Catching up after being off around Europe. Here’s a links post.
You may recall that the EU fiscal pact included at least some warm words about the idea of limiting excessive trade surpluses (as well as deficits) within the eurozone. This is progress, but of course the devil is in the detail. The European Commission’s demonologists were called in to work out the detail. Jean Quatremer reports:
Ainsi, la balance des comptes courants est censÃ©e Ãªtre comprise entre – 4% et + 6% du PIB au cours des trois derniÃ¨res annÃ©es. Et, miracle, celle de lâ€™Allemagne est de + 5,9 % !
I.e. the reference range is defined as a three-year moving average of the current account balance between -4% and +6% of GDP. Why is it not symmetrical around zero? Not that there’s a specific argument that it should be, but it’s telling…because Germany’s CA surplus is exactly +5.9% of GDP. Trebles all round.
For the first time on record, the share of Spanish GDP accounted for by profits exceeded that accounted for by wages.
Iceland’s cramdown of mortgages exceeding 110% LTV is considered beneficial, at least by Bloomberg and by Lars Christensen of Danske Bank.