Social protection: France’s champion of Europe

France spends a third of its GDP on social protection or 34.1%. Health and old age account for 80% of the benefits paid, 91% paid by public authorities and 9% by the private sector. DREES takes stock of it and compares it to that of our European neighbors.

The Directorate for Research, Studies, Evaluation and Statistics (DREES) has just scrutinized the social protection accounts, which have given rise to an interesting international comparison, putting it back in its European context (1). At the same time, on the eve of the French Mutuality Congress in Montpellier, this report led to a comment by the President of the Republic on this “crazy cash” that the Hexagon is devoting to its social aid. Beyond any partisan spirit on the subject, the panorama presented by the DREES makes it possible to return to some figures that are important.

One-third of the national wealth

In 2016, the last year selected for the analysis, our country spent 759.1 billion euros on social spending, a third of our national wealth. Of this amount, 714.5 billion gave rise to benefits, the rest being composed of management fees, financial expenses and capital account uses. In the same year, social protection receipts amounted to 758.7 billion euros or 34% of GDP. On this set of expenditure, the two main risks, old-age survival (325.3 billion euros) and health (249.9 billion euros in 2016), represent respectively 46% and 35% of the total of this expenditure, ie 26% of GDP. 648.8 billion euros, ie 91% of the benefits are paid by the general government (including 515.9 billion by the Secu), the private sector providing 9% of its services, or 41.5 billion euros financial and non-financial corporations (of which $ 28.2 billion by mutual and provident societies) and $ 24.2 billion through non-profit institutions serving households (persons with disabilities, social assistance childhood, people experiencing exclusion). Of the resources of this social protection (758.7 billion), the main part comes from contributions (461.3 billion), to which are added the taxes and duties affected (184 billion), the public contributions (93.7 billion ) and various resources ($ 19.6 billion). Finally, the balance of accounts is gradually becoming the rule: from -11.6% in 2012, the balance of social protection accounts returned to -0.4% in 2016, proof that the situation has improved with the resumption of employment.

France in the lead

In terms of Europe, France ranks first in terms of social benefits in GDP, ahead of Denmark (31.1%), Finland (31.1%) and Belgium (29.1%). %), far ahead of Germany (27.9%) and far ahead of Romania (14.3%) which is at the bottom of the scale. The EU average of 15 is 28.3%. “Paying pensions alone accounts for 12.5% of GDP in the EU-28,” notes the DREES report. They make up the largest share of total benefits (46%). For its part, the risk of illness and health care is the second largest expense item. It represents on average 8.2% of GDP and 30% of total EU benefits to 28. Health is thus a major item in the social protection accounts: “in the EU15, in 2015, the risk of illness and health care contributes 37% to the total growth of social benefits, compared to 22% in 2010, “underlines in this register the direction of studies. The health-care risk is thus the second largest item of social protection expenditure in the European Union, with 8.2% of the GDP of the states concerned, compared with 9.1% for France.

Various evolution of the dependent remains

The report also underlines the low share of household expenses in health expenditure: with an average of 6.8% in the EU in 2015, they are lower than in Luxembourg (10.6%), (12.3%) or in Germany (12.5%) and much lower than Spain (24.2%), Portugal (27.7%) or Greece (35.5%). The global economic and stock market crisis of 2008 marked a turning point on this issue. “The reduction of the public effort after 2008 has resulted in greater financial participation by insured persons in the cost of health goods and services, an increase in user fees or other forms of participation (franchises), or even through a reduction in the coverage rate of the population, “says Drees. Paradoxically, countries where the share of direct financing of health expenditure by households was already among the lowest, such as Germany and France, experienced the largest declines in the rest between 2009 and 2015.

Loan companies in Europe, America and Asia discuss social credit and microcredit in Seville

Loan and social credit institutions from Europe, America and Asia debate since Wednesday in Seville on the situation of pledge and social credit and microcredits through conferences, lectures and roundtables at the XXX General Assembly of the Association International of pledge and social credit entities (Pignus), which is held at the headquarters of the Cajasol Foundation in Seville.

Loan and social credit institutions from Europe, America and Asia debate since Wednesday in Seville on the situation of pledge and social credit and microcredits through conferences, lectures and roundtables at the XXX General Assembly of the Association International of pledge and social credit entities (Pignus), which is held at the headquarters of the Cajasol Foundation in Seville.

