Country X has a flexible exchange rate system and open capital flows. Last year GDP decreased 8% due to the Covid-19 pandemic. Growth was better than expected thanks to the fiscal stimulus implemented by the government last March. It was among the largest for G20 countries and raised the primary fiscal deficit to 12 percent of GDP.
The government’s next steps will be decisive for the direction of the country this year. Pundits claim that a tough fiscal restraint is needed. Country X has to pay more than USD 150 billion of public debt only in the first semester of 2021. Thus, a fiscal adjustment is essential.
Assume that political hurdles impede the necessary fiscal adjustment in 2021. In this case, what would you expect to happen with the following variables in X. Explain clearly:
(i) The exchange rate of the real vs. the US dollar
(ii) Current account balance.
(iii) Inflation rate.
(iv) Foreign debt over GDP.
may be based on the Kelsenian and American models, however, all are subject to the unique political tensions of their jurisdictions. In fact, the constitutional settings of continental European countries differ so significantly, that their raison d’être range from constitutional rights protection in Germany, to monitoring devolutionary powers in Spain and balancing governmental powers in France. Under current procedures, the UKSC exhibits too many fundamental differences to its European counterparts to be termed a CC; specifically, it lacks independence from the judicial branch to act as broker of conflicts between the branches (French raison d’être) and the ability to enforce the constitution against unconstitutional legislation (German raison d’être). Yet, its similarities – constitutional statutes, ECHR application, devolved competences and application of EU law – can be deemed sufficient to allow for a detailed comparison with the European CCs in order to bring to the fore areas of reform. 1) Aspects of the UKSC layout that should be reformed, based on comparative experience Judicial appointments: election procedures; background of judges; tenure Whilst UKSC justices are subject to less politically charged selection procedures then some of its European counterparts, the nominations from the JAC have been criticised for being overtly introverted and impervious to the public sentiment. Although the objectives of the CRA, Schedule 14, signal a move towards greater separation of powers as well as selection based purely on merit and not political bias, for the UKSC to permissibly defend peoples’ basic rights against Parliament, the bench must itself have democratic legitimacy, typically achieved through appointment by elected officials or after bargaining among political parties. To prevent the SC from becoming a political tool to advance governmental objectives and “behave (…) as partisans and not as judges”, Stone suggests that the party in power should be denied a veto, justices instead being approved by a majority ruling in both houses of Parliament – this procedure is currently successfully practiced in Poland and Germany. CCs abroad typically appoint a combination of politicians, academics and ordinary judges to establish a more democratic and specialised outlook on politically and constitutionally sensitive issues. There has been some support that a reformed UKSC should also echo such a diversity in backgrounds, not le>GET ANSWER