The Drayton Tribune The official student magazine for UCL Economist’s Society I Issue 1 - 14/15

draytontribune.org

The Puzzle of Europe: EU Briefing

Interested in careers within the European Union? Profiles on the Commission, Eurostat and ECB.

Academic Careers

What were the effects on the Brazilian economy from the

World Cup? Economics

Meet the department. Interviews with Frank Witte, Viv Crockford and

Christian Spielmann. University life

George Magnus Chief Economist UBS

30th September

Philip Coggan Editor the Buttonwood column, The Economist

14th October, 6pm

Lord Skidelsky Biographer of John Mayn

ard Keynes 11th November

Kevin Daly Goldman Sachs Chief Economist 17th November

LSE-UCL conference 19th November

Hugh Pym BBC Economics 1st December

Olivier Blanchard Co-author

“Macroeconomics - A European perspective”

12th December

Martin Wolf Chief Economist FT

14th January

Stephen King Chief Economist HSBC

29th January

Fransesco Giavazzi Co-author

“Macroeconomics - A European perspective”

9th February

The Economist’s society’s

Academic Events for the coming new year

Opinion Journalism put to the test

Politics The European Union: Too Close?

Economics

Brazil’s economy: An overview

The economics effects of the World Cup

The World Cup and the stock market

The unlikely revolution of flexible prices

University Life Meet the department:

Frank Witte

Viv Crockford

Christian Spielmann

Academic Careers EU Careers:

Introduction

The European Commission

The Eurostat

The European Central Bank

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The Drayton Tribune

Editor-in-Chief: Nils Larsson

nils@eldinglarsson.se

Chief Economics Correspondent: Zaim Beekawa

zaim@live.co.uk ���

Chief Political Correspondent

Maria Uttenthal maria.uttenthal.13@ucl.ac.uk

Chief Academic Careers Correspondent

Jasmine Kang zijun.kang.13@ucl.ac.uk

Design and Layout Director

Boyoung Ahn b.ahn.12@ucl.ac.uk

Chairman

Pablo Pena Corrales Pablo.pena.12@ucl.ac.uk

Dear Reader, It is my pleasure to welcome you to the first ever published issue of the Drayton Tribune which marks the start of our first year as the official student newspaper for economists at UCL. One of the news this year is that the Drayton Tribune now is officially part of the Economist’s society. The new editorial team and I look forward to this collaboration and we are confident it will lead to an increase in the number of our readers as well as provide numerous opportunities for creative economic thinking. Over the coming academic year, the Drayton Tribune will be recruiting enthusiastic students for various correspondent positions. This is an opportunity not to be missed for anyone that has ever considered pursuing a career within journalism. It is also a great way to improve your CV and to get more involved within the Economist’s society. As part of the editorial team you will be writing articles for one of the four categories - economics, politics, university life or academic careers - that will be published either in the magazine or on the website. You will also be encouraged to take your own initiatives and cover areas outside your chosen section. More specific information regarding what positions are available will be released on our website and Facebook page the 22nd of September. I am also pleased to announce that we have invited Sam Fleming, the financial policy correspondent at the FT and previous economicseditor at the Times, to hold a talk on careers within journalism at UCL. The event will be held on the 2nd of October and will include some further information and tips regarding the application process to the correspondent positions. More information about the event can be found on our website and Facebook page. This issue offers something for everyone with articles ranging from economic analyses of the World Cup to exclusive interviews with departmental staff. If you are planning on going on the Economist’s society’s EU trip this autumn I would recommend having a look at the politics and academic careers sections. The former offers a briefing of the European Union, taking one through everything fromits history to its current legislation process; the latter on careers within three EU institutions. I hope you enjoy reading this magazine. For more information aboutthe Drayton Tribune please visit our website at draytontribune.org. Best wishes for the upcoming academic year,

Nils Larsson Editor-in-Chief 14/15

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Opinion Journalism put to the test Security fence. Apartheid wall. West Bank barrier. Which one is better?

That depends on who is talking. An Israeli would go for “security fence”, a Palestinian would say “apartheid wall”, and the more neutral, less emotional choice of words would be “West Bank barrier”. Few topics are as sensitive as the Middle East conflict, evoking intense feelings all over the world. When the media shows pictures from Gaza it is bound to cause strong reactions. The same is true if a journalist critically asks a former doctor from Gaza City why he does not think Hamas is a terror organisation. Or if he asks an Israeli ambassador how he would explain the killing of 18 Palestinian family members after claiming that Israel is avoiding civilian casualties. But during an interview, it is important to realise that critical questions are part of the interviewer’s job. They are not expressions of hisown personal opinion, but a way to test the thoughts of the interviewees. In the Middle East conflict there is no single truth. There will always be two different realities, and two different tragedies. As we have seen with the latest renewal of these eternalhostilities, this makes the job of a journalist very difficult. Reporters worldwide have repeatedly been accused for lack of objectivity, one-sided coverage, or for having backgrounds that make them unqualified to deal with the conflict. Can a journalist with Jewish roots, for instance, give an impartial analysis of this conflict? Though on the surface this might seem like a kind of scepticism that is fairly easy to follow, we have to think really carefully before asking a question like that. Because if the answer is no, then there is a considerable problem with the world’s entire media scene. The Middle East conflict is indeed a very tense case, however there are hardly any topics where a certain background could not potentially be a problem, should the journalists bring their personal opinions to work. Their job is to present both sides of any case so the reader can make up hisown mind, and we have to trust journalists to be professional. This would be regardless of whether they are simply letting both parties tell their stories, or if they are critically interviewing an Israeli or Palestinian representative. As long as they address everyone and every statement in the same way, there should be nothing to get nervous about. Naturally, simply passing on information from the affected areas is a much less risky kind of reporting. However, we can not deny that we need both kinds of journalists. In this particularconflict, the eggshells break quite a bit easier than in other ones, and it undoubtedly takes finesse and well thought wordings to come about asking the right questions and display all sides, without deliberately offending anyone in the process. But these are skills that we have to assume that any journalist possesses, and thus we should not waste time worrying that they will not succeed. All in all, no one should let his or her strong feelings about a topic such as the conflict in the Middle East question the reliability of the entire media scene. We have to believe that we livein a society where everyone acts professionally, regardless of their own beliefs and backgrounds. In this case, as a journalist, this means always going with “West Bank barrier”.

Maria Uttenthal

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“This morning I want to talk about the future of Europe. But first, let us remember the past.” These were the first words of Prime Minister David Cameron’s long-awaited speech on the EU at a time where the growing scepticism towards the relationship between UK and the EuropeanUnion had to be addressed. Alongside was the question of a soon-to-be-held referendum and a Conservative pledge to bring back powers to the British government from Brussels. But before we dive into the deliberate words of Mr. Cameron, let us first do as we are told: remember the past. The beginning of the European Union was first and foremost a consequence of the negative experiences of the founding member states during and immediately after World War II. Belgium, France, Germany, Italy, Luxembourg and the Netherlands signed the Treaty of Rome in 1957 which built on the success of their Coal and Steel Treaty from 1951. The Treaty of Rome created the European Economic Community, EEC, and proposeda common market of goods, services, money and people within the member states. The war acted as a catalyst for renewed interest in European unity and in securing peace. What are worth making mental notes of after this treaty are the following years: 1973, where Britain, Ireland and Denmark joined the union; 1986, where the Single European Act was launched – a six-year programme aimed at sorting out problems with the free flow of trade across EU borders, mainly the differences in national regulations; and 1993, where the single market was completed with its four freedoms: the free movement of goods, services, people and capital.

However, according to Cameron this singlemarket still has traits of incompleteness. Because of ineffective and slow decision- making, the European single market cannotbe at the forefront of essential trade deals with the US, Japan and India as it should be. “Competitiveness” is one of his principles for a new, 21st century-fit EU, and “that means creating a leaner, less bureaucratic Union, relentlessly focused on helping its member countries to compete.” To fully understand this point from the articulated Prime Minister, it would make sense to spend a few minutes on the structure of this Union. The European Union now consists of 28 member states who act collectively throughan institutionalised system of decision- making. This means that they have pooled some of their sovereignty, gaining strength on the international arena in return. The most commonly used method of decision-making is called the Ordinary Legislative Procedure (OLP), where the European Parliament and the Council of the European Union are co-legislators: popularly speaking, the two institutions “co-decide” EU laws. The European Parliament is the directly elected legislative arm of the EU. There are 766 members of the European parliament (MEPs) from all member states and the official seat of the European Parliament is in Strasbourg, France. The main meetings, ‘plenary sessions’, takes place here 12 times a year, though additional ones are held in Brussels as well. During these meetings the MEP’s examine proposed legislation and vote on amendments. Within the Parliament, national parties join in EU-wide political groupings, and all but 28 members belong

to one of these groupings, with the European People’s Party being the largest. Overall, the three main roles of the parliament is the power to pass laws (technically by the OLP), the power to exercise democratic supervision over all EU institutions and the power to influence EU spending. As is the case with their power to legislate, they decide jointly on EU’s annual budget alongside with the Council of the European Union. Where the European Parliament is said to be the ‘voice of the people’, the Council of the European Union – or simply, the Council – is said to be the ‘voice of the member states’. It consists of one minister from each member state, and is an essential EU decision-maker. In Council meetings, the ministers meet to discuss and adopt legislation or to coordinate national policies. An important point is that the ministers attending these meetings depend on the subjects discussed: an environmental meeting calls for the environment ministers from each member state, and so on. The presidency of the Council rotates every 6 months, and is currently in Italy’s possession with Mr Matteo Renzi. Moving on to the next institution, it is time to watch one’s step. That is, the EU has more than one council, and the European Council is something different. This is the council that gives the EU as a whole general political directions and priorities. While the Council of the European Union consists of government ministers and pass European laws, the European Council consists of the Heads of State or Government (Presidents and Prime Ministers) as well as the President of the European Council and the President of the European Commission and is the highest- level policymaking body in the EU.

Politics Too close?

