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6/03/2012
Stereotypes in Europe
ONCE in a while an opinion poll throws up an insight that is very revealing; yesterday it was the Pew Global survey of European countries.
Among the usual questions about attitudes to the euro and the European Union, people in eight nations (Britain, France, Germany, the Czech Republic, Greece, Italy, Poland and Spain) were asked which country in the European Union is the hardest-working. The Greeks nominated themselves. The other seven nations all chose Germany, as the table shows.
Yet Greek perception is not quite as misaligned with reality as it seems. Greece actually works the longest hours in Europe, as this graphic of OECD data shows. However, as any economist will tell you, working longer does not equate with higher productivity, and Greece's productivity is relatively low. Greece is viewed as having the second-highest level of corruption after Italy, though Greeks reckon their country is the most corrupt of all.
Adapted from The Economist
If you are interested in reading the poll, click on European Unity on the Rocks - Pew Research Center
Among the usual questions about attitudes to the euro and the European Union, people in eight nations (Britain, France, Germany, the Czech Republic, Greece, Italy, Poland and Spain) were asked which country in the European Union is the hardest-working. The Greeks nominated themselves. The other seven nations all chose Germany, as the table shows.
Yet Greek perception is not quite as misaligned with reality as it seems. Greece actually works the longest hours in Europe, as this graphic of OECD data shows. However, as any economist will tell you, working longer does not equate with higher productivity, and Greece's productivity is relatively low. Greece is viewed as having the second-highest level of corruption after Italy, though Greeks reckon their country is the most corrupt of all.
Adapted from The Economist
If you are interested in reading the poll, click on European Unity on the Rocks - Pew Research Center
Argentina's blue dollar
FROM this week, any Argentine wanting to take a foreign holiday must not only provide his tax identification-number but also tell the tax agency (known as AFIP) where, when and why he is going. Officials say this violation of privacy is needed to fight tax evasion and money laundering. In reality, the reason is that the government of Cristina Fernández de Kirchner is starting to run out of dollars. Since the inflation rate is already over 25%, the government is terrified of letting the peso depreciate. Instead, it is resorting to a siege economy.
Since last year, importers have faced curbs (on May 25th, the European Union filed a complaint at the World Trade Organisation against the import restrictions). But with capital flight continuing, the government has stepped up exchange controls. AFIP, headed by Ricardo Etchegaray, has not explained what criteria it uses in responding to requests for dollars. But the rationing is getting stricter.
The curbs have succeeded in cutting capital flight, from $8.4 billion in the third quarter of last year to just $1.6 billion in the first quarter of this year. The Central Bank’s reserves, which the president has dipped into for public spending, have stabilised, at $47 billion. But this has come at a price: the economy is decelerating fast. And the informal currency market is booming.
Calle Florida, a pedestrianised thoroughfare in the heart of Buenos Aires, is once again thronged with money-changers, as it was in the inflationary 1980s. They offer dollars at competitive rates, in some cases extracting them from their socks. Another loophole is used by companies: in a market known as blue-chip swaps, they buy dollar-denominated sovereign bonds in pesos, transferring them to the United States where they sell them for dollars. El blue—the latest in a long line of Argentine economic neologisms—reached 6.15 to the dollar in late May, up from 5.20 in March. The official exchange rate is 4.47.
The government has made half-hearted efforts to crack down on the black market. Officials have announced that they will prosecute people who buy dollars legally and then resell them for a quick 25-30% profit. Even so, economists reckon that anything from $10m to $40m a day changes hands under the table—as much as the average daily trading volume in Argentina’s stockmarket. Bad though it is for the economy, the two-tier exchange market is politically useful, as a means both of bullying opponents and permitting allies to reward themselves.
Only last October Ms Fernández easily won a second term with 54% of the vote. Since then, the deteriorating economy has cut 20 points from her approval rating. Her nationalisation of most of Repsol’s share of YPF, an oil company, in April, halted but did not reverse the decline. With growth running out, the risk for the president is that her popularity starts to move in inverse relation to the inflation rate.
Cash or Card or Mobile Money? (video)
You can also watch this video by clicking HERE or on the Play Button
And how about reading an article on Consumer banking?
One thing has remained constant for a century at least: the branch banking system.Now several changes are coming, driven by technology—the growth of internet usage on smartphones, the rise of “big data” computer processing and the increasing willingness of customers to do complicated things online. These developments will transform the way banks do business and organise themselves.
The revolution will be most visible on the high street. Branches will become less important and there will be far fewer of them. Those that remain will look quite different. Instead of walking into one to deposit checks or get statements, most people will do this from their mobile phones. Instead of opening wallets in shops and being confronted with a choice of whether to pay by cash or plastic card, they will wave a phone at the checkout. On it will be a virtual wallet provided by a firm such as Google, PayPal, Square or some company that hasn’t been thought of yet. If you have forgotten your phone you will type in your phone number and a secret code (or simply speak your name) and carry on shopping.
But this is not just a more convenient way of paying. It also promises to overturn your existing financial relationships. Instead of reaching for the first card that happens to be in your wallet to pay for a $2 cup of coffee (and risk being charged a $35 penalty by your bank for exceeding your overdraft limit), your phone will choose the best method of payment. Repayments will automatically be channelled to pay off the most expensive loans first. Penalty fees for inadvertent overdrafts will become things of the past.
These changes will give bank customers more clout, allowing people effortlessly to find the best deals, mainly at the expense of banks’ profits. Some of the biggest beneficiaries will be migrants, who have been failed by a banking system that charges them up to 20% of the sums they regularly send to support their families at home. People with bad credit scores will also surely no longer have to pay interest rates of 1,000% a year to payday lenders. But virtually all customers should gain.
This will undermine the old model of retail banking. Pricing will become more transparent. It will be harder to pretend that banking is free when in fact it relies on customers giving banks virtually interest-free loans in the form of deposits; harder to profit from the disorganisation of customers who slip into unauthorised overdrafts or roll over balances on high-interest credit cards while leaving cash in low-yielding savings accounts. Banks will probably have to accept lower margins on credit cards, personal loans and mortgages.
Yet there is a big opportunity for banks, too. They will cut costs by closing many of their branches. Banks will also tap into new sources of revenue by mining their enormous troves of customer data. A bank that knows what you have just bought or where you have booked a holiday will be able to offer real-time discounts on related products.
In terms of access, some worry that as banking moves further online, the old, the poor and the computer-illiterate will be excluded from the financial system. But the simple, low-cost mobile-banking systems that operate in countries such as Kenya, India or Brazil suggest otherwise.
edited from The Economist
6/01/2012
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