Economic issues have their relev-ance also during the silly season, even if presented in a different manner. These are some points to ponder upon.
Steady as she goes
The Government has published the Pre-Budget document, a practice started when Lawrence Gonzi was prime minister and minister of finance between 2004 and 2008. The reactions were generally positive. Some praised it as the document had a clear focus. Others liked it because it reflected the good work done by the previous government. There were those who said that it aimed for specific and measurable targets, which everyone could understand.
However, the issue is not the Pre-Budget document. The key priority is the performance of our economy. We have enjoyed a number of years of low unemployment and have so far emerged unscathed from the economic and financial turbulence of the last 60 months. That is much better than what countries like Ireland and Cyprus have had and are still going through. The expression ‘steady as she goes’ needs to be objective for our economy.
Weather and sport
England has had a good summer. The skies were clear and the sun shone for many days and it has been very warm, with some parts of the country having a heat wave. This came after the coldest spring the English have had for years. On top of it, an Englishman won Wimbledon and the cricket team retained the Ashes. Moreover, an Englishman won the Tour de France. What does this have to do with the economy?
On the face of it, not much. But business confidence has grown in a remarkable way, house prices are rising faster than inflation and the economy is showing signs that growth is on the way.
Economic issues have their relevance also during the silly season, even if presented in a different manner
If one tries to rationalise all this, one does not manage to create a correlation between the weather, sporting success and the economy. On the other hand, we should not forget that economics has to do with human behaviour as much as it has to do with numbers. Human behaviour has as much to do with emotions as it has to do with rationality. Therefore, yes, there may be a connection between weather and sport on the one hand and the economy on the other.
Europe’s debt crisis
There is a debate somewhere in Europe as to whether the debt crisis is over. The immediate threat of banking and fiscal meltdown in countries like Italy and Spain has receded, and after one of the longest recessions on record – six successive quarters of economic contraction – there are even tentative signs of recovery. Although Greece has reported negative growth for the 20th consecutive quarter, the pace of economic slowdown seems to be easing. Mario Draghi, the Italian president of the European Central Bank, is credited with having calmed down the storm that seemed to be threatening the euro 12 months ago.
The bad news is that based on current performance, the eurozone’s ‘structural unemployment’ rate – that is, the unemployment that will not go away even after the economy returns to normal – is estimated at a staggering 10.1 per cent, up from 7.4 per cent before the crisis. So the economic recovery that many are predicting is likely to be a jobless recovery, unless governments pluck up the courage and implement the much-needed structural reforms – that will hurt a number of individual lobbies – but will benefit the economy as a whole. As the Italian saying goes, Tardare sì, scappare no (roughly translated into one can delay matters but not escape them).
Opting for an apprenticeship
An article in The Daily Telegraph claimed that after receiving their A-level resultsthis week, many students will choose an apprenticeship rather than a university place. Gone seem to be the days when a degree in politics, philosophy and economics at Oxford University was the most coveted prize students seemed to aspire for. Admittedly, in the UK, the majority of students who are successful in the A-levels will still go to university. On the other hand, it is very significant that the chief policy director of the Confederation of British Industry claimed universities need to note big employers are now competing directly with them for the brightest students.
I am not sure if all this jars in a Maltese environment, especially since we have invested heavily in vocational training and education over the years. However, employers (including the Public Service) certainly need to appreciate the fact that a university degree does not necessarily make someone more suitable for a job.