EU Briefing

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The President of the European Council is elected by the institution itself for a once- renewable term of two and a half years. It is a full-time job and you cannot simultaneously lead a national office. Currently, the President is the Belgian Herman Van Rompuy, though he will end his second term on November 30, 2014. “In a global race, can we really justify the huge number of expensive peripheral European institutions? Can we justify a Commission that gets ever larger?” Keeping Cameron’s sceptical voice in mind, we turn to the final large European body, theEuropean Commission. It is meant to be the politically independent institution, proposing laws and policies, as well as implementing decisions of the European Parliament and the Council. The Commission consists of the so-called ‘Commissioners’, one from each member state. They have all held political positions previously in their respective home- countries, however as Commissioners they are expected to act independently of nationalgovernments and only in the interest of the EU as a whole. The

Commission has the ‘right of initiative’ – something to make a note of. It means that itis solely responsible for proposing new European laws that later are presented to theParliament and the Council. The Commission is also a ‘guardian of the treaties’, making sure EU law is properly applied in all member states, and the officialrepresentative of the EU on the internationalstage. Structurally, the Commission is divided into directorates - generals, DGs, each DG being responsible for a certain policy area and headed by a Director-General, who answers directly to a Commissioner. It is said that the President of the Commission who is elected for a once-renewable five-year period, is the most powerful officeholder in the EU, in particular due to the mentioned right of initiative. The former Prime Minister of Luxembourg, Jean-Claude Juncker, will replace the Portuguese José Barroso as President in November this year. The choice of Juncker has not been without opposition, especially from the UK. He is known to be a leading advocate of deeper EU integration and Cameron has called him

an ‘old-style federalist’. Also, he was the so-called Spitzenkandidat (lead candidate) of the European People’s Party that ended up as the biggest party in the recent Parliament elections. By appointing him to this crucial post, the Parliament suddenly has the power to dictate terms to the European Council – at least that is how Cameron has expressed it. The problem with having a man who stands for deeper integration running the Commission at this point is that we have recently seen a remarkable wave of Euroscepticism arise. Both the far-right National Front of France, as well as the Eurosceptic UKIP of Britain won first places with the national voters in the recent European elections. The elections showed that parties wanting to reclaim powers from Brussels are more popular than ever. Also, the growing economic gap between Eastern and Western Europe is a massive concern, pulling voters towards parties in favour of less migration. The core EU principle of freedom of movement is thus up for serious discussion.

Politics

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“There is a gap between the EU and its citizens which has grown dramatically in recent years. And which represents a lack of democratic accountability and consent (…).” Cameron knows it, and so does everyone else. Ever growing institutions and a fundamental disillusion of the EU are important issues to address if this gap between the EU and its citizens is going to be closed. One thing is to look at how to make the decision-making process more transparent and efficient, but other more concrete tasks for the EUare undoubtedly to promote growth, competitiveness and employment. After years of economic crisis, many people have only seen their living standards worsened due to tough austerity or taxes used to bail out governments on the other side of the continent. With austerity terms imposed by the EU, negative feelings about national sovereignty being taken away are bound to arise. The Eurosceptic wave is the consequence and while it is important to point out that the pro-EU groupings still hold the majority of the seats – making it unlikely for the European Parliament to adopt a fundamentally different approach – the wave is nonetheless big enough to make a roar. As it was recently emphasized in an issue of The Economist, one could hope this would make the Commission reaffirm that the EU should only deal with issues that are demonstrably more efficient at the European level. This could provide an opening for Cameron to renegotiate and move power and sovereignty back to

Britain, as he has promised voters. But the reinforced anti-EU presence is also likely to make the voice of the Parliament more sceptical towards free markets and free trade, especially at the global level. This is problematic, because global faithin European unity is already weakened as a result of the recent euro crisis. Eventhough the Eurozone economy is in recovery, it is happening at a disappointing pace, which is obviously making it hard for the EU to achieve the much needed results regarding lower unemployment and higher growth. The euro is supposed to be a strong symbol of the European identity and create a stronger presence for the EU in the global economy. It is a logical complement to the single market, increasing efficiency and price transparency. But as Cameron expresses it, “The Union is changing to help fix the currency – and that has profound implications for all of us, whether we are in the single currency or not”. The euro has many gains, until it is in trouble. The Eurozone is struggling withdisturbingly low inflation, and the European Central Bank is failing to meet its targets on money supply growth. Furthermore, we are seeing a very uneven recovery; while the Germanoutput has expanded sharply for instance, the French has stagnated, and the Italian output has actually contractedduring the first quarter of this year.

Until the storyline of revived business and consumer confidence and the return of investors move on to dominate these current struggles, the EU will have a very hard time turning its citizens’ scepticism into optimism. So where to from here? Hopefully, the future of Europe is bright, and hopefullythe necessary changes will be made. Hopefully, the British EU referendum does not end with an exit, and, hopefully, the Single Market will thrive and prosper. Optimal conditions for a currency union would be if there was a fiscal and political union as well. This will never be a complete reality, but that does not mean the euro will not return to its strong self. The 28 member states are a diverse group, and in quite drastic manners, they have expressed this recently. Not everyone wants the same level of integration, and though Europe will definitely stand strongest in unity, we have seen that this can only happen to a certain extent. While it is important to have a common set of rules for the Single Market, the EU needs to embracethe diversity and come up with solutionsthat can work for countries as different as its members. Solutions that are approachable and transparent for the European citizens, and that truly show them the great and indispensable potential of the European Union.

Maria Uttenthal

Politics

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Latin America’s largest country, Brazil, liesseventh in the league of the wealthiest economies, with a GDP of 2.253 trillion USD (as of 2012). Despite being the seventh wealthiest economy, there are cleardisparities between social indicators such as health and infant mortality across regions, with a clear divide between the more affluent south and poorer north. Poverty is described as living with only $2 a day, and, remarkably, Brazil has slashed its population poverty rates from 21% in 2003 to 11% in 2009. This dramatic decrease is also evident when looking at the extreme poverty levels, which are people living with $1.25 a day, as the number fell from 10% to 2.2% between 2004 and 2009. More so, the differences between the incomes of the richest and poorest parts of the population have decreased due to the growth figures seen between 2001 and 2009, as throughout these years the incomes for the poorest 10% of the total population increased by 7% per annum whereas for the richest 10%, income only increased by 1.7%. Natural resources are plentiful in Brazil and therefore, unsurprisingly, the top five products exported by the country, from highest to lowest, are Iron Ore, Crude Petr-oleum, Soybeans, Raw Sugar and Coffee. Brazil is also the world’s largest producer of coffee beans and although the country isstill a key producer for many agricultural products, there has been a shift since the

mid 20th century with larger importance being placed on the industrial and mineral prospects. Brazil lies a solid 9th amongst the world’s largest oil producers and Petrobas, partly owned by the government, is the 8th biggest company in the world and holds the mantle for the leading production of oil in the nation. Brazil is one of the largest greenhouse gas emitters in the world which partly is due toit’s big cattle herd industry. Also, due to themass quantities of Brazil’s livestock, an increase in deforestation has been observed, further securing Brazil’s aforementioned title. However, Brazil doesnot only focus on natural industries and its reach spreads to more sophisticated sectorssuch as automobiles, aircrafts, computers, steel, consumer durables, and petrochemicals. These industries contributeto 26.4% of the country’s total GDP and 14% of the nation’s labour force. Coming back to the ‘top five’, we observe that the top products imported by Brazil are refined petroleum, crude petroleum, cars, vehicle parts and petroleum gas. Its top export destinations are China, the United States, Argentina, the Netherlands and Germany. The top five import origins of Brazil begin with the distant neighbour the United States; China, Argentina, Germany and South Korea then follow suit. Brazil’s exports data when looked at over the years tells a clear story, and that is

a story of growth. The exports in Brazil in June this year were $20468 million, faintly down from the $20752.08 million seen in May. This does not sound great, but when it is compared to the average exports from 1954 to 2014, which is at a poor $4091.43 million, it undoubtedly looks much better. The spread of the country’s exports data reveals some more interesting figures, withthe lowest recorded in January 1965 at $75.06 million and the highest, almost a staggering 350 times greater, logged at $26158.51 million in August 2011. However, not all has been plain sailing for the Brazilian economy with GDP growth showing a dramatic deceleration from 7.5% in 2010 to 2.7% in 2011. But its deterioration did not stop until 2012, wherean incredibly low growth rate of 0.9% was observed. With a negative change in GDP growth of 88% between 2010 and 2012, it could easily be understandable if these figures acted as a catalyst instilling a more pessimistic outlook on the economy amongst Brazilians. This is reflected in the data in the figure above from LatAm Confidential, which shows how Brazilian confidence on economic performance has depleted since 2012, with confidence showing monthly fluctuations but in annualterms is cascading down

Economics Brazil’s economy: An Overview

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Economic Confidence Index Houshold Financial Situation Index

Brazil and the World Cup

Source: LatAm Confidential

But is this pessimism and skepticism justified? The answer remains debatable. Data from the World Bank’s Global Economic Prospects publication, showed in the figure below, shows GDP growth picking up from 0.9% in 2012 to 2.3% in 2013, altogether rising to a forecasted GDP growth prediction of 3.1% in 2016. Whilst these figures should not set the cork flying from the champagne bottles, especially when compared with the consistently higher GDP growth rate of developing countries –which may be explained by solovian catch up, a theory shown through the Solow model that poorer countries catch up with richer countries due to higher marginal rates of return - Brazil moving away from decimal point growth figures must at least be applauded in such a slow growing and recovering global economic climate. If the rivalry on pitch is anything to go by, then comparing the GDP growth rate of Argentina and Brazil will be a source of joy for Latin America’s largest country with its projected GDP growth rate remaining above the one of its close neighbour from 2014 to 2016. The improvement in economic growth may be attributable to the increased investments throughout sectors such as infrastructures, which have been a major part of the Brazilian government’s ‘Programa de Aceleroação do Crescimento’ scheme. Additionally, these figures may also stem from the effects that

the social programme ‘Bolsa Família’ has had. In 2003 the scheme was launched with the aim of lifting vast amounts of the population away from poverty, which was done by more than just the government redistributing money. The scheme also involved providing meals, training and help to give those who were part of the programme more skills to enhance their employability, helping young children make it to school and providing health treatment. Prior to this Brazil had been investing almost 22% of its GDP within social sectors such as education and health. In contrast, the Bolsa Família scheme cost only 0.6% of GDP. But has it been effective? From looking solely at the data, the answer would be yes. The programme, which reaches more than 13 million households, has helped decrease the levels of extreme poverty of the population from 9.7% to 4.3%. The Gini coefficient, a measure of inequality, has dropped from 0.58 to 0.54, showing clearly the positive effects that ‘Bolsa Família’ has had and is having in Brazil. In 2007, Brazil saw the introduction of thePrograma de Aceleroação do Crescimento (PAC), which had the objective of increasing infrastructure investment. PAC Phase 1 (PAC1) was designed as a 4-year project during the years of 2007 to 2010. PAC Phase 2 (PAC2), which followed PAC1, begun in 2011 and is scheduled to end in 2014.

