April 15, 2021

The Saturday Profile: Olli Rehn Tries to Shed ‘Austerity’ Label

OLLI REHN, the European Union’s top economic policy maker and scourge of debt-fueled budget deficits, is fed up with austerity. Or at least with being tarred by a term that “is clearly used to label somebody as an unworthy person who is almost eating children.”

With more than 26 million Europeans out of work and the economies of the 27-nation bloc shrinking over all for six quarters in a row, Mr. Rehn, the commissioner for economic and monetary affairs, has become a lightning rod in recent months for swelling anger across Europe against the harsh belt-tightening policies generally known as austerity.

But in an interview, Mr. Rehn, 51, described himself as a “doctrinaire agnostic in terms of economic policy” who has read and found much of value in the writings of the British economist John Maynard Keynes, whose name is synonymous with the idea of economic stimulus in times of crisis.

A onetime semiprofessional soccer player in Finland, Mr. Rehn (pronounced ren) said the depth of Europe’s economic gloom — which has led to widespread public disillusionment with the European Union, even in richer countries — had shown that no single prescription had all the answers.

“If there were a silver bullet, we would have used it already,” he said. “There is no single silver bullet.” He indicated that policies long criticized as too focused on budget cuts were being relaxed now that the financial markets had calmed down after panic swept them at the onset of Europe’s debt crisis four years ago.

On Wednesday, he met for lunch in Brussels with the French president, François Hollande, a frequent critic of austerity, and agreed to give Paris two extra years to reach a budget deficit target of 3 percent of gross domestic product, a goal it was supposed to reach this year.

France’s more pressing problem is its flagging ability to compete, Mr. Rehn said. France enacted legislation this week to slightly loosen notoriously rigid employment rules, and Mr. Rehn said he was “looking forward to the reforms that they will continue to work on,” particularly to the country’s labor market and pension system.

Spain and the Netherlands, he added, will probably be given extensions, too, when the European Commission, the union’s Brussels-based executive arm, makes proposals at the end of the month for how each country should proceed.

Asked whether policy had changed, Mr. Rehn, paraphrasing President John Quincy Adams, said, “I see no change in policy, only a change in circumstances.” This, he said, contained “more than half the truth” to explain the European Union’s evolving economic policy.

In the early period of Europe’s current crisis, Mr. Rehn said, Greece, Portugal and other countries burdened with heavy debts lost access to financial markets and simply could not cover their expenses, leaving policy makers no choice but to push for swift budget cuts and tax increases.

“We now have more room for maneuver,” he said, explaining that cutting deficits is no longer such an urgent priority and can be pursued at a “slower pace” as long as countries recognize “that we cannot solve this crisis by building up new debt.”

The progress that Latvia, Estonia and Lithuania have made in repairing their economies through tough austerity programs shows that “fiscal consolidation” can work, he said, but does not offer a template for others. “You can never apply the experiences of one country to another,” he said.

A cerebral soccer enthusiast with degrees from Macalester College in Minnesota and the University of Helsinki and a doctorate from Oxford, where he focused on industrial competitiveness, Mr. Rehn started out as a striker with Mikkelin Palloilijat, a soccer club in his hometown, Mikkeli, in southern Finland, but decided against making a career in sports.

“I learned the limits of my talent, fortunately early enough. But I’ve enjoyed a great deal of the game for the past 45 years,” he said, speaking in his Brussels office, decorated with soccer memorabilia, a large map of Europe, a small tree and a soft toy of a grimacing bird from the wildly popular game Angry Birds, created by a Finnish game developer. He said he planned to give the bird to his 15-year-old daughter.

Article source: http://www.nytimes.com/2013/05/18/world/europe/europe-economist-rehn-rejects-austerity-label.html?partner=rss&emc=rss

U.S. Vehicle Sales Soared Nearly 10% in September, Despite Economic Gloom

All three of the Detroit automakers reported gains, led by a 27.2 percent year-over-year increase for Chrysler, which outsold Toyota for the fourth time this year.