As indicated Cajasol in a note, this Wednesday at the headquarters of the Cajasol Foundation in Seville has been inaugurated the XXX General Assembly of the International Association of pledge and social credit entities (Pignus) by the president of the International Association and president of Cajasol Foundation, Antonio Pulido, and Máximo Díaz-Cano, Secretary General of the Presidency of the Junta de Andalucía, who have premiered the Congress that will gather during the next days the main institutions that are part of the world association.

Díaz-Cano has highlighted in his speech that “figures such as credit and social loans are necessary to correct the financial exclusion of the most vulnerable groups to the real effects of the crisis” since “finances are necessary for the development and for economic growth, hence the importance of Microfinance for the fight against poverty, self-sustainable mechanisms that go beyond being assistance actions, “said the Secretary-General of the Presidency of the Junta de Andalucía.

Antonio Pulido, president of Pignus, at the inauguration, clarified “the commitment to strengthen and renew the structures of the International Association, the relations between its partners, the discovery of new realities and, ultimately, to update the discourse so that the activity they represent our entity, old and unique as few, still has a relevant role in economic and social terms, as well as relations with multilateral organizations between the Inter-American Development Bank (IDB), the Andean Development Community and the European Investment Bank (EIB) ) “.

The working groups will discuss and expose, among others, the lectures and roundtables, ‘Pledge credit and microcredit in Spain after the economic crisis’, ‘The pledge activity in Spain’ by Inés García-Pintos de CECA. ‘MicroBank, a social, ethical and ecological bank’, the conference was given by José Francisco de Conrado of MicroBank La Caixa that will give way to the director of the Social Work of Ibercaja, Teresa Fernández Fortún that will explain ‘The new relationship between Social Work and Forestry of Piety ‘.

On the other hand, the Monte de Piedad Caja Madrid will open the debate on the contents of the first working session of the XXX Assembly by José Guirao of the Caja Madrid Foundation.

One of the novelties of this XXX International Encounter of Pignus presents Indonesia’s pledge credit institutions Perum Pegadaian, FederCrédito of El Salvador and the Andean Development Corporation (CAF) that will reveal the lines of work and development of the Indonesian and European entity in the current context.

Also, the panels ‘Prendario credit in Latin America I and II’ will be opened, in which they participate among others, Alejandro Iturra del Monte of Chile, Óscar Vivanco of Caja Metropolitana de Lima (Peru), Carlos Leiza of Banco Ciudad (Argentina) and Roberto Machuca from BIESS of Ecuador.

Also in the meeting will be exhibitions of new opportunities and jobs as the presentation of the ‘I International Course of Introduction to Pledge Credit’, created by Adolfo Meléndez Ielat-University of Alcalá that will announce the digital tool that is launched in this Congress for use and employment of social entities.

Also, this Thursday Maria Lahore, principal executive of the CAF Office in Europe, will unfold the present scenario under the conference ‘A historical descent in the interest of pledge loans’, as well as the Mexican evolution by Javier de la Calle del Nacional Monte de Piedad de México, the presentation report of the Salvadorans of FederCrédito and the planning of the work of the Dorotheum GmbH of Austria.

The closure will be borne by Antonio Pulido, president of the Association who will announce the final declaration of this XXX Pignus General Assembly with its reading and approval and where the next meeting will be announced for March 2014.

Spain will be the locomotive of growth in Europe

Spain has emerged from one of the biggest economic crises that are remembered. In 2008, the prick of the housing bubble and the slipstream of the international financial crisis caused a tremendous crack in our economy that took hundreds of thousands of jobs ahead. Its effects continue to be noticed today in thousands of homes. However, the good news is that the economic recovery is already underway and Spain will be the locomotive of growth in this new era.

Why will Spain be the locomotive of growth?

The Spanish Gross Domestic Product (GDP), which represents the total production of goods and services of our economy, sank precipitously during the years of crisis. However, today it has returned to positive values. In addition, the economic forecasts that the different agencies publish about our country point in only one direction: the economic growth will continue during the next years and, although it will go less, Spain will be the locomotive of growth of Europe.

The International Monetary Fund (IMF) has been the last agency to make public its growth forecasts. In these notes that the Spanish GDP will grow by 2.6% in 2017 and a little less the following year, 2.1%, with ours being the advanced economy that will advance the most in these two years. The problem, however, will continue to be the high unemployment rate, which will end at 17.7% this year and 16.6% in 2018.