The objective that PAC sought to tackle was to form a scheme that would amalgamate transport, energy and social projects together. In preparation for hosting this years World Cup and the 2016Olympics, as well as answering growing concerns over the out-dated infrastructure, which led to a blackout in 2001, PAC1 brought with it investment plans worth a staggering R$504 billion. (This figure wasincreased to R$646 billion in 2009, in response to the need to support the economy and to offset the detrimental effects of the global financial crisis.) This large sum was divided unequally into threeparticular areas, with over 50% being injected into energy projects, a little more than 30% set aside for housing needs and logistics claiming a very small fraction of the R$504 billion. Approximately R$70 billion came from the federal government and the large remainder from private and state-owned companies, which notably included the goliath oil company, Petrobras. As well as focusing on an increased infrastructure investment strategy, PAC1 also introduced tax breaks, long-term fiscal measures and incentives to promote infrastructure development that would hopefully lead to faster economic growth. In addition to this, the government tried to give incentives to households with the aimof increasing the amount of loans taken out.

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Developing Countries

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GDP growth Source: Global Economic Prospects (World Bank)

In March 2010, PAC2 was announced armed with a massive R$959 billion investment ‘war chest’ that would be spent within the logistics, social and urban programs and energy sectors. The investment policies were sub-divided into six key areas: Melhores Cidades (Better Cities), Cidadania da Comunidade (Community Citizenship), Minha Casa, Minha Vida (My House, My life), Água d Luz para Todos (Water and Light for All) and Transportation and Energy. The Melhores Cidades project was equipped with a R$57.1 billion investment and had the objective of enhancing the quality of life within certain cities, concentrating on areas such as sanitation and crime avoidance. R$23 billion was set aside for improving facilities such as sporting and health services, as part of the Community Citizenship scheme. Minha Casa, Minha Vada, was designed for the low-income members of Brazil, giving them the opportunity to call themselves homeowners by offering low interest rate mortgages. This program, with an investment of R$278.2 billion, also createdmany new jobs particularly within the construction industry. The R$30.6 billion ‘Water and Light for All’ scheme had the purpose of providing less privileged districts with free lighting as well as enhancing the water supplies. With a R$104.5 billion investment in transportation, plans to improve and develop airports, ports and roads were made. The bulk of the PAC2 investment fund, R$465.5 billion, went to the Energy sector with the money being directed to thedevelopment of renewable energy sources, the research into minerals and the improvement of oil production and electrical efficiency.

Hosting the 2014 FIFA World Cup and the 2016 Olympic games has fixated the world’s gaze on Brazil, and the watchful eye of the world has certainly been lookingto see if Brazil has coped with the demands that these sporting events require.More so, Brazil has utilised this opportunity under the spotlight to showcase the strides in investment and growth that it has taken, particularly for the enhancements within the transport sector. Especially as the needs of the WorldCup and the Olympics were considered when constructing investment plans for PAC1 and PAC2. However Brazil’s future is not without challenges. The general consensus floating around is that Brazil with its trend of higher inflation will severely limit the advancements of its macroeconomic conditions. In May the 12-month IPCA inflation index was 6.37% and rose to 6.52% in June, outside the government’s target of 4.5%. The IPCA index began rising in the middle of 2012, which spurredthe Central Bank to act and begin tightening by increasing the BACEN SELIC rate from 7.25% to 11% to counteract this deadly inflation surge.

However, according to several economists this contraction has not been enough. Some believe that because the government is committing to polices that raise employment levels, such as the ‘Bolsa Família’ scheme and PAC programme, the labour costs are increasingand as a consequence leading to higher prices. Brazil’s factory segment is also in aplummet, as well as business confidence falling. Opinions are out on the government’s approach with some believing that an economic upturn is on its way and that prices will fall as superior economies across the globe gain strength and begin trading more. However, some are comparing the situation in Brazil to a stagflationary situation due to the slow growth and high inflation. The steps Brazil have taken to improve its economic growth combined with the implementation of growth acceleration plans may well do enough to encourage a more optimistic view. But now that the canary yellow shirts are casted aside, and Brazil takes its breath, it remains to be seen whether President Rousseff will succeed in securing another term.

Zaim Beekawa

PAC 2 INVESTMENTS In US$ billion (R$billion)

PAC 2 Initiatives 2011-2014 Post-2014 Total Better City 31.3 (57.1) - 31.1 (57.1) Bringing Citizenship to the Community

12.6 (23.0) - 12.6 (23.0)

Housing 152.5 (278.2) - 152.5 (278.2) Water and Light for all 16.6 (30.6) - 16.6 (30.6 Transportation 57.3 (104.5) 2.4 (4.5) Energy 255.3 (465.5) 343.9 (627.1) 599.2 (1,092.6) Total 526.0 (958.9) 346.4 (631.6) 872.3 (1,590.5)

Sector Estimate Execution (%)

Logistics 104.4 52.30 50%

Energy 294.2 175.10 60%

Social and Urban Development 266.5 168.40 63%

PAC Total 664.2 395.80 60%

When PAC1 concluded in March 2010, opinions were split on its effectiveness. However data from the Executive Office of the Presidency of the Republic, seen in the table to the right, suggests perhaps the negativity was unjustified, as figures show that the execution success of the plans were at 60%.

Economics

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*Estimate (2007/2010) and Execution (2007/2010) Source: Executive Office of the Presidency of the Republic  

Source: World Bank

Brazil and the World Cup

In 2007, the majority of voters were for theWorld Cup being staged in Brazil. Seven years later, when the eyes of the world turned to the host nation with fans from allover the world arriving to see their nationalteams compete, Brazil welcomed them with protests and towns decorated with ‘FIFA GO HOME’ posters. So what changed? In 2007, Brazil was relishing from prosperous economic growth due to high commodity prices as well as the sighting of oilfields in Rio and an expanding, young labour force. However, since then growth in Brazil has plummeted and members of the population have voiced their opinion, emphasizing the needfor improved services that matter to the Brazilian people in the long term, such as health services and education. The Brazilian government did not only focus on stadium refurbishments when it came to the preparations for the World Cup, which should at least have quieted the crowd. It also announced plans for newbus lines in Rio and two new airport terminals. In an attempt to quell the criticism expressed by its own citizens, the government produced an advertisement outlining the potential economic benefits of the World Cup. The advertisement focused on the R$17.6bn that would be injected into public transport and in response to the argument that money was needed elsewhere, the advert highlighted the fact that spending on health and schooling were already a massive 100

times larger than the cost of the venues. The data released also painted a positive picture in terms of employment, with figures stating that over 700,000 new jobs would be created thanks to the football tournament. It was estimated that the World Cup would add approximately $3.03 billion to the Brazilian economy, however this figure, generated by the Ministry of Tourism in Brazil, was based on the assumption that 3.7 million people would travel around the country and that foreign visitors would watch an average of four world cup matches per person, spending around $2488 each in total for their visits. However, the Minister of Tourism, Mr Vincius Lages, has argued that as the research methods used to find this data did not take into account the increased amount of indirect financial transactions that may result from the higher number of tourists, the overall turnover may be more than double the estimated $3.03 billion figure thanks to the positive multiplier effect. He also stated that during the Confederations Cup, a less popular sporting event than the World Cup, tourists visited 138 cities, and expected the same figure for the tournament in 2014 to be in the 300s, showing how the tournament may have helped boost tourism all over Brazil. Trust in the government’s figures may be divided but it is clear from the FIFA Confederations Cup in 2013 that sporting

events can and have positively impacted the Brazilian economy. Statistics released by the Economic Research Institute Foundation has found that the Confederations Cup caused R$20.7bn in financial transactions, with R$11bn being spent by tourists, the local organising committee and private and public investors. Promisingly, a massive R$9.7bn was added to the GDP of Brazil and in the same study by the Economic Research Institute Foundation, predictions state that the World Cup, a greater, more prestigious and famous competition, will have added almost R$30bn to the Brazilian GDP. The spending of R$9.7bn from the Confederations Cup into Brazil’s GDP wassplit with 58% going to the host cities of Rio de Janeiro, Brasilia, Recife, Salvador and Belo Horizonte and the rest of Brazil receiving the remaining 42%. These are encouraging figures as they show the widespread effects a sporting event can have on a country, even in places outside the host cities. The effects on employment were also positive, with the ConfederationsCup catalysing the creation of 303,000 jobs. Again, the effects of the tournament in 2013 were not just felt in the main towns, with 40% of the new jobs being created in non-host cities. Amongst the host cities, Rio de Janeiro was the one where the most financial transactions had occurred.

