January, 23 2015, 02:30pm EDT
For Immediate Release
Contact:
Dan Beeton, 202-239-1460
New Paper Concludes that Greece Will Need Better Macroeconomic Policies to Exit from Mass Unemployment
WASHINGTON
A new report from the Center for Economic and Policy Research (CEPR) finds that Greece will need a fiscal stimulus if it is to emerge from years of mass unemployment in the near future. The paper, "The Greek Economy: Which Way Forward?" by Mark Weisbrot, David Rosnick and Stephan Lefebvre notes that after six years of recession, Greece has completed one of the largest adjustments in the world, with import spending falling 36 percent and the government achieving the largest cyclically adjusted primary budget surplus in the eurozone.
"The adjustment is done, with the majority of the Greek people having paid a terrible and mostly unnecessary price for it," CEPR Co-Director and lead author of the paper Mark Weisbrot said. "Now there needs to be a program to restore employment, instead of the current program which promises mass unemployment for years to come."
Media reports and economic forecasts have been upbeat about the return to positive GDP growth in Greece in 2014, currently estimated at 0.6 percent. But the report cautions that "Greece's return to growth last year was not a result of any success attributable to the policies implemented since the economy went into crisis, but rather to the end of the fiscal consolidation." The cyclically adjusted budget surplus - which measures the government's fiscal tightening -- moved from 5.7 percent in 2013 to 6.0 percent of GDP in 2014, or just 0.3 percentage points. In the three years prior, the adjustment had been 3.2 percent of GDP (2012-13), 3.8 percent of GDP (2011-12), and 5 percent of GDP (2010-11). The paper states: "It should be obvious that this huge drop-off in fiscal tightening would be the main cause of the return to growth."
The paper describes the considerable economic and social costs of Greece's adjustment, with output down by about 26 percent and unemployment currently at 25.5 percent, with youth unemployment at 49.6 percent. "Nominal wages have fallen by 16 percent in the private sector ...and by 23.5 percent overall. The government has laid off about 19 percent of its work force." Yet the IMF forecasts more hardship in the years to come, projecting unemployment to be 15.8 percent in 2018 - a decade after the crisis began - and in 2019 for Greece to be more than 9 percent below its pre-crisis GDP of 12 years earlier.
Greece's current recovery is fragile, and mandated large primary budget surpluses and other austerity measures will continue to be a drag on economic growth, the report explains.
"There are policy measures that can lead Greece out of this dark period and into a sustained, robust recovery, but these are not the ones that the European authorities have imposed on Greece," Weisbrot said. "Rather, these would be options that have worked in other countries experiencing similar crises and recessions: most importantly, an economic stimulus to replace lost private sector demand."
Weisbrot noted that the European Central Bank could help Greece's recovery with its new quantitative easing program, by buying Greek sovereign bonds and keeping its interest rates low, as well as other measures to ensure financial stability.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.
(202) 293-5380LATEST NEWS
Climate Crisis to Cost Global Economy $38 Trillion a Year by 2050
"This clearly shows that protecting our climate is much cheaper than not doing so, and that is without even considering noneconomic impacts such as loss of life or biodiversity," a new study's lead author said.
Apr 18, 2024
The climate crisis will shrink the average global income 19% in the next 26 years compared to what it would have been without global heating caused primarily by the burning of fossil fuels, a study published in Nature Wednesday has found.
The researchers, from the Potsdam Institute for Climate Impact Research (PIK), said that economic shrinkage was largely locked in by mid-century by existing climate change, but that actions taken to reduce emissions now could determine whether income losses hold steady at around 20% or triple through the second half of the century.
"These near-term damages are a result of our past emissions," study lead author and PIK scientist Leonie Wenz said in a statement. "We will need more adaptation efforts if we want to avoid at least some of them. And we have to cut down our emissions drastically and immediately—if not, economic losses will become even bigger in the second half of the century, amounting to up to 60% on global average by 2100."
"I am used to my work not having a nice societal outcome, but I was surprised by how big the damages were."
Put in dollar terms, the climate crisis will take a yearly $38 trillion chunk out of the global economy in damages by 2050, the study authors found.
"That seems like… a lot," writer and climate advocate Bill McKibben wrote in response to the findings. "The entire world economy at the moment is about $100 trillion a year; the federal budget is about $6 trillion a year."
This means that the costs of inaction have already exceeded the costs of limiting global heating to 2°C by six times, the study authors said. However, limiting warming to 2°C can still significantly reduce economic losses through 2100.
"This clearly shows that protecting our climate is much cheaper than not doing so, and that is without even considering noneconomic impacts such as loss of life or biodiversity," Wenz said.
