Revista de Economie Mondiala/ Journal of Global Economics

17-32

Authors: Rodica Velciu

At the beginning of the second decade of the 21st century, the sovereign debts of one of the largest economies of the world were “blown up” because of the ageing population and the costs determined by the financial crisis. According to an analysis by Standard & Poor’s rating agency, if governments maintain current fiscal policies, for 49 states representing 2/3 of the world population, the average debt as percentage of GDP will reach 245% by 2050. "The pressure of increasing expenses will determine profound changes in the economical perspectives of these countries. The erosion will start in 2015, when the quota of many states with high rating will start being under pressure", declare the Agency’s analysis. In mid April 2011, Barack Obama announced the elaboration of an ambitious plan for the reduction of the federal budget deficit, in total amount of USD 4,000 billion, over a period of 12 years. Democrat and Republican leaders of the Congress reached an agreement in respect to the raise of the debt limits, after months of intense closed-doors negotiations and only two days before the due date set by the Ministry of Finance. In order to avoid payment default, democrats and republicans reached an agreement to increase the leveraging to USD 14,300 billion, by USD 2,100 billion. Moreover, this agreement establishes a reduction of governmental expenses for the next 10 years with up to USD 3,000 billion and enough loans in order to avoid another increase in the leveraging limits in 2013. In turn, FED announced they will maintain stimulating policies for another two years, although in June the economic stimulation program should have ended. The monetary policy interest rate is at the lowest level in the history of the Central Bank, between 0% and 0.25% since 2008. At the beginning of September, President Barack Obama presented a new plan of economic revival and labor market support for a period of six years, rounded at USD 447 billion, in the attempt to avoid a new recession and in order to rebut a layoff that tends to stay at over 9%. Republicans fought some of the actions of the new plan, and also the solution of its financing, ensured 50% by increasing contributions for the rich contributors and eliminating fiscal facilities for the big corporations.

10-29

Authors: Agnes Ghibuțiu

Since the mid-2000s food prices have been on an upward trend. In the first months of 2011, agricultural commodity prices reached an all-time high, fuelling fears about the imminent outbreak of a new food crisis, similar to the 1973/74 and 2006/08 ones. Behind concerns about increased price levels and volatility in international agricultural commodity markets lie concerns about food security. Hence, the international community is now under pressure to urgently find solutions for tempering strong upward fluctuations in prices for many major food commodities. Trade policy changes are increasingly discussed as a major contributing factor to food price surges. This paper addresses some issues related to the recurrent global food crises from the perspective of trade policy, specifically export restrictions. After a brief review of the fundamental drivers of the upward trend in real food prices (rising global population and income, climate change, high oil prices, increasing cereal use for biofuel production, and financial speculation), it examines the upsurge in agricultural export restrictions over the recent years. Relying on WTO's trade policy monitoring exercise, it highlights typology, motivations and effects of the newly introduced export restrictions, and finds that a major factor behind their recent proliferation is the lack of effective and binding multilateral rules concerning these trade policy instruments. The paper argues that strenghtening and improving WTO's rules and disciplines is essential for mitigating increased price pressure and volatility as well as the associated food security risks. While the issue of export restrictions is currently the topic of discussions under the Doha Round, trade negotiations are in impasse since 2008. Hence, urgent and successful conclusion of the round would be an essential step. In the meanwhile, a closer regular monitoring of all forms of export restrictions would help to provide at least more transparency in this area. A collective agreement to limit the extent of restrictive trade measure would be also useful. Finally, a more systematic and internationally coordinated approach would be needed to improve commodity governance and contend with spiralling food prices and volatility.

9-27

Authors: Cristina Bumbac

Basic ferro-alloys are some of the most important ingredients for producing carbon and special steel (using ferrochrome). The market of basic ferro-alloys is somehow independent of other raw materials markets, depending mostly of steel. There are sometimes speculative operations, but they do not have a significant impact on prices. On the one side, producers are concentrated mostly in countries where metals (manganese, silicium, chromium) deposits can be found: mostly Africa, China and Latin America. On the other side, consumption is concentrated in Europe and U.S.A. (recenly also within BRIC countries). This situation generates tensions, especially about prices and long term contracts. The spot market is quite volatile and dominated by traders. The atipical crisis which began at the end of 2007 had not a significant impact on basic ferro-alloys prices, at least not untill 2012.

11-26

Authors: Alina Ligia Dumitrescu

The article analyzes the EU’s plan for economic recovery and creation of new jobs, which seeks to coordinate the efforts of Member States for contracting the crisis effects. The anti-crisis programs adopted in some EU Member States and other developed countries as USA and Japan are analyzed, also. There are examined the impact of employment policies on economic growth and the measures of fiscal consolidation. The conclusion is that investment in human capital and modernizing labor markets will have a positive impact on economic recovery. Never the less, the contemporary economic theory and the reality show that successful anti-crisis programs rely on a responsible state for the welfare of its citizens, with effective institutions and growth strategies, that promote employment and create the new jobs.