Economics

The possible economic effects of the World Cup

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The injection of R$6bn into the economy resulted in a subsequent enhancement of Rio’s GDP by R$2.8bn. Rio can also pride itself on creating 59,000 jobs, the highest number amongst the host cities, and figures also show that $117million was spent by both Brazilians and foreign tourists in Rio. The benefits of the World Cup can be sighted in the paragraph above, with figuresfrom the Confederations Cup fuelling the optimism, however, there are still doubts onwhether the World Cup have had a positive impact on the Brazilian economy. For example, the argument stating the World Cup created numerous amounts of jobs collapses with the fact that most of these may have been temporary ones only lasting for a year. Furthermore, the expected tourism boost of 15% in 2014 to a total of 7.1 billion does not take into account the fact that hosting the tournament may have deterred non-football interested tourists from going to Brazil, possibly leading to an overall decrease in the number of foreignerswho visited the country during this period. This decrease in tourism due to sporting events is not uncommon and was felt by theUnited Kingdom as a result of hosting the 2012 Olympics. The Office for National Statistics carried out a study which showed how the UK did not experience an “Olympic effect” because even though the level of tourists increased, the amount of actual arrivals fell because the hosting of the games in the city of London caused other travellers to want to avoid the UK altogether.

The hosting of the World Cup left Brazil in the spotlight for the duration of the tournament and whilst this gave the nation the opportunity to show off its new infrastructure, as well as schemes designed to tackle poverty such as ‘Bolsa Família’, the limelight may have been as detrimental as it was beneficial. With the demonstrations seen on the first day of the tournament, it came as no surprise that people were questioning whether Brazil was the right country to stage the sporting event. Some argue this bad publicity may have had an impact on tourism in the short-term after the tournament. Also, Brazil’s capacity to draw foreign investment, particularly in the short-term, may have been affected by the infrastructure problems experienced during the past year. For starters, in preparation forthe World Cup, a construction calamity occurred in November when a roof girder collapsed into a stadium, causing the deathsof 2 workers. Furthermore, during the tournament, more fatalities were caused when a Bridge collapsed in Belo Horizonte,crushing buses, cars, and trucks. Criticism instantly fell upon Brazil, with people stating this was a clear example of how underprepared and rushed the government was in its preparations for hosting the tournament. In addition to this, the infrastructure plans that were to occur in thehost cities were put on hold until after the tournament, and only a few cities were still building sites at kick off on the 12th of June. President Rousseff’s aim of convincing investors that the economy of Brazil can go back to its previous levels of higher growth has certainly not been made easier by these infrastructure problems.

The tournament has also left its mark on inflation with personal expenses having bumped up 1.57% as a result of a 25.33% rise in hotel prices and a 21.95% increase inAirfares. Even though inflation decreased to 0.4% from 0.46% in May, these figures are still faster than the median forecast of 0.39%. Some argue President Rousseff’s attempts to restrict regulated prices in order to prevent an inflation surge that has affected consumer confidence has not been enough, as consumer prices increased above the government’s upper target limit of 6.5% in May. Regulated prices have risen 3.95% in the past 12 months, but in May this statistic rose to 4.09%. Expectations were set at the highest level for the Brazilian national team and victory at the Estádio Maracanã on the 13th of Junewas more of a requirement than a hope from its supporters. Unfortunately, Brazil failed to see out this task and in the coming weeks and months, when sufficient data hasbeen acquired and studied, one will see if the World Cup has left any positive mark onBrazil or if the promises and expectations of clear economic benefits have failed to materialise. If any negative effects are found, the main question to discuss will be how the Brazilians will react to hosting the Olympic games in 2016.

Zaim Beekawa

Economics

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The World Cup in Brazil was predicted to have an effect on the Brazilian stock market, particularly on certain companies that specialise in providing entertainment and hospitality services. In particular, breweries were projected to benefit, especially as the production of beer increased by 14.75% in May in comparison to a year earlier. This was due to productionbeing upped to meet the demands during thetournament, with 3.2 billion litres of beer being brewed in the second quarter of this year. Before the start of the world cup, Ambev, the largest beer producer in Brazil, was hit with government plans to increase beer taxes. The increase in taxes was scheduled to be implemented on the 1st of June and on the 30th of April, the day of announcement of an increase in beer taxes,Ambev shares plunged from R$17.16 on the29th of April to R$16.30 the day after. The Brazilian government then decided the increase in beer taxes would be applied gradually from September, allowing Ambevshares to slightly recover. With a boom in beer production, one would assume that theWorld Cup would have caused an increase in the share price of Ambev. However, its shares failed to show any gains and fell by almost 6.5% in May, causing them to be around 5.85% lower than a year before. Thisfall may have been due to the change in the prices of beer, which were 10.3% higher in June this year compared to the same month in 2013. This increase may be explained by the concept of price elasticity with manufactures realising the higher demand and the need for beer during the tournament,with little substitute beverages, meant they could raise prices without harming their sales. The increase in prices were not the same across cities, with Salvador showing an in-crease of 25% over the last 12 months and Rio showing a lesser, but still dramatic, increase of 16.9%. GOL, one of Brazil’s largest airlines, was expected to have benefited from the increased travel during the time of the World Cup, suggesting its shares should have increased in value. However this was

offset by a fall in business trips, with peopleavoiding Brazil at the time of the games. Prior to the tournament, GOL shares (GOL Linhas Aereas Inteligentes SA - (BVMF:GOLL4)) reached a 1 year high of R$15.19 on the 5th of May 2014. This may have fuelled optimism that the shares of GOL were taking flight, however fast forwarding to the13th of June, a day after the opening ceremony, GOL shares traded at a decreasedprice of R$12.57. They continued to trade atthis similar price throughout the tournament, but has since shown a steady rise with the shares costing R$13.92 on the 21st of August. It is almost a general rule that the stock market of a host nation performs well in the month following a sporting event, and even with the disappointment of shares such as Ambev, the Brazilian stock market, when measured using the IBOVESPA index, improved by 3.8% after their national team’s humiliating defeat by Germany on the 9th of July. However, Brazil may be missing out on some benefits, as a study by Goldman Sachs revealed that if Brazil had won the competition its stock market would have performed above average for up to four weeks after the final. It was not only the host nation’s stock market that improvedas a result of the tournament. The German stock exchange began trading higher on the morning after the world cup and Goldman Sachs’ study also found that the triumphant team’s country would see their stock marketoutperform global equities by around 3.5% in the month after the games. Also, the stockmarket of the runner-up is said to be harmed by the defeat, and this is exactly what was observed with the Argentinean stock market taking a dive of 0.6 % on the Monday after the final. Whilst football players and football teams may not be traded on global stock markets, it is evident that their performances at prestigious and international events such as the World Cup, can and has affected stock markets around the world.

Zaim Beekawa

The World Cup and the stock market

Economics Brazil and the World Cup

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In the unending bazaars that surround Djemaa El-Fna square in Marrakesh, one’sbargaining skills are constantly challenged,but as anything in life, ability is not enough. Some uncontrollable personal characteristics will determine the absolute bargaining power. For example and unfortunately for the author of these lines, this negatively correlates with the paleness of the buyer’s skin. This is price discrimination at its best, where sellers try to individually adjust their prices to the consumer willingness to pay. Hence, the

market operates with flexible prices. This violates one of the mainstream assumptions when studying microeconomics: prices are fixed. By releasing such an assumption, we propose an unconventional market set whose unlikely success could somehow improve people’s lives and make a modest case for humanistic optimism. Our market set can take several forms and accepts a wide range of subtle variations. For a matter of simplicity we will take the easiest modalitywhose description fits into one sentence:

people are asked to pay a certain price p* ifthey can, if not they pay as much as they think they can, although there is a minimum price p. In what follows we first make the case for this flexible market in a world full of Angels (I). Then we shall get our hands dirty to see how this could work when we replace divine entities by humans (II). We shall then conclude with some reflections concerning its feasibility (III).

The unlikely revolution of flexible prices

If men were Angels...

I. If men were Angels... Here we study what would occur if we introduced our market set in a place where all consumers would follow the “rules of the game”. We call them Angels and to clarify our explanation we should take a concrete example: themarket for medical drugs. We assume there is no insurance contracts nor government intervention. The producer, perhaps because he has the patent on its drug, is considered to be a monopolist facing constant marginal costs. The supply and demand diagramlooks as seen on the right.

Economics

Let’s now compare in terms of social surplus the classical setting and our flexible price alternative. In the mainstream case with fixed prices, the monopolist decides to restrict production which will cease once marginal revenue equals marginal cost. Here the price is p* and the quantity produced Q*, so that consumer surplus is given by a and producer surplus by b. Now, if we introduce a flexible price forthose whose willingness to pay is between p* and p, knowing that Angels will behave as such, the production increases until it reaches Q. Then

producer surplus is b + c while consumer surplus remains the same. Therefore social surplus in our market set offsets the traditional one by c. One might criticise that all gain goes to producers and that consumers are not made better off. We have two answers tosuch an objection. First, we could easily change the rules of the game so that consumers would also benefit from flexible prices. For example, we could ask them to pay as much as they would be willing to minus fifty cents, if their willingness to pay was between p* and

p plus fifty cents. As we are dealing with Angels, no one should worry about them not following this rule. Second, what we call willingness to pay does notalways reflect how important it is for theconsumer to get the product, as it is constrained by the ability to pay. In our case, a consumer can be terribly ill but be too poor to pay p* for the drug she needs, her total wealth is just below the drug’s cost. Allowing flexible prices could help those who cannot access the drug even if they cannot possibly be willing to give more for it.

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II. If enough men were almost Angels…

Now, the reader is surely well aware that Angels’ behaviour is unlikely to reproduce itself in the real world. This is not only a matter of imperfect honesty as it also reflects the difficulty of assessing one’s own willingness to pay for a certain good. Nonetheless, if enough men follow the rules or a majority deviates from them but only a little, the monopolist in our example would still be willing to offer a range of possible pricesfor its drug rather than a single fixed price. To illustrate our case, imagine that there are two types of consumers: those rigorously following the rules and those who pay as little as possible. In the diagram above, it is shown that if the gain from new customers, y, is at least as larger as the loss caused dishonest buyers, x, the producer would prefer flexible prices rather than fixed. Even more, if the same drug was provided by a not-for-profit entity, i.e. a state-own firm, it could still use flexible prices to enable the consumption of those who are cannot afford to pay the marginal cost of the good.

