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Saturday, December 1

1st Dec - Weekender: The World


Latest articles on Europe, US and Asia, + some longer background reading I've come across during the ending week.

Previously on MoreLiver’s:

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EUROPE
Brussels blog round up for 24 – 30 November: A bailout in everything but name for Greece, Europe splits on Palestine and no EU job for Tony Blaireuropp / LSE

Private Wealth and European SolidarityProject Syndicate
A little-discussed but crucial factor in the debate over wealth transfers from Europe’s more economically sound north to its troubled south is the relationship between public debt, GDP, and private wealth (households’ financial and non-financial assets, minus their financial liabilities) – in particular, the ratio of private wealth to GDP in the eurozone countries.

The most important numberFree exchange / The Economist
All it takes is one government to decide that it has had enough. The more places that have chronically underemployed workers as a large plurality of the adult workforce, the more likely such decisions become. If that were to occur, all the hard work European leaders have gone to to save the single currency would probably be for nought.



The Relentless Eurocratic Power GrabTestosterone Pit 
 
(audio) The Eurozone's Design Failures: can they be corrected?LSE
Professor Paul De Grauwe: The eurozone experiences an existential crisis. What can we do about it?  (direct mp3)

Citigroup sentences to Europe to faster economic deathThe Telegraph
The closer you read Willem Buiter's imperial uber-blick of the world economy, the more astonishing it becomes. Citigroup's end of year forecast – Prospects for Economies and Financial Markets in 2013 and Beyond – is in essence a celebration of American revival and ascendancy. It sentences Europe to slow economic death.

Angela Merkel's politics of priority: Personal vs PeopleSaxo
Angela Merkel has done a fine job of balancing the needs of greater Europe versus the priorities of Germany. Some observers think she has taken too hard a stance with the Southern European layabouts, but I say “baby you aint seen nothin’ yet!”


Banking reform: Do we know what has to be done?voxeu.org
The crisis has revealed the vulnerabilities of the Eurozone financial sector and the critical role the sector plays in the real economy. It also made it clear that the Eurozone banking system needs fixing. But what reforms should we implement? It is critical that much better legislation be both discussed and implemented if we wish to properly regulate the financial sector. T

Italy’s political system is on the brink of dramatic pulverizationeuropp / LSE
 

EFSF Conveniently DowngradedDealbreaker
Eurozone bailout funds downgraded over Franceeuobserver
EFSF, European Stability Mechanism Ratings Cut by Moody’sBB

  EU BUDGET
Europe’s Dysfunctional Growth Compactbruegel
Member states have refused the European Commission’s request for extra contributions to cover the shortfall, causing talks over next year’s budget to collapse.

The European Union budget: Too timid by halfThe Economist
These changes would cut EU spending by more than a quarter, make its distribution fairer and do a lot more than the current budget to promote growth. If Europe’s crisis-weary leaders want to show the world that they are serious about reform, what better place to start?

  ECB
Leave "fairy world" behind, Draghi tells euro zoneReuters
The euro zone's crisis is far from over and its members must tighten budgets and forge a banking union to leave behind the "fairy world" that allowed problems to grow, European Central Bank President Mario Draghi said on Friday.


Restoring trust in Economic and Monetary UnionECB
Benoît Cœuré, 1-Dec 2012


Pulling the OMT TriggerProject Syndicate
The ECB’s decision in September to proceed with its “outright monetary transactions” program to purchase distressed eurozone members’ government bonds has restored financial calm to Europe. But vulnerable countries like Italy and Spain would be well advised to request OMT intervention before it is desperately needed.

  SPAIN
Spanish banks: Bail-out tapasThe Economist
The IMF reckons that house prices, which have slumped 30% from their peak, may fall further given the stock of unsold homes and weak growth in household incomes. Unemployment, already at about 25%, may rise to almost 27%, the OECD warned in a separate report this week. The main course of bank restructuring may have been served, but a sour postre (dessert) may still be on the menu.

The Financial Squeeze in Spain to IntensifyMarc to Market
The Greek bond buy back is the main talking point in Europe and upon it rest the hard won agreement to fund Greece so it can keep its creditor whole. Spanish banks may quickly take the spotlight… The restructuring plans are more severe than many market observers seem to appreciate.  It is difficult to see how it won't serve to be another headwind for the Spanish economy. 

Goldman: No recovery for Spain until 2015Sober Look

How Spain ended up with 25% unemployment rateSober Look

  GREECE
What the Greece Deal Means for German FinancesSpiegel
Finance Minister Wolfgang Schäuble insisted on Tuesday that the new deal aimed at slashing Greece's debt load won't cost German taxpayers. It will, however, deny Germany billions in expected revenues. And the feared debt cut may be just around a not-too-distant corner.

More Greek myths: The need to speak truth to weaknessThe Economist
The IMF’s toughest struggle has been to convince Germany and others that Greece cannot repay the money it owes. Reckoning debt sustainability is an inexact science…Ms Lagarde made plain that, unless Greece’s debt was cut back, the IMF would lend no more money. Germany retorted that any haircut would be illegal.

The World from Berlin: 'Europe Hasn't Learned Lessons from Greece Crisis'Spiegel
For the third time, European finance ministers this week have put together a package of aid measures for Greece and assured Europeans that the country is now back on track to financial health. But is it really? German commentators certainly don't think so.

Great Graphic: Trajectory of Greek DebtMarc to Market

UNITED STATES
The Stiffs and the PlayersKrugman / NYT

QE through the looking glassFree exchange / The Economist

Bernanke’s structuralist concessionMacroScope / Reuters
Fed chief quietly downgrades U.S. economic potential

Revenge of the Reality-Based CommunityThe American Conservative
My life on the Republican right—and how I saw it all go wrong.

ASIA
The World According to XiProject Syndicate
With the notable exceptions of Mao Zedong and Deng Xiaoping, China’s leaders have seldom imposed their own personalities upon Chinese diplomacy. And yet, while Xi’s leadership style will most likely continue in the tradition of his predecessors, his outlook and worldview with surely be different.

China’s Nuclear Energy PlayThe Diplomat
China will significantly increase the amount of energy it generates from nuclear sources over the next few years

No VPN? No Problem. A New Way Around China’s Great FirewallWSJ
http://blogs.wsj.com/chinarealtime/2012/11/29/no-vpn-no-problem-a-new-way-around-chinas-great-firewall/?mod=WSJBlog

China PMI Rises But Misses Expectations For Fifth Month In A RowZH

China’s Oil Quest Comes to IraqThe Diplomat
While China's oil dealings with countries like Iran and Sudan receive global attention, its budding relationship with Iraq may turn out to be the most important.

China’s Coming Growth TestsProject Syndicate
While no one should be surprised by the recent recovery in China's economic growth, the true challenges lie in the medium and long term. Indeed, the current economic rebound is not an achievement worthy of celebration if it comes at the expense of further reform and structural adjustment.