The damages predicted by the study were more than twice those of similar analyses because the researchers looked beyond national temperature data to also incorporate the impacts of extreme weather and rainfall on more than 1,600 subnational regions over a 40-year period, The Guardian explained.
"Strong income reductions are projected for the majority of regions, including North America and Europe, with South Asia and Africa being most strongly affected," PIK scientist and first author Maximilian Kotz said in a statement. "These are caused by the impact of climate change on various aspects that are relevant for economic growth such as agricultural yields, labor productivity, or infrastructure."
However, Wenz told the paper that the paper's projected reduction was likely a "lower bound" because the study still doesn't include climate impacts such as heatwaves, tropical storms, sea-level rise, and harms to human health.
Unlike previous studies, the research predicted economic losses for most wealthier countries in the Global North, with the U.S. and German economies shrinking by 11% by mid-century, France's by 13%, and the U.K.'s by 7%. However, the countries set to suffer the most are countries closer to the equator that have lower incomes already and have historically done much less to contribute to the climate crisis. Iraq, for example, could see incomes drop by 30%, Botswana 25%, and Brazil 21%.
"Our study highlights the considerable inequity of climate impacts: We find damages almost everywhere, but countries in the tropics will suffer the most because they are already warmer," study co-author Anders Levermann, who leads Research Department Complexity Science at PIK, said in a statement. "Further temperature increases will therefore be most harmful there. The countries least responsible for climate change, are predicted to suffer income loss that is 60% greater than the higher-income countries and 40% greater than higher-emission countries. They are also the ones with the least resources to adapt to its impacts."
Wenz told The Guardian that the results were "devastating."
"I am used to my work not having a nice societal outcome, but I was surprised by how big the damages were. The inequality dimension was really shocking," Wenz said.
Levermann said the paper presented society with a clear choice:
It is on us to decide: Structural change towards a renewable energy system is needed for our security and will save us money. Staying on the path we are currently on, will lead to catastrophic consequences. The temperature of the planet can only be stabilized if we stop burning oil, gas, and coal.
McKibben, meanwhile, argued that the findings should persuade major companies to embrace climate action for self-interested reasons. He noted that most corporate emissions come from how company money is invested by banks, particularly in the continued exploitation of fossil fuel resources.
"If Amazon and Apple and Microsoft wanted to avoid a world where, by century's end, people had 60% less money to spend on buying whatever phones and software and weird junk (doubtless weirder by then) they plan on selling, then they should be putting pressure on their banks to stop making the problem worse. They should also be unleashing their lobbying teams to demand climate action from Congress," McKibben wrote.
"These people are supposed to care about money, and for once it would help us if they actually did," he continued. "Stop putting out ads about how green your products are—start making this system you dominate actually work."
Keep ReadingShow Less
Congressional Progressives Unveil 'Bold' Agenda for Second Biden Term
The Congressional Progressive Caucus says its legislative blueprint for 2025 and beyond aims to "deliver equality, justice, and economic security for working people."
Apr 18, 2024
The Congressional Progressive Caucus on Thursday published a "comprehensive domestic policy legislative agenda" for U.S. President Joe Biden's possible second White House term that seeks to "deliver equality, justice, and economic security for working people."
The CPC's Progressive Proposition Agenda is a seven-point plan aimed at lowering the cost of living, boosting wages and worker power, advancing justice, combating climate change and protecting the environment, strengthening democracy, breaking the corporate stranglehold on the economy, and bolstering public education.
"Progressives are proud to have been part of the most significant Democratic legislative accomplishments of this century. We have made real progress for everyday Americans—but there's much more work to be done," Congressional Progressive Caucus Chair Pramila Jayapal (D-Wash.) said in a statement.
"That's why the Progressive Caucus has identified these popular, populist, and possible solutions," she added. "Democrats in Congress can meet the urgent needs people are facing; rewrite the rules to ensure majorities of this country are no longer barred from the American promise of equality, justice, and economic opportunity; and motivate people with a vision of progressive governance under Democratic majorities in the House and Senate and a Democratic White House."
Progressive lawmakers have already introduced bills for many items on the agenda, including a Green New Deal for Public Schools, expanding the Supreme Court, comprehensive voting rights protection, and legalizing marijuana.
Critics noted the conspicuous absence of Medicare for All—once a top progressive agenda item—and foreign policy issues including ending Israel's genocide, apartheid, occupation, settler colonization, and ethnic cleansing in Palestine.
Jayapal toldNBC News that the CPC is focusing its blueprint exclusively on domestic goals—especially ones it feels can be achieved.