III. An unlikely happy ending The idea of offering flexible prices is attractive in at least three dimensions. First, it has the potential to eliminate market inefficiencies derived from firms’ market power. Second, it allows relatively poor individuals to increase their consumption, especially concerning basic goods or drugs. Third, some might find an ethical appeal in trusting consumers to set a “fair price”. However, we remain rather sceptical towards the idea, though we would be glad to see it tested. At least three analogue obstacles threaten the system of flexible prices. The most evident one is that the moral argumentof being “fair” might not be enough to make consumerspay as much as if prices were fixed. After all, ensuring a monopolist’s profits or the sustainability of a state-owned company is not, at first glance, the most noble cause one may follow. Then there is the challenge of assessing one’s willingness to pay. Behavioural economists have repeatedly shown that this is far from easy and that phenomena such as anchoring and herding play a central role in our decision-making process. Finally, flexible prices wouldprobably increase corruption and dishonest behaviour from the sellers who could keep some of the revenue from themselves, faking how much buyers really spent.

Pablo Pena Corrales

Economics

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Frank Witte, the departmental tutor of the Economics department, sits down with us at the round conference table in his office in Drayton house for our chat. He talks briefly about his plans for the summer before moving on to his background. Frank started studying in 1987 at Utrecht university in the Netherlands. After his Msc in astrophysics, he decided to change route with a PhD in theoretical physics at the University of Heidelberg. Since then he

has worked for three different institutions before coming to UCL. “I came back to theNetherlands in 1997 and started working for Utrecht university as a lecturer. I did a Sabbatical year in Cambridge in 2002 and something similar but for 6 months at Imperial college here [in London] in 2009.” During his time at Imperial College, Frank was offered a full-time position at the UCLEconomics department. He explains how

there were two major factors that affected his decision. “I realised that this package - in the sense of being able to change to economics at a good place - was the kind of offer that wouldn’t come around too often. (…) And the second thing was that I really loved teaching and still do that. And I enjoy the variation the role of the departmental tutor has, which touches on pastoral care issues as well as lots of academic issues.”

University Life Frank Witte Meet the Department

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When he arrived at UCL, the then head of department asked him to choose a course to teach. Frank tells us about how he drew on his previous experience at Heidelberg University when making this decision. He had a PhD adviser that used to have Friday teas with him and his colleagues where theywould discuss different areas of physics often not related to their research. “What hewould always do - I admired that a lot – wasto say - when a subject came back a couple of times and he got really interested in it - that ‘actually I don’t know very much about that subject - maybe I should teach a course about that next year’. The first time he said that I thought it was a bit strange, but as I have been teaching more myself I’ve startedto realise more and more how much you learn by teaching something.” Building on his interest in the area of philosophy of science, Frank decided to picksomething similar for his course. “Economics of science is fairly related to that [philosophy of science] when you take alook at questions such as ‘what are the incentives to do research’ and ‘what is it thatthese people are trading when they go on conferences to exchange ideas’.” The economics of science course is available for both second and third year students on the economics undergraduate programme and has been a success over the past years.

Frank is now turning his lecture notes into a text book that is supposed to be finished thisSeptember. “When I was teaching that module for the first time I talked to a coupleof physicists who worked for a publishing house and they got quite interested. So whenI was teaching it the second time they asked if I had any notes that were publishable or that could be turned into a book.” We mention that from an outside perspectiveone might wonder how it is possible to combine economics and physics. Frank responds with explaining how physicists aretrained to look for universal behavior, in other words patterns that repeat themselves, when investigating certain areas. Economic cycles are thus objects of interest for econophysicists. “One reason why econophysisists tend to be attracted to bubbles is because - although there may be lots of different reasons to why a bubble deflates - the blow-up phases always look remarkably similar.” He moves on talking about how he sometimes joke about econophysicists beingpartly responsible for the financial crisis seen in 2008. “The financial industry hired alot of applied mathematicians and physicistsover the two-three decades before the crash,” he says and continues: “I think they sometimes applied too much formalism and

gave too little thought to what was actually going on.” During his past four years working at UCL, Frank has noticed several challenges that faces the department for Economics and the university in the future. Apart from the problem with the growing number of intakes, he mentions how exam halls in London are becoming more expensive for each year that passes. “Year after year it becomes more frequent that Kings, UCL and Imperial have their exams at the same time and so are competing for the same spaces, driving up the prices,” he explains. “I think the way that UCL and other universities organise their exams is slowly but surely reaching a situation where they have to start thinking about doing it completely differently.” Frank realises the difficulties with finding a solution to this problem in the near future. From his years working for several differentinstitutions there is one thing he has learnt: “Institutions don’t change too quickly.” He tells us an anecdote about how he and his colleagues set up an Arts and Science college within Utrecht university in 1998.

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“[We had] always sort of considered that asa day dream.” he explains and continues: “And then in 1998, suddenly the opportunity came round. The board of the university was for some obscure reason in favour of the project and (…) there was a local piece of real-estate available which the defense ministry wanted to sell off. And in that year the university just happened to have a rather favorable [economic] situation.” According to Frank,the main reason why the project succeeded was luck in the sense that they had the right group of people available at the right time. We move on asking him about what he thinks are the greatest challenges for students these days and whether he has anyspecific advice to give to the new first years. “What I would sort of single out as the biggest challenge for a student is to get the right perspective on life.” he answers. “I think there are lots of influences from groups telling us how to live our lives and what is a good thing to do and what is a bad thing to do.(…) And I think that in many cases that are coming not so much from people who know but from people who themselves are battling their own uncertainties.” Frank explains how he thinks students should accept they have limited foresight of the future and instead focus on what they find interesting here and now.

He also emphasises that it is important for students to take every opportunity to develop their “set of tools”. “Things can happen and things will happen in anybody’s life.” he says and continues: “And when something dramatic happens - if that is in a personal relation context or ina life or death con-text whatever - you needto have the ability to work with the tools you’ve got rather than to focus on the things that you haven’t got. I think the best thing to do is to accept the uncertainties and say to yourself ‘the most important thing is that I can swim and as soon as I can swim I can start thinking about where I’m going to Swim’.” Our eyes sweep over Frank's office. Next to the computer we spot an empty coffee mug with a Darth Vader motive. Frank happens to be a fan of Star Wars andthis interest is something that has followed him throughout his life. “It’s always surprised me a little bit how deep it goes soI would almost say it’s beyond the geeky. And I would worry about that if it wasn’t for the case that I know I’m definitely not the only one”, he laughs and continues: “If I would have to give a description of it I would say I think narrative stories that we tell about the world are important for everyone. And I think the stories that we enjoy most about how the world works also have profound impacts on how we make our decisions in life.”

University Life

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It becomes clear to us that this interest has played an important part of Frank’s life. He comes back to the idea mentioned earlier - that at any moment in life one should do what he or she findsinteresting and work with the tools available - and explains how he finds this a statement that could have come from Yoda. “And does that mean that that’s where I get my insight?” he asks rhetorically. “No, I don’t think so but it resonates with something that I have discovered for myself as well.” Frank moves on talking about how much he has enjoyed sharing this interest with his two daughters. Each Saturday during five years they used to start the morning by watching a 20 minute episode of the TV show ‘the Clone Wars’. “That really becomes part of your life then.” he says. “I fully understand people who have nothing with this but who have something else. I just wish everyone had something like that that accompanies them throughout their lives.”

Nils Larsson

It is a Monday in the beginning of June when we arrive at Drayton house for our interview with Viv Crockford, the Bsc programme administrator at the department of Economics. The silence thathas spread in the student areas of the department with the end of the exam season has not yet arrived to the offices, with the faculty working hard to mark exam scripts and prepare for the final weeks of term. Viv Crockford, who by some has been described as the “mother of the undergraduate students”, is one of the mostexperienced members of staff within the department of Economics. Celebrating her 20 year anniversary at UCL in the week of our interview, she has over the years seen the department evolve to being one of the

largest at the university. “When I first start-ed, the intake was about 80 or 90 students for the first year and now it is pretty much three times that much, so it has really grown,” she says. This has involved changes in her responsibilities. Originally, she was in charge of almost everything on the undergraduate side, but as the number of students increased she got too much on her hands. “It got more than one person could manage,” she laughs. “So over the years we have had permission to get more people to help and I guess I have evolved into managing the programme.” Although there have been large increases in the number of intakes over the years, Viv believes the department has reached a peak. “The difficulty with getting more students is that you need the infrastructure (…) and we’re just about at the maximum

capacity - with the joint degrees included - of the largest lecture theaters.” Having grown up in South East London, it is not surprising to find that Viv decided topick a smaller town for her university studies. “I picked somewhere deliberately far away.” she says. “I also wanted it to be in a town that was big, but not as big as London. So in the end I picked Hull.” She enjoyed her time studying mathematics forthree years, although she admits it was a difficult subject. “It’s one of those subjects that if you don’t get one stage you can’t move on to the next one. I have sympathy for Economics students here who struggle with the maths – but it is satisfying once you master it.”

Viv Crockford

University Life

Meet the Department

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After graduation she started working for City & East London college. “I didn’t know what I wanted to do particularly,” sheexplains. “I found it really enjoyable working with students, so I pretty much kept on working in education.” At the time,she played bass guitar in a band and in order to have as much time as possible to tour the country, she decided to quit her job. “It was the time it was taking up - it was difficult to have a job as well. So I started working for one of the guys that manufactured one of our singles.” She had a really good time but thought after a whilethat it was time to move on to do other things. “It was fun but there was no money to made from it. I mean all the money we did earn went straight back into keeping thetransit van on the road”, she says. Viv saw an advert for the position of senior secretary at the department of Economics and decided to apply. “One thing that reallystruck me when I came for my interview was that I felt very welcomed and I thought: ‘this is a really nice place - I couldenjoy working here’.” It is clear from our interview that Viv has a great interest in music. Although she quit her band when she started working at UCL,she was recently convinced by her husbandto start a new one. “My husband brought me out of retirement,” she says. “ He never stopped playing and he decided I needed toresume, albeit on a different instrument [keyboard now]. It’s a hobby so we try and play a few gigs. We didn’t play much last year but this year we’ve probably been playing on average about a gig a month, maybe two sometimes.” However, this timethey try to concentrate on playing outside England, and in particular London, when planning their performances. “It’s not very good playing in London. It’s too many bands, not that many venues.” She continues: “But if you play in Europe you get treated a lot better, they’re more welcoming to you.” On the question if theyplay the same type of 80s music she playedbefore, she answers: “It’s probably more ofa 60s feel I guess.”

