The Economic Realms: Osborne

Showing posts with label Osborne. Show all posts

Thursday, 5 February 2015

Adam Smith Institute calls on Osborne to back Varoufakis's Greek debt-swap plan

Yanis Varoufakis fights for new debt-swap plan (Source: Getty)

Greece's finance minister Yanis Varoufakis has found an enthusiastic backer for his debt restructuring plans in one of Britain's premier free-market think-tanks.
Greece has abandoned demands for a write-off of foreign debt and has instead proposed swapping the outstanding debt for growth-linked bonds accompanied by a crackdown on tax evasion and budget surpluses.
Varoufakis described the new options as a "menu of debt swaps", according to the Financial Times. The first of these options would be new bonds indexed to nominal economic growth, which would replace European rescue bonds.
Update: Varoufakis expresses surprise at free market think-tank endorsement. But here's why they agree
Lars Christensen, a fellow at the Adam Smith Institute (ASI), said today:

The European Central Bank's job is to ensure nominal stability in the Eurozone economy. The ECB should not bail out governments and banks.
Unfortunately again and again over the past six years the ECB has been forced to bailout Eurozone states. Hence, the ECB has repeatedly conducted credit policy (rather than monetary policy) to avoid Eurozone countries defaulting.

Christensen argued the ECB was the principal culprit for the situation through excessively tight monetary policy. He praised the new plan advocated by Varoufakis on Monday:

By linking Greece's EU and ECB debts to Greek nominal GDP, as Varoufakis has suggested, Greece's public finances would be less vulnerable to monetary policy failure in the Eurozone.
The Chancellor George Osborne should be an enthusiastic supporter of Varoufakis’s debt plan as it would cut the cost of the ECB's tight money policies and reduce the danger of another major Eurozone crisis

Varoufakis visited London yesterday for discussions with George Osborne and private investors to reassure them Greece wasn't looking for an all-out fight with Brussels. Osborne labelled Greece's debt crisis the "greatest risk to the global economy".
Opinion: Can game theory save the Greeks from euro oblivion?
It remains to be seen whether Germany will move towards Greece's new position, which excludes terms such "write-off" and "haircut" that would anger the German electorate.
As part of his tour of European capitals, Varoufakis told the FT:

I’ll say, 'Help us to reform our country and give us some fiscal space to do this, otherwise we shall continue to suffocate and become a deformed rather than a reformed Greece'.



Monday, 24 March 2014

Exclusive: Renewable energy from rivers and lakes could replace gas in homes

Millions of homes across the UK could be heated using a carbon-free technology that draws energy from rivers and lakes in a revolutionary system that could reduce household bills by 20 per cent.

The Energy Secretary, Ed Davey, has described the development as "game changing" in relation to Britain's need for renewable energy against the backdrop of insecurity in Russia, which supplies much of Europe's gas, and the political row at home over soaring fuel bills.
In the first system of its kind in the UK, a heat pump in the Thames will provide hot water for radiators, showers and taps in nearly 150 homes and a 140-room hotel and conference centre in south London, saving 500 tons of carbon emissions from being released every year into the atmosphere.
Mr Davey has asked officials at the Department of Energy and Climate Change (Decc) to draw up a nationwide map showing where renewable heat can be drawn from water to explore the potential of heat pumps. In theory, any body of water, including tidal rivers as well as standing water such as reservoirs and lakes, can be used as long as they are in the open and heated by the Sun. The Government has a target of 4.5 million heat pumps across Britain, although some will be using heat from air as well as water. David MacKay, the chief scientific adviser to Decc and professor of engineering at Cambridge University, has described a combination of heat pumps and low carbon electricity as the future of building heating.
Water-source heat pumps have been used on an individual domestic level and are popular in Japan and Scandinavia, but have not been developed on a larger scale and have not generated sufficiently hot water for everyday use. For the first time, scientists at Mitsubishi and Mike Spenser-Morris, a local developer and director of the Zero Carbon Partnership, have created a system that can generate 45C heat and can be used on a wider scale for mass housing developments.
The development is at Kingston Heights in Richmond Park in south London – a neighbouring constituency to Mr Davey's own – where Tory MP Zac Goldsmith has campaigned for greater use of environmentally friendly energy. The first residents will move in at the end of this month and benefit from the zero-carbon technology, with savings on their heating bills of up to 20 per cent.
The Mitsubishi "Ecodan" pump used at Kingston won the award for best new product or technology at the Climate Week Awards earlier this month and is seen as revolutionising the renewables industry. While the system is thought to have cost about £2.5m, the Government is set to unveil subsidies for domestic renewable heat production, known as "renewable heat incentives"; so in future the price tag could be much lower.
Water is drawn from two metres below the surface of the Thames, where latent heat from the sun is sustained at around 8C to 10C all year round. The water is filtered twice and fed through a pump, where the low-grade heat is harvested by heat exchangers, while the cooler water is pumped back into the river. The heat exchangers transfer the heat to a series of condensers, which boost the 8C to 10C heat to 45C hot water using a process of reverse refrigeration. This is used to heat domestic water piped into nearby homes. A small amount of electricity is used to power the system, but this is supplied by Ecotricity, which makes it technically zero carbon.
Speaking to The Independent on Sunday, Mr Davey said: "This is at a really early stage, but it is showing what is possible. You never have to buy any gas – there are upfront costs but relatively low running costs.
"I think this exemplifies that there are technological answers which will mean our reliance on gas in future decades can be reduced. Here you have over 100 homes, you have a hotel with nearly 200 bedrooms and a conference centre that won't be using gas. It will be using renewable heat from the nearby River Thames. This is a fantastic development. My department is exploring the potential for this sort of water-source heat pump across the UK, so we're going to map the whole of the UK for the potential.
"Obviously, the real concern is getting secure energy. We've seen the crisis in the Ukraine develop, and the dependency in the EU on imported gas is quite significant. There is a real strategic challenge for the UK and the EU about protecting our sources of energy and making our energy sources more secure. This is where energy security and action on climate change come together.
If you've got home-grown energy, then that is really secure. This is the long-term future, about how we reduce our carbon emissions and our dependency on imported fossil fuels."
Mr Davey said he supported George Osborne's decision to freeze the carbon tax on energy-intensive industries. But in a swipe at Tory Eurosceptics, the Energy Secretary said: "If you get engaged, if you work with European colleagues, you can get the British agenda on climate change. People who say we should be out of Europe are treacherous to Britain's future