Toyota and Honda again trailed the rest of the industry, even though September was the first month since the March earthquake and tsunami in Japan that all of their plants were running at full capacity. Toyota’s sales dropped 17.5 percent, and Honda’s were down 8 percent. In contrast, Nissan sales increased 25.3 percent.

The industry’s seasonally adjusted, annualized selling rate rose to 13.1 million, the first time since April that they had exceeded 13 million. General Motors and Ford Motor each said they still expected total sales for 2011 to top 13 million, which would require demand to jump further in the fourth quarter.

Auto executives and analysts said shoppers had not been dissuaded by a declining stock market, bleak consumer confidence surveys, a sluggish housing market or high unemployment. Bigger discounts offered by some brands have helped, as have new offerings like the Chevrolet Sonic, a subcompact car, and a bevy of redesigned models from Chrysler.

“I don’t know of any other month where we had positive gains in auto sales with all of those negative factors,” Jesse Toprak, vice president for industry trends and insight at TrueCar.com, which tracks sales and pricing. “The automakers might be convincing some consumers who may not be so eager to spend their money to buy a car because the product is so compelling.”

Mr. Toprak said more consumers also were showing up at dealerships because their current vehicle had outlived its useful life and they had no choice but to buy a replacement. High used-car prices are prompting some in that situation to buy a new one instead.

“As long as things remain relatively stable, even in the face of persistently high unemployment, we’re going to consistently see slow growth,” Don Johnson, G.M.’s vice president for United States sales operations, said in a conference call. “Right now, the pent-up demand due to age of vehicles is what’s keeping this nice, steady, slow growth going.” G.M. sales increased 19.7 percent in September over a year ago.

Falling gas prices helped persuade more shoppers to buy pickup trucks and other larger vehicles. Sales of light trucks, including sport utility vehicles and minivans, rose 16.1 percent, while passenger cars were up 3.4 percent.

Sales of full-size pickups, which typically fare best when the construction industry prospers, surged 46 percent at Chrysler and 33 percent at G.M. Ford, whose sales were up 9 percent over all, sold 18 percent more light trucks but 8.7 percent fewer cars.

At Chrysler, September was the 18th consecutive month of year-over-year sales growth. It reported a 24.3 percent gain for its Jeep brand of S.U.V.’s.

“Irrespective of the economy, strong products equal strong sales,” Reid Bigland, Chrysler’s head of United States sales, said in a statement. “There is no double-dip downturn going on around here.”

Another carmaker with considerable momentum is Nissan, which experienced relatively minor disruptions from the Japan disaster. Nissan sold 68 percent more of its subcompact car, the Versa, and its midsize sedan, the Altima, has outsold the Honda Accord so far this year.

In addition, the Nissan Leaf, an electric car, added to its sales lead over the Chevrolet Volt, G.M.’s plug-in hybrid. Nissan sold 1,031 Leafs to G.M.’s 723 Volts, but G.M. officials said they were still ramping up production while expanding sales to dealers nationwide.

For Toyota and Honda, even though plants are running at full speed, inventories are expected to remain below prequake levels until early next year. But dealerships said they were finally able to meet most shoppers’ needs again, rather than just taking an order or hoping the customer came back later.

“It’s beginning to feel like normal, almost,” said Adam Skolnick, the general manager at Toyota of Watertown, near Boston. “We have plenty of cars on the lot, and I’m anticipating many, many more coming in the next 45 days or so.”

Mr. Skolnick said the arrival of the redesigned Toyota Camry  sedan a week ago was helping the dealership make a quick recovery. For September, Camry sales fell 19.2 percent, but it was the industry’s top-selling car.

“It’s been like a bakery here, with people taking numbers to see the car,” Mr. Skolnick said. “It makes it feel fun again.”

Article source: http://feeds.nytimes.com/click.phdo?i=10befbb2024a2fbda62ac1c59c6cd8e6