“Well I must do - I’ve been here for so many years - and I do, I really do like my job.” Another side of Viv is revealed when we ask whether she would prefer McDonald’s to Burger King. “I would never touch either” she says and continues with explaining that she is not very fond of fast food outlets. “There’s a good book written on the subject of burgers that focuses on McDonalds and the working conditions of the beef industry, including exploitation of land to feed all the animals they need for producing their burgers – Fast Food Nationby Eric Schlosser – I recommend everyone to read it.” She moves on with saying: “I think it just isn’t food, they way it’s manufactured. So that goes for all places really that manufacture burgers in that way.” On the comment that she seems quiteinterested in the area of sustainability she responds: “Yeah exactly, I mean, the demand for meat worldwide is quite damaging to the world as a whole. People don’t need to eat that much meat. I’m not a vegetarian - I do eat meat - but not much. This may stem from some sort of health conscious point of view that the more organic food you have, the better it is for you. Anything in it’s most natural, raw state. So that goes for most vegetables,

and it definitely doesn’t go for processed meat.” Having worked at the university since 1994, Viv has seen many students come and go at the Economics department. Over the years, she has observed one particular change in their behaviour. “I’d say that if there is one thing I’ve noticed it’s that they are not quite as confident,” she says. “I don’t know why because I think it’s a bit misplaced. I think it stems from the schooling - it’s competitive, it’s geared solely towards passing exams, and it’s difficult - and when students are here they think everyone is competing against each other.” She also emphasises that she thinks it is no point stressing out about getting an internship or a job immediately after graduation. Instead she would recommend students to focus on their studies here and now at university. “I know what it’s like at that age. You need to get a job and that is it.But you have a lifetime of work ahead of you, and with a degree from UCL and the department of Economics, whether it’s a first, a third or an ordinary degree - you arestill going to get a job eventually.” Viv herself says that one of the best parts ofher job is that she gets to see students develop and grow throughout their time at the department. On the question whether she likes her job, she responds happily: “Well I must do - I’ve been here for so many years - and I do, I really do like my job.”

Nils Larsson

University Life

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Christian Spielmann meets us in his office in Drayton house for our one-hour chat. The teaching fellow asks a few brief questions regarding the Drayton Tribune before we move on to the interview. Having grown up in Bad Wimpfen, a smalltown with around 7000 inhabitants in south-western Germany, Christian decided to go to a larger place for his university studies. Building on his childhood interest in music, he started studying at a conservatoire in Luebeck. “It was mainly aclassical music education.” he explains and moves on talking about how his initial idea was to pursue a career within music. After some time, Christian wanted to do something else in his life and decided to switch to an economics course at Hamburguniversity. “As a child and as a teenager I had [music] lessons at conservatoires whileI was still at school so it required a very big focus. So then you ask these questions

whether that really is the right thing and maybe you feel that you have to try something else in your life.” We have a look around his office. Christian’s interest in music can easily be spotted. There are two posters from the Royal Opera House on the wall next to the bookshelf. He tells us about how he works with a chamber choir and plays the piano in his spare time. He also enjoys listening to music, although he does not only stick to the classical genre. “I listen to lots of otherthings.” he says. “Older stuff but also modern stuff. I also like what Britain has to offer in terms of more independent music. So I’m quite open there.” Examplesinclude the American band Beirut, London Grammar and Portishead from the UK or Daft Punk from France.

Christian also enjoys spending time outdoors and he goes skiing at least once every year. “It’s my winter treat.” he says and continues: “I love the mountains and I also like walking, hiking - just being outside.” With this interest, it is not surprising Christian decided to continue his studies inSt Andrews after two years in Hamburg. “At that time we had something like an intermediate diploma in Germany.” he says. “So I transferred after that to Scotland.” He moves on talking about howmuch he enjoyed staying there. From what he has seen, there are few economics departments in the world as perfectly located as the one in St Andrews. “You hadthis old building directly at the cliffs so when you sat in your lecture rooms you saw the sea splashing against the rocks. So I wonder how I actually learnt something.”

Christian Spielmann Meet the Department

University Life

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After two years in Scotland, Christian went to UCL for his master’s degree and later to Birkbeck College to do his PhD. It was at that time he started to develop an interest in teaching. “During my PhD at Birkbeck I taught a lot and in my second or third year I was asked whether I would take over a lecture. Usually you have PhD students doing tutorials but not full lectures (…) so I thought that would be a good opportunity.” At this time Christian was also a teaching assistant at UCL for one year. “That was just before Igot hired.” he says. “There was this job opportunity and I applied and that’s the story.” A large part of Christian’s job involves teaching. He is responsible for four lectures and several smaller tutorial groups. Amongst the undergraduate students, he is well known for teaching the macro part of the introductory moduleto economics in the first year. “I think it’sa great course.” he says. "I like teaching first years - it’s interesting, it’s the start. I think that as a student, if you start something new, the beginning is quite crucial (…) so I find that very exciting teaching these basic views how economists actually see the world.” He tells us about how he himself did not feelvery confident with the subject at the beginning of his undergraduate degree.

“I think in my first year I often didn’t see the relation to the real world.” he explains. “I didn’t quite get the idea of a model and what’s good about modeling the world and what the potential dangers of doing that are.” One of the first things taught in the introductory module is how one should be cautious when using economic models to understand the real world. We ask whether Christian’s own experience has influenced the structure ofthe course. “It’s my experience but it is also [the fact] that I feel that there is a lot of misunderstanding going on. Not just around students but also in the public when you read newspapers and see how they analyse certain research.” he replies. “I also think it’s good to set the ground rules. You better say it from the start how we [as economists] approach the world.” Other than teaching, research takes up a large part of Christian’s working hours. One of his interests involves labour market policies and he wrote a paper on wage subsidies in an open economy in 2012. “Very often this discussion [on wage subsidies] stays within the domain of a country.” he says and continues: “I’mjust asking the other question: ‘can we use some economic modeling to say whathappens if we live in an open economy where we trade with others?’ (…) Then I look at what would happen if policies

were coordinated for example on the European level.” Christian moves on telling us about his profound interest in Europe and the more connected world we live in. It is no secretthat the European Union has problems at the moment with countries, including the UK, wanting to bring back powers to their own national governments. “Maybe some countries started the project with ideas that neglected some challenges that come up now. And now is the time to fix that.” he says. “It’s interesting how on theone hand globalisation has made us more connected in our everyday life and at the same time countries increasingly start thinking about their own identity. It would be interesting to understand how these two phenomena are related. These are all exciting ques-tions which really affect us in how we live our lives.” On the question what he thinks about the current political situation in Europe, Christan responds: “I’m very pro-European and I would hope many people see how important thisproject is.”

Nils Larsson

University Life

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This section of the issue will focus oncareers within the EU, trying to give the reader a clear understanding of what it would be like working for the institution. The series will include fourarticles, with the first one outlining thereasons for working for the EU as well as the general application systems through the European Personnel Selection Office (EPSO). Moving on, the following three articles will focus on the EU Commission, the Eurostat and the European Central Bank respectively, outlining the institutions’ different responsibilities and what types of positions that may be available. There will also be a fifth article available on our website focusing on the European Investment Bank.

Academic Careers EU Careers - Introduction

EU Careers The European Union is an important institution on the world arena today – it has grown to be one of the most influentialsupranational bodies after its foundation more than 50 years ago. For people who are never satisfied with the status quo, having a career within the EU would solve the problem. Distinct from any institution in the world, the EU stands out as the integration of 28 member states, each with their own cultures and languages. This is where one can build his/her career by enjoying the incredible scope and scale of the EU. More importantly, the EU Institutions are knownfor their numerous different working areas,meaning one can always draw on his/her knowledge and skills regardless of area of expertise. To be more specific, one may for example “work with drafting policies and implementing EU law, managing projects, developing communication strategies, and providing legal advice.” A prospective applicant is expected to have strong analytical, organisational and communication skills in a variety of environments. Whilst a strong academic record is essential, languages and extracurricular activities are also importantas they demonstrate both ambition and capability. Apart from career development, one can also benefit from learning European languages. The EU offers language courses in the 24 official languages.

This is useful, as the knowledge of a third language in most cases is a pivotal composition of one’s first promotion. Working in Brussels or Luxembourg, one can virtually feel the pulse of Europe. Here, one will enjoy the benefits of an excellent geographical location and efficient training, but also longer-term welfare schemes in terms of a comprehensive remuneration package including taxation, healthcare and pension schemes.

The EPSO The European Personnel Selection Office (EPSO) selects and recruits eligible applicants for positions at most of the EU institutions. These include the European Parliament, the Council, the European Commission, the Court of Justice, the Court of Auditors, the European External Action Service, the Economic and Social Committee, the Committee of the Regions,the European Data Protection Supervisor and the European Ombudsman. In other words, the only two exceptions are the European Central Bank (ECB) and the European Investment Bank (EIB). Hence, it is pivotal to realise that the majority of the EU institutions follow the same protocols with similar minimum requirements for applicants.

