Jane