The Bank of Spain also recently published its economic forecasts for Spain. In his report estimates that GDP will grow by 2.7% in 2017, 2.3% in 2018 and 2.1% in 2019. In turn, the unemployment rate will be 16.7% this year, 15.4% in 2018 and 13.9% in 2019. As we can see, these are slightly more optimistic forecasts than those of the IMF.

A little before the IMF and the Bank of Spain, the Spanish Confederation of Business Organizations (CEOE) published its Quarterly Report on the Spanish economy, in which it indicated that Spain would grow 2.5% this year and 2.3% in 2018. Meanwhile, the unemployment rate will fall to 17.5% in 2017 and to 15.8% on average in 2018.

Important is also the forecasts of the prestigious Organization for Economic Cooperation and Development (OECD), which coincide with the CEOE in that the GDP growth rate will be 2.5% in 2017 and 2.2% per year next, a tenth worse. Unemployment will be reduced to 17.5% this year and up to 16.1% next year.

BBVA also recently published its economic estimates in its Situation Spain report. These are the most optimistic among those published to date. He points out that we will grow 3% in 2017 and 2.7% in 2018. Meanwhile, the unemployment rate will continue to fall and will stand at 15.6% by the end of 2018.

How long will Spain continue to grow?

In general, very similar forecasts and they all go in the same direction: economic growth will continue over the next few years but will go down. Let’s not forget that in 2016 we grew at a rate of 3.2%. Although we are the locomotive of growth in Europe, our political leaders can not relax and must continue with the path of reforms that allow our economy to continue growing and reducing its huge unemployment rate.

How Much Do European Banks Stand to Lose?

The Greek government, especially, has provided social welfare benefits that it cannot afford. It has paid for them by borrowing money. Those who made the loans have now realized that they cannot be repaid…unless German and French taxpayers pay them back.
Why would northern European taxpayers be willing to pay back those who lent the funds to provide Greeks with general social welfare benefits? It is because it is their own banks that made many of those loans. The worry is that if the banks lose too much money on bad loans to Greece (and Portugal and Spain,) they will be unable to make loans to French and German households and firms. The result will be a return of the economy to recession.
What is the exposure of Euro area banks to these losses?
Daniel Gros and Thomas Mayer provide the following table:
Table 1: Exposure of euro area banks to the government as % of capital and reserves, 2009

Loans Securities Total
Central government 12 64 76
General government 52 77 129

What this means is that if all the European Union governments refused to pay any of their national debts, on the whole, the European banks would be insolvent. On the other hand, if they had just 29 percent more capital and reserves, they could take that massive loss.
More importantly, they point out that the public debs of Greece, Portugal, and Spain make up only a small portion of total European public debt.
Fortunately, the public debt of the three countries most at risk (Greece, Portugal and Spain) amounts to only about 14% of all public debt in the Eurozone.
While it is possible that European banks hold a larger proportion of debt of the countries most at risk, these figures suggest that the European banking system could withstand a substantial write-down of Greek debt. Let the Greeks default.
Because of the nature of capital regulation, any bank losses create the possibility of reduced lending–especially to business. Government regulation requires that when banks make loans to the business they have more capital than when they instead hold “cash” or government bonds. If a bank suffers a loss, it has less capital. If the regulators press the bank to return to the amount required by regulation, then the simplest way is to reduce new loans to business, and either leave repaid funds on balance with the central bank, or else purchase government bonds (presumably from Germany, France, or the U.S.) This change in the bank’s asset portfolio provides no additional capital for the bank, but by shifting to what the regulators consider less risky assets, the amount of capital required is reduced. The unfortunate side effect is that lending to business can be sharply reduced.
I think the solution is to suspend the capital requirements. The reason to have capital is to form a cushion against loss. When losses occur, capital and capital ratios should fall. As banks profit from their remaining good loans, they can and should gradually rebuild their capital and capital ratios.
The notion that governments should bail out those owing money to banks in order to prevent adverse consequences due to the operation of capital requirements is insane. Only slightly less insane is the prospect of the government bailing out banks so that capital regulations don’t cause a contraction in lending to sound borrowers.