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In general, one can apply for permanent, fixed term or temporary contracts. Normally, the applications for the permanent and fixed term positions are assessed by EPSO, whilst applicants for thetemporary ones are evaluated by the specific EU institutions. For an undergraduate student traineeships may be an interesting option. The recruitment processes for these are also run by the individual EU institution one applies to or an external agency. For permanent contracts, applicants will need to go through open competitions, which consist of several different tests and assessments of all kinds. It generally takes 5-9 months to complete this selection procedure. After one passes the first stage, he will be placed on a reserve list, which is

valid for at least one year. This means the purpose of competitions is not to fill specific posts, but to constitute a ‘pool’ for recruitment needs as they arise. There are two stages of the open competition process: Admission This initial round determines which applicants are admitted to the assessment phase. It is done either by computer-based testing and/or by evaluating the applicants through their CVs (in specialist competitions). The common tests examine applicants’ verbal, numerical and abstract skills in the first language, as well as their situational judgment skills in their second one. Assessment

Assessment At the assessment stage, a range of exercises is used to evaluate the candidates.Constituting of case studies, verbal presentations and interviews, the stage is similar to any other general assessment stage known to students. Fixed-term contracts (CAST) selection doesnot have an assessment centre stage, however, the process is the same as that of the admission stage of an open competition process. Unlike the two mentioned above, temporarycontracts and traineeships selection and recruitment are run by individual EU institutions and agencies.

Jasmine Kang

This section of the introductory article shall list examples of the different areas and positions a potential applicant could work with. These job profiles are: policy officer for the European Public Administration, lawyer, economist, statistician, translator, conference interpreter, auditor, communication officer,ICT staff for information technology, secretary, policy officer for external relations, and financial manager. The exact tasks of the specific positions will obviously vary depending on which institution one works for. A brief introduction of the functional areas, however, should provide one with an understanding and possibly interest for the particular areas. The following paragraph will talk about the responsibilities and application

requirements for a couple of positions, including the positions of financial manag-er, policy officer for external relations and economists. Financial manager As a financial manager, one usually participates in a variety of demanding financial tasks, some of which include dealing with budget procedures, preparing annual reports, and assisting with audits inspections. Commonly, applicants are expected to speak at least two European languages fluently, one of which must be English, French or German, have an appropriate degree and some relevant experience. Policy officer – external relations As an external relations officer, one’s job is to represent the EU abroad and when

working with multilateral organisations, maintain diplomatic relations with countries, and work on developing the EU’s foreign, security and defense policies. Economist An economist supports sustainable development in Europe, mainly within areas such as financial institutions and markets and trade. The job also involves working on structural reforms policies related to the euro. Christine, one of the economists at the Commission, once said: "Working for an international organisation allowed me to move into more international macro-economics. The Commission was particularly attractive because the work here has a direct impact."

Academic Careers

The different areas

How to apply

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The second article presents one of the most important institutions within the EU – the European Commission. First, the article explains the institution’s fundamental objectives and missions. Later, we will view the operation of it along with the careers offed at each stage. The European Commission represents the interests of the EU as a whole. To achieve that, it has the following four functions: ü  To propose legislation to the Parliament

and the Council ü  To manage and implement EU policies

and the budget

ü  To enforce European law (jointly with the Court of Justice); and

ü  To represent the European Union on theinternational stage

Although the Commission has the right (of initiative) to propose laws, it also assesses the impact of a given piece of legislation act. The principles of subsidiarity and proportionality states that the EU may legislate only where actions is more effective at EU level than at national, regional or local level and no more than necessary to attain the agreed objectives. This sets as one outstanding feature of the

EU institutions: they will strive for the most straightforward and efficient solutionsFor instance, the Eurostat, a Directorate- General of the European Commission that provides statistical information to the institutions of the EU, will adopt a new methodology in data collection so as to simplify the entire process by reducing the stages involved.

The European Commission EU Careers

The organisation of the Commission Nowadays, the European Union and hence the Commission deals with all kinds of issues from trade and economic ones to those of most relevance to citizens’ wellbeing, including their rights, security, justice, the creation of employment and environmental issues. The Commission consists of departments and services. The departments, known as Directorates-Generals (DGs), are classified according to the particular policy areas they are involved in. Examples of these departments are Budget, Economic and Financial Affairs, Eurostat, Competition, Employment and Taxation. The term 'Commission' refers to both the 'College’ of Commissioners and to the civil services below them. A total of 28 commissioners, one from each EU country, form the Commission's political leadership during their 5-year terms. Each of them is responsible for a Directorate-General and thus one policy area. The Commission services, on the other hand, are in charge of more general administrative matters or have specific instructions and missions, such as fighting fraud or creating statistics.

The Commission

Departments (DGs)

Services

Different policy areas

Administrative issues/ specific mandates

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Like most jobs in EU institutions, one will need to submit his/her application for the Commission via the European Personnel Selection Office (EPSO). Similarly, one can apply to be either a permanent staff ora temporary one. The ensuing part of the article will set out the duties of permanent and temporary staffs, including their respective classifications. Furthermore, as one of the top concerns, traineeships shall be discussed in more detail. Finally, an interview with a trainee will be used to explicitly outline the responsibilities involved when working as a trainee. Permanent staffs and temporary experience are the two types of employment offered within the Commission. The former type involves two categories: permanent officials and managements positions. Usually, the latter group is open to external applicants, whereas recruitment to management positions tends to be done internally. As a result, this section will focus more on the responsibilities of a permanent official rather than that of a managerial one, since the former is more applicable to universitystudents. Permanent officials fall into the following three categories: administrators, assistants and secretaries/clerks.

Administrator (AD) Being an administrator means taking responsibility in the department; one will actively participate in the legislative and budgetary processes. More precisely, thesetasks range from governing the annual budgetary procedure to addressing Europe’s aging population, from representing the EU in the court system of the WTO to designing policies so as to maintain financial stability. If one finds theconcept of administrator to still be somewhat confusing, one is suggested to refer to the more department-specified example of Eurostat in the next article. Assistant (AST) An assistant requires one’s engagement in internal management of the Commission, such as in budgetary and financial affairs, personnel work, computing or librarianship. Occasionally, assisting policy implementation will also be a part of ones work. Secretary/clerk A secretary’s main task is to ensure the smooth running of an administrative unit. Management positions include middle managers and senior managers. A prospective applicant is expected to be a specialist while having leadership qualities. Senior managers, as the name suggests,

are more experienced and report directly to the Commissioner responsible for the relevant policy area. However, the Commission only recruits external managements under rare circumstances. As for temporary experience, there are four possible types of employment available. While temporary and contract agents are mainly hired for non-standard, highly, specialised jobs or staff shortage, Seconded National Experts (SNEs) act as the bridge between nations/regions and theCommission by drawing on accumulated experience and knowledge. Traineeships are also worth to mention since these are opportunities offered to university graduates. Administrative and written translation “in-service training” arethe two options available, which involves doing the same job as administrators and translators respectively for five months. As an administrative trainee, the job wouldnormally be equivalent to that given to administrator officials at the very beginning, with responsibilities such as collecting information, editing documentation, organising events like public hearings and meetings and preparing reports. We have managed to interview Jesper who did a traineeship at the Commission a couple of years ago. Here we will share some of his experience as guidance.

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Employment in the European Commission

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Jesper lived in Denmark and studied Law atuniversity. With a Bachelor’s and a Master’s degree in Law, he went to King’s College London for another master’s degree with focus on competition law (LLM). There he met the professor who offered Jesper an opportunity to be a trainee in the Competition department of the European Commission. Jesper worked as an unpaid trainee as he was introduced to the department directly by his professor. Normally, if one wants a paid internship one needs to go through the selection process held by EPSO. DG Competition is concerned with the policy areas of antitrust, cartel, mergers andstate aid. The European Commission, together with the national competition authorities, directly enforces EU competition rules to make EU markets work better by ensuring that all companies compete equally and fairly on their merits. Consumers, businesses and the European economy are all beneficiaries thereupon. Based on the interview, we have verified that as a trainee, one does face the same

challenges as those of the permanent officials. Thus, being adaptive and professional to cope with new situations is of great importance - ‘keep yourself updated’ – as Jesper said. Furthermore, because the administrators comply with thegeneral instruction of commissioners, there were occasions where a trainee got the opportunity to join regular conferences. In particular, Jesper mentioned that the employees are virtually the best in their field - “The Commission wants to hire the prominent ones to work for the EU.” Henceit is reasonable that salaries and other benefits are fairly attractive. Being treated as a proper official, Jesper was adequately competent in pursuit of a career as a lawyerlater on. He said that working for the Commission enabled him to approach competition law from the other side. As a matter of fact, lawyers specialising in competition law are required to report to the Commission in advance of a merger and the officials shall ensure the markets would still be able to operate competitively if such an event occurred. The experience

to work as an official granted Jesper the chance to understand the dos and don’ts when he became a lawyer. Moreover, drawing on these five months of traineeship, he has built his own ‘resources’within the Commission. These experiences and relationships advantaged him greatly. The minor downside according to Jesper, however, was the ‘political’ environment, where strict rules of duty and manner would apply throughout all EU institutions. Indeed, Jesper has a strong academic background, and he also has a talent to make himself known to the professors. These two pivotal factors helped him stand out. It would be wise to learn from his experience: Do not underestimate the power of your professors, friends and families. These connections can be very valuable for you now or later on in your working life.

Jasmine Kang

Academic Careers

A traineeship interview

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The department’s responsibilities Eurostat’s main responsibility is not to collect data but to consolidate it andensure its comparability. Data collection is done at the national level in Member States by their statistical authorities. As one of the Directorates-General of the Commission, Eurostat is headedby a Director General and a Deputy Director General. Within the Eurostat, there are seven Directorates. Their respective responsibilities are:

ü  To ensure the cooperation within the European Statistical System and at the international level;

ü  To form common methodologies and provide corporate statistical and IT services;

ü  To produce statistics on national accounts, prices and other key Indicators. These indicators assist with the assessment of economic wellbeing of the European Union. Apart from the balance of payments position, they also provide the official measures of inflation for the Eurozone and the EU, namely the Harmonised Index of Consumer Prices (HICP), the House Price Index (HPI) and the official measures of price level comparisons across countries (Purchasing Power Parity, PPP);

ü  To produce government finance statistics (GFS). Government finance usually refers to debt, such as statistics related to excessive deficit procedure;

ü  To produce sectoral and regional statistics. ü  To produce social statistics. These data are more of a public interest as

they include statistics related to population size, labour market performance, quality of life and welfare protection; and

ü  To produce global business statistics.