"The way we came to this agenda is to say that we were going to put into this agenda things that were populist and possible... and affected a huge number of people," she said. "We haven't taken a position on particularly Israel and Gaza in the progressive caucus, and so that's not on here."
The CPC agenda is backed by a wide range of labor, climate, environmental, civil rights, consumer, faith-based, and other organizations.
"The Congressional Progressive Caucus is leading the way for Congress to address the major issues affecting working families, from reducing healthcare and housing costs to strengthening workers' rights to join unions, earn living wages and benefits, and have safe workplaces," Service Employees International Union president Mary Kay Henry said in a statement.
"SEIU is proud to partner with the CPC to move these priorities forward and build a more equitable economy in which corporations are held accountable for their actions," she added.
Mary Small, chief strategy officer at Indivisible, said: "House progressives were the engine at the heart of our legislative accomplishments in 2021 and 2022. They've continued that momentum to be true governing partners to the Biden administration as those laws and programs are implemented."
"That's why Indivisible is so supportive of the CPC's Proposition Agenda, a bold vision for progressive governance in 2025 and beyond. From reproductive rights to saving our democracy to economic security for all, the CPC is driving forward exactly the sort of legislative goals we want to see in our next governing moment."
That moment is far from guaranteed, with not only the White House hanging in the balance as Biden will all but certainly face former Republican President Donald Trump in November's election but also the Senate Democratic Caucus clinging to a single-seat advantage over the GOP. Republicans currently hold the House of Representatives by a five-seat margin.
Keep ReadingShow Less
'McCarthyism Is Alive and Well': Google Fires 28 for Protesting Israel Contract
"These mass, illegal firings will not stop us," said organizers. "Make no mistake, we will continue organizing until the company drops Project Nimbus and stops powering this genocide."
Apr 18, 2024
The peace coalition No Tech for Apartheid accused Google of a "flagrant act of retaliation" late Wednesday night as the Silicon Valley giant announced it had fired 28 workers over protests against its cloud services contract with the Israeli government.
The firings came after Google organizers held two 10-hour sit-ins at the company's offices in Sunnyvale, California and New York City, demanding the termination of Project Nimbus, a $1.2 billion contract under which Google and Amazon provide cloud infrastructure and data services for Israel—without any oversight regarding whether the Israel Defense Forces uses the services in its occupation of Palestinian territories and bombardment of Gaza.
Workers have denounced Project Nimbus since it was announced in 2021, but Israel's killing of at least 33,970 Palestinians in Gaza since October and its intentional starvation of civilians led employees to escalate their protests.
No Tech for Apartheid said in a statement that Google officials called the police to both offices to arrest nine protesters—dubbed the Nimbus Nine—on Tuesday morning, before utilizing "a dragnet of in-office surveillance" to fire nearly two dozen other employees on Wednesday.
"They punished all of the workers they could associate with this action in wholesale firings," said the coalition, which includes Jewish Voice for Peace and MPower Change, a Muslim-led anti-war group.
Google accused the workers of "bullying," "harassment," defacing property, and physically impeding other employees—allegations No Tech for Apartheid rejected as it noted organizers "have yet to hear from a single executive about" their concerns over Google's collaboration with Israel.
"This excuse to avoid confronting us and our concerns directly, and attempt to justify its illegal, retaliatory firings, is a lie," said the workers. "Even the workers who were participating in a peaceful sit-in and refusing to leave did not damage property or threaten other workers. Instead they received an overwhelmingly positive response and shows of support."
The organizers staged the sit-ins on the heels of reporting in Time magazine about new negotiations between Google and the Israeli government regarding further potential tech contracts.
Kate J. Sim, a child safety policy adviser at Google who said she was among those fired this week, said the terminations show "how terrified [executives] are of worker power."
Google employees have a history of harnessing worker power to change policies at the company. In 2018, Google terminated a deal with the U.S. Defense Department to develop drone and artificial intelligence (AI) technology through a contract called Project Maven. The decision followed the resignations of several employees and the condemnation of thousands of workers.
Calling Google CEO Sundar Pichai and Google Cloud CEO Thomas Kurian "genocide profiteers," No Tech for Apartheid said Wednesday that they will not stop demonstrating against Project Nimbus until they get a similar result.
"The truth is clear: Google is terrified of us," said the group. "They are terrified of workers coming together and calling for accountability and transparency from our bosses... The corporation is trying to downplay and discredit our power.
"These mass, illegal firings will not stop us," No Tech for Apartheid added. "On the contrary, they only serve as further fuel for the growth of this movement. Make no mistake, we will continue organizing until the company drops Project Nimbus and stops powering this genocide."
Keep ReadingShow Less
Most Popular