Chinese bombers and fighters flew past Japanese islands to the Western Pacific on a route such a large sortie of planes had never traveled before.
The biggest change since then, though, may be psychological. The 2008 collapse of Lehman Brothers convinced the Chinese leadership that America’s best days were behind it.
The next American president must face a China that feels assured of its unstoppable ascendancy, one that no longer seeks merely to game the American-led global trading system by manipulating its currency, or dumping steel. The new China increasingly aspires to set the rules.
After all, China now has many of the world’s largest industries, and its expanding middles classes are the spur for innovation in products and services that are set to become a huge driver of global growth. Access to its markets is a major new battle ground.
Mr. Trump, or Mrs. Clinton, can expect an early test from a Chinese leadership eager to underline the message that China is no longer prepared to accept a position as America’s junior.
That could take the form of a military challenge. China has recently shown signs it may be preparing to build another fortification in the South China Sea on the Scarborough Shoal within striking distance of Manila and military bases used by American forces. Or, it could even be another tilt at the American institutional order, building on the success of the Asian Infrastructure Investment Bank, which Washington saw as a rival to the World Bank.
And, despite Mr. Trump’s exhortations, the low-end American factory jobs lost to China won’t return. In fact, some of them are now leaving China for countries with lower labor costs, like Vietnam. Traditional manufacturing in China is struggling, too.
While Mr. Trump is fixated on the U.S.-China trade gap—according to Mr. Navarro’s documentary, fueled by “slave labor” and other abuses—China is focused on higher value production and emerging technologies as it rebuilds an economy around domestic consumption and services rather than exports and investment. That means everything from robotics to artificial intelligence. On Sunday, China introduced the world’s largest radio telescope, capable of searching for signals from distant galaxies, and possibly extraterrestrial life.
These are the kinds of projects that inspire the Chinese leaders, even as they grapple with legacy problems from the old economy—a mountain of bank debt, polluted air and unfunded pension obligations.
Swaths of blue-collar America may be suffering, but the country as a whole is nowhere near death.
No matter how you measure it—high-quality patents, license fees, college rankings, financial depth—China isn’t even close. The real threat is that America squanders its extraordinary advantages. The dagger pointed at America’s heart, if there is one, is gripped in its own hands.
The Return of Fiscal Policy
NEW YORK – Since the global financial crisis of 2008, monetary policy has borne much of the burden of sustaining aggregate demand, boosting growth, and preventing deflation in developed economies. Fiscal policy, for its part, was constrained by large budget deficits and rising stocks of public debt, with many countries even implementing austerity to ensure debt sustainability. Eight years later, it is time to pass the baton.
Les doy cordialmente la bienvenida a este Blog informativo con artículos, análisis y comentarios de publicaciones especializadas y especialmente seleccionadas, principalmente sobre temas económicos, financieros y políticos de actualidad, que esperamos y deseamos, sean de su máximo interés, utilidad y conveniencia.
Pensamos que solo comprendiendo cabalmente el presente, es que podemos proyectarnos acertadamente hacia el futuro.
Gonzalo Raffo de Lavalle
Las convicciones son mas peligrosos enemigos de la verdad que las mentiras.
Quien conoce su ignorancia revela la mas profunda sabiduría. Quien ignora su ignorancia vive en la mas profunda ilusión.
“There are decades when nothing happens and there are weeks when decades happen.”
Vladimir Ilyich Lenin
You only find out who is swimming naked when the tide goes out.
No soy alguien que sabe, sino alguien que busca.
Only Gold is money. Everything else is debt.
Las grandes almas tienen voluntades; las débiles tan solo deseos.
Quien no lo ha dado todo no ha dado nada.
History repeats itself, first as tragedy, second as farce.
We are travelers on a cosmic journey, stardust, swirling and dancing in the eddies and whirlpools of infinity. Life is eternal. We have stopped for a moment to encounter each other, to meet, to love, to share.This is a precious moment. It is a little parenthesis in eternity.
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