The second article mentioned the various departments and services within the European Commission. Following the broad outline, the third piece will talk aboutEurostat, a Directorate-General of the EU Commission, outlining its main responsibilities, working methods and somedescriptions of what types of positions that are available. Eurostat is the statistical office of the European Union located in Luxembourg.

Its main role is to process and publish comparable statistical information at the European level. Such harmonised comparisons of statistics have two objectives. First, it enables decision-makersto adjust policy directions. Second, it gives the public an accurate picture of the societyso as to evaluate the performance of politicians both at the national and the European level. For example, to obtain an accurate picture of EU unemployment, it is

important that unemployed people in Finland or Portugal are counted and measured in the same way as in Ireland or Germany. Thus, the responsibility of Eurostat is to work with Member States to define common methodologies on how to gather unemployment data. This EU-wide data is then published by Eurostat and can be used to compare unemployment rates between countries.

The Eurostat EU Careers

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f

Starting from the data collection at the bottom, each National Statistical Institute m(NSI) of a Member State collects its own data concerning various domains. Such datais then processed and transmitted to the Eurostat altogether. At this stage, the Eurostat needs to comply the data based on the domain to which it belongs. Every ‘stovepipe’ corresponds to a specific domain of a statistic - the domains are independent of each other and the data sources for each domain are also isolated from others. One disadvantage of the current model is that the procedure is inefficient and costly. For instance, often

residents are being asked the same questions by data collecting agencies of various domains. This has pushed for changes in the statistical collection methods. Preferably, statistics shall be produced as “integrated parts of comprehensive production systems” (data warehouse approach) for clusters of statistics. This suggests that by creating a sound network of databases among Member States, merging data from all ranges of sources willbe feasible. Such methodology addresses the problem of the augmented stovepipe model, which exerts unnecessary burden on

respondents who need to provide the same information more than once. The new requirements for statistics also achieves optimal exploitation of statistical information, as the data can be reused for statistical purposes. In the future, databases can be extended to include regional level data. These systems would ensure efficient use of all available data sources that have the appropriate quality. Indeed, this new model would require highly capable staffs that are adaptive to the new statistical production system.

Positions available for applicants Usually, the job profiles open for applicant are permanent officials and temporary agents for positions such as statistical officers, economists, IT managers, assistants within the areas of statistics and economics, statistical database domain managers and secretaries. Students with statistical profiles are also potential applicants for Seconded National Experts (SNEs) to help with various affairs such as the assessment of the quality

of biannual deficits reported by countries. As SNEs are national or international civil servants who are working temporarily for the Commission, they help to improve the efficiency of the specific tasks by drawing on relevant experience. Each of the seven Directorates has its own demand for these specialists. The quality of life section at the office of Social Statistics, for instance, is looking for a dynamic SNE to work as a process officer for statistics related to income, poverty and social exclusion.

Meanwhile, the office of Price Statistics would like an expert to do tasks related to the coordination of PPP surveys, its calculations, the documentation of production processes and the quality control of PPPs. Such a post offers the chance to work closely with colleagues in national statistical offices, OECD, the World Bank and other Eurostat and Commission staffs.

Jasmine Kang

The production method of EU statistics Due to the fact that the personnel selection of the European Commission is done by EPSO, there is no detailed information about the specific responsibilities for each position. An overview of the current way of producingEuropean statistics, along with an outline of planned future changes of the European Statistical System (ESS), though, should be sufficient to imagine what kinds of tasks employees work with in a typical day at the department. It also implies what qualities the Eurostat wants to see from a prospective applicant. The current process which is illustrated in the diagram on the right is known as the augmented stovepipe model. A domain is the policy area with which the collection of the relevant data is concerned.

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Source: diagram from “Communication on the production method of EU statistics: a vision for the next decade”

The European Central Bank (ECB) will bethe second and final EU institution elaborated on the section. This article will start with an introduction of the Eurosystem and the ECB, outlining their duties and tasks, for the sake of thorough comprehension of how the central bank operates. Career opportunities are then discussed with examples of some currentlyavailable job profiles. The Eurosystem and the ECB The Eurosystem, as the monetary authorityof the euro area, is made up of the European Central Bank (ECB) and the national central banks (NCBs) of those Member States whose currency is the euro.Although similar in terms of functions, the

concept of the European System of CentralBanks (ESCB) shall not be confused with the Eurosystem, since the ESCB comprises the ECB and the NCBs of al l EU Member States whether they have adopted the euro or not. According to the Treaty on the Functioning of the European Union, “the primary objective of the European System of Central Banks shall be to maintain price stability”, in other words a low and stable inflation rate. Stable price levels enable people and businesses to recognise changes in relative prices, providing them with a higher confidence level in the economy. Therefore, price stability plays a pivotal role as it in theory should guarantee a favourable economic

environment with low unemployment. Unlike the Parliament and the Commission, the ECB is independent of any institution or authority. As the Treaty explains, this suggests that “when exercising the powers and carrying out the tasks and duties conferred upon them, neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Union institutions, bodies, offices or agencies from any government of a Member State or from any other body”. Hence it is not surprising to find that the ECB has its own personnel selection process and minimum standard requirements for job applicants.

The European Central Bank EU Careers

The responsibilities of the ECB and the Eurosystem There are four basic tasks to be carried out through the Eurosystem. First, the Eurosystem defines and implements the monetary policy for the euro area. The aim is to achieve an inflation rate of below, but close to, 2%, over the medium term. The second task is to conduct foreign exchange operations. Such operations are mainly reflected by interventions either by Member States’ central banks independently or by the European Central Bank alone. Foreign exchange operations can affect exchange rates and domestic liquidity conditions. One operation involves the sale of interest income derived from foreign reserve assets. The third duty of the Eurosystem is portfolio management which involves managing the euro area countries’ official foreign reserves. One purpose of having foreign reserves (the US dollar and Japanese yen reserves are top choices) is to ensure liquidity, where these reserves act as a ‘buffer’ in case of large foreign exchange movements. Foreign exchange operations, as mentioned above, will be adopted as a tool to guarantee sufficient liquidity when necessary. The system’s last basic task is to promote the sound operation of its payment systems, which involves ensuring the provision, supervision and improvements of the relevant payment and settlement facilities. The responsibilities of the ECB involve some further tasks including being the exclusive issuer of banknotes within the euro area as well as being responsible for the collection of statistical information and the maintenance of financial stability.

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Fixed-term Contracts 1-5 years

Short-term Contracts

Less than 1 year

Fixed-term Convertible

Possible to be converted to an unlimited contract

Fixed-term Non-Convertible

Specific time-limited organizational need / absence of staff

Academic Careers

The kinds of experiences available at the ECB Despite the fact that the selection process is different for the ECB compared to most other EU institutions that use the EPSO, the broad types of contracts are similar. In general, either fixed-term contracts or short-term contracts will be offered depending on the career nature and length of employment. Because of the similarity of the types of contracts offered by the different EU institutions, this article will focus more on the functional areas of specific positions which are concerned with the tasks and responsibilities of the ECB. On the ECB website, the vacancies are classified according to their relative functional areas such as monetary policy, economics and financial stability. Traineeships and graduate programmes, in the meantime, will be described with an example of a particular job profile. This article will use three distinct job profiles to illustrate careers within the ECB. [Economist - functional area: Economics] This position is one of the typical central banking roles that is frequently being advertised by the ECB recruitment team. Although the economists working at the institution have similar duties such as policy analysis and forecast, the exact responsibility will vary depending on which policy area one works with. The ECB does not provide any specific information about the general responsibilities of an economist, however, the use of an example should provide a

picture of the basic tasks one would expect to work with. The Convergence and Competitiveness Division of the Directorate Economic Developments is looking for an economistwho will be responsible with key affairs regarding competitiveness. The division isin charge of policy-oriented and relative analysis of the competitiveness of and between EU Member States. In particular, the economist is expected to analyse variables such as cost and price competitiveness of EU countries by adopting both macro and micro evidence. Policy assessments and recommendations on issues relating to imbalances, vulnerabilities and competitiveness are also part of the duty. Being responsible for key affairs regarding competitiveness, a desirable applicant should be experienced and academically strong with at least a master’s degree in economics. Ability to integrate macroeconomic, fiscal, financial and structural policy issues is also necessary. [Director General - functional area: Macroprudential Policy and Financial Stability] The second job profile is an example of a Director General position responsible for macroprudential policy and financial stability (DG/MF department). A Director General plays a senior role in the ECB. The DG/MF consists of four divisions which together provide analysis and policy advice on issues regarding “financial stability, macro-prudential policies, financial regulation and supervision and financial stability arrangements”. Overall, potential sources’ systematic risks are identified using all kinds of quantitative tools which deal withstatistics. The applicant may also be assigned with other tasks such as project team management and liaison. The minimum academic requirement is also a master’s degree in economics, finance or something alike. However, this position also requires management qualities, extensive knowledge and experience of working (approximately

10 years) for a policy-making authority. Traineeships for graduates and PhDlevel students - functional area: Economics Economics Students who wish to apply fortraineeships should apply to vacancies via the ECB website directly. Conditions of admission require trainees to be nationals of a Member State of the Union or of an acceding State, a country whose accessionnegotiations have started, as well as enrolled in postgraduate studies. Duration of the traineeship may vary from three to six to twelve consecutive months indeterminately. Traineeships enable students to acquire practical experience of the ECB daily operations as well as allowing them to work with some of the basic tasks. Graduate programmes of the European Central Bank differ slightly from traineeships in the way that appointments (employment durations) must be for two consecutive years with a one-year extendable limit. A recent job vacancy in the field of economics should help with the understanding of the programmes. Currently, the Monetary Policy Strategy Division is seeking applications from recent graduates for traineeships within itsPolicy Assessment Section. Trainees will be directly exposed to the two major areas of tasks of the Division regarding monetary policy analysis or non-standard measures assessment. By working closely with the Division’s economists, the trainees can have the opportunity to make contributions while accumulating a wide range of knowledge.

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