Bulgaria and Europe. The European Development of Bulgaria after the Liberation

The beginning of 2018 and the Bulgarian Presidency of the Council of the European Union is a good time to look at the establishment and development of the political, economic and cultural ties between Bulgaria and the countries of Western and Central Europe.

In the coming months, we will tell you about the Bulgarian-European relations from the Bulgarian Revival to the present day. We will look into the life of the Bulgarians conducting the cultural exchange and their role in the building of the modern Bulgarian state. Together, we will reflect on the frequent reversals in the diplomatic orientation of Bulgaria and finding the right way for our country to the happiness, economic prosperity and spiritual development of its citizens.

Lovers of history are famous for the role of Khan Tervel in the rescue of Constantinople by the Arabs in the early VIII century. Almost 1,300 years ago, the Bulgarian ruler arrived at a critical moment from the Arab siege of help to the Byzantine Emperor. The victory of the Bulgarians, together with Carl Martel’s success in the Battle of Poitiers against the Omajid caliphate, 14 years later, prevented the Arab invasion of Europe and helped develop the medieval Christian civilization.

The Byzantine Empire is the most authoritative state in Early Middle-Eastern Europe, the heir of the Roman Empire.

The capital of Constantinople is the richest city on the continent with a population of more than half a million people. Byzantine diplomacy best exploited the achievements of Byzantine culture and art in order to preserve the dominant political position of the Empire despite the great migration of the peoples and its consequences. Quite naturally, the successors of Khan Tervel fall into the Byzantine orbit of influence – political and cultural, and consequently the acceptance of Christianity as a state religion by Prince Boris I

Over the following centuries, the balance of power in Europe has changed and the West has begun to play an ever greater economic, cultural and spiritual role to reach the 13th century when Constantinople was conquered by the crusaders of the IV Crusade, and the Bulgarian King Kaloyan confesses the spiritual championship of the Roman pope. The Ottoman invasion and the subjugation of the medieval Balkan states have for a long time devoted the region of Southeast Europe to the development of the rest of the continent. The population of the Balkans does not see the achievements of the Great Geographical Discoveries, the Renaissance and the Enlightenment.

After the initial shock from the foreign conquest, the Bulgarians gradually renewed their contacts with the nearby European Christian states – Russia and the Habsburg Empire, mainly with the help of the trade union of the Bulgarian Catholics. In the 19th century, a number of Bulgarians succeeded in touching the achievements of European civilization thanks to the modernization of the Ottoman Empire and the opportunity to study in Western universities. Returning to their native lands, they give a boost to the Bulgarian revival, which leads to the growing role of the Bulgarians in the Empire.

The process of inclusion deepened after the founding of the Principality of Bulgaria and Eastern Rumelia.

Gradually, despite the reluctance of the Great Powers, Bulgarians became a factor in European international relations. Building a modern state with working institutions is a tough process, but thanks to highly educated and conscientious actors of several generations, Bulgaria has been able to significantly catch up with its economic, cultural and political backwardness. The penetration of Western capital and economic thought contribute to the gradual build-up of a stable economy, and the construction of modern railway lines allows for an increase in cultural exchange. The presence of foreign diplomats and investors in the Bulgarian capital diversifies social life and introduces the latest fashion trends on the native soil. The young Bulgarian intelligentsia maintains constant contacts with the European and succeeds in becoming part of it. The lack of traditions is compensated by labor and respect for knowledge and art.

The two major military conflicts that tear Europe through the twentieth century, followed by the Cold War, set new artificial boundaries in the communication and interaction between Bulgarian and European culture. Bulgaria seems to be moving away from Western Europe, despite the development of communication technologies. The political changes in Eastern Europe since the late 1980s and the collapse of the Soviet Union have led to a re-orientation of the country in the West. The country’s main strategic objective is the membership in the European Union. Bulgarians are increasingly beginning to travel, work and study in Western Europe, and in 2007 the country is recognized as an equal member of the European Union. And at the beginning of this year, it took over the chairmanship of one of its main bodies.

The Presidency of the Council of the European Union marks a new moment in Bulgaria’s political development and its foreign policy capabilities.

On the one hand, it is a chance for the country to show that it again feels and acts as an equal and indivisible part of Europe, and on the other – to consolidate its position as a constructive leader on the Balkan Peninsula. To take advantage of these opportunities, we must well know our history and role in the development of the Balkans and Europe.