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  • Tuesday, September 23, 2014

    Why a European Unemployment Insurance would help to make European Monetary Union more sustainable

    Sebastian Dullien
    Since the onset of the euro-crisis, the old debate pertaining to the supra-national stabilisers in the euro-area has gained new relevance. While economic textbooks have long stipulated that countries forming a monetary union need an alternative mechanism for dealing with asymmetric shocks and even the early feasibility studies on Economic and Monetary Union EMU had demanded a supranational transfer scheme (MacDougall 1977), EMU came into existence in the late 1990s without such a scheme.

    By now, most observers agree that the euro-crisis was (with the exception of Greece) is not the result of irresponsible fiscal policies, but the consequence of problems in the banking systems which resulted partly from national boom-and-bust-cycles. Hence, for a more sustainable and better-functioning monetary union, a growing body of literature now asks for mechanisms to dampen booms and bolster recessions.

    The new debate can best be observed in a number of European Union documents, such as the European Commission’s roadmap detailing propositions for a more complete monetary union; as well as that dubbed the “four presidents‘ report” prepared by the president of the European Council, in conjunction with presidents of the European Commission, the European Central Bank and the Eurogroup. The European Commission’s concept for “Social Dimension of EMU” is also an example of such documents, all of which call for a “fiscal capacity” for the eurozone.

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    Monday, September 8, 2014

    Trade Unions in Transition: Changing Industrial Relations in Vietnam

    Erwin Schweisshelm
    Introduction
    Trade unions in Vietnam are closely tied to the Communist Party of Vietnam (CPV) and have yet to find their role as autonomous representatives of the interests of workers. However, the ever growing influence of foreign investors and the increase in wild cat strikes put pressure on the Vietnam General Confederation of Labour (VGCL), the only legally registered trade union in Vietnam. This pressure has an impact on both the ideological self-perception of the VGCL, as well as its organisational behaviour. It then faces a difficult political dilemma: if the situation remains unchanged and the VGCL does not deal with the challenges of changing labour relations, workers will nevertheless fight for better working conditions and render the official trade unions obsolete. Should the VGCL start to perform its role of a genuine representative of the interests of workers in Vietnam, it must do so independently of the party and state in Vietnam.

    Trade Unions in Transition – from harmony to conflict
    Under the political conditions of a Leninist one-party state, the trade unions are a “mass organisation” under the leadership of the CPV. According to Article 10 of the Constitution of Vietnam, the VGCL is the only trade union organisation in Vietnam and represents the whole working class in Vietnam, not limited to its members.

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    Monday, September 1, 2014

    Selling Free Trade with Pseudo-Exact Science: The ifo-Studies

    Stefan Beck
    Christoph Scherrer
    The US government and the European Commission are negotiating a Transatlantic Trade and Investment Partnership (TTIP). The trading partners push for the elimination of the tariffs, less regulation, and more rights for investors. The governments try to justify the TTIP by pointing to significant welfare gains from additional exports, higher growth, and increases in efficiency, income and employment. They draw on various economic studies which, are based on complex modelling; concluding that a TTIP would increase prosperity in both the US and the European Union.

    Trade impact studies usually make use of Computable General Equilibrium models. These models have been criticised in recent years. Among the critics is a team from the Munich ifo Institute which produced two impact studies in 2013, one for the German Federal Ministry of Economics (ifo-BMWi) and the other for the Bertelsmann Foundation (ifo-Bertelsmann). We concentrate our assessment on the impact studies drawing from the ifo studies.

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