Tuesday, 11 June 2013

QE for Jobs

Home » Blog » 2013 » June » 03 » QE for jobs

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Written by Positive Money on . Posted in Bank of England & QE, Campaigns, Updates

Could you create jobs with £375 billion to spend?

Since the crisis the Bank of England has created £375 billion of new money in an attempt to get the economy going again. But instead of putting it into the real economy, where it could support businesses, shops and real jobs, they’ve just pumped it into the financial markets.
That’s why the stock market is near its highest ever level, even though there are around 2.5 million people who can’t find jobs at all, and a further 3 million people who can’t get enough hours of employment. [1] Meanwhile over 500,000 people have become dependent on food banks to live. [2]
This is crazy…
This is a crazy approach to fixing a broken economy. If just a fraction of that £375 billion had been spent into the real economy by the government, as new debt-free money, it would have created jobs, allowed us to reduce our debts, and get the economy going again. We have tried to explain this to the government [3], and even the former chairman of the Financial Services Authority, Lord Adair Turner has said that “If [President] Herbert Hoover had known in 1931 that [the policy of creating money and spending it into the economy through government budgets] was possible, the US Great Depression would have been less severe.” [4]

We want to campaign for a better approach

Instead of seeing more money flooding the financial markets, we want to see the power to create money be used for something useful. There’s so much that needs to be done, including:

Rebuilding the hundreds of school buildings that are not fit for purpose (the government has just borrowed £700million from private banks – who will create the money used to pay for the rebuilding – instead of using their own power to create money).
Switching the country over to clean and renewable energy so that we don’t become dependent on countries like Qatar for energy imports in the future
Getting money directly to ordinary people by creating jobs so that they can start to pay down some of their debts

It’s an idea that’s already been mentioned by leading economic commentators in all the mainstream papers. And now even the Treasury is interested – in their latest review of monetary policy [5], they included a section on Adair Turner’s suggestions. So now is the best time for this campaign.
Our campaign (codename “QE for jobs”) would ask for £50 billion to be created by the Bank of England and spent by government with the aim of increasing employment and doing some of the long-term things that are essential for this country.

Here’s the plan:

Over the next 2 years we’re aiming to:
·         get the idea of ‘QE for jobs’ into the mainstream public debate
·         get the main political parties to adopt it into their 2015 manifesto
·         build a large movement of individuals and groups in support of the campaign
·         get business leaders to write an open letter to George Osborne asking him to carry it out
This doesn’t mean we are changing direction. Our main objective will always be to fully change the way that money is created so that banks can no longer create money and cause the kind of crisis that we’re facing today.[6]
This is a campaign that we think will lead the way to getting the money creation more mainstream. It is a step in the right direction and would mean our reforms are more likely to be implemented. It could also raise our profile and broaden our network along the way.

Can you help us kickstart the campaign?

We’ve speaking to potential partners and there’s a lot of interest in this idea, but we need to have the funds to get the ball rolling.
Currently we have 378 people who donate every month, and this keeps the campaign going. If we can increase that to 430, we’ll be able to focus on this huge opportunity to get a change in the monetary system and have money created in the public interest for the first time in decades.
If you can, please help by donating monthly, either by direct debit or paypal:
Donate now
Why donate to Positive Money?
Compared to most not-for-profits and charities, we’re tiny and don’t have any huge funders to support our work. However, we are tackling one of the root causes of many problems. We depend on the monthly donations of around 350 of the 11,500 people receiving this email, to provide half of all our funding, plus a number of grants from smaller charitable trusts.
Any donations made in June will be DOUBLED…
The James Gibb Stuart Trust, who helped Positive Money to get off the ground, are currently matching any donations set up this month, for the next 12 months. That means if you start donating £10 a month, it’ll be matched with an additional £120 over the next year.
Plus if you donate £10 or more per month – we will send you a free copy of the book Modernising Money.  If we can raise an extra £1200 a month in donations, this will be doubled by the James Gibb Stuart Trust and we’ll be able to cover a significant amount of our costs for a QE campaign and at least keep Positive Money going until the 2015 election.
Donate now
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[1] http://www.bbc.co.uk/news/business-20509189
[2] http://www.church-poverty.org.uk/foodfuelfinance/walkingthebreadline/report
[3] http://www.publications.parliament.uk/pa/cm201213/cmselect/cmtreasy/writev/qe/m08.htm
[4] http://www.fsa.gov.uk/static/pubs/speeches/0206-at.pdf - p34.
[5] http://cdn.hm-treasury.gov.uk/ukecon_mon_policy_framework.pdf
[6] http://www.positivemoney.org/about/statement-of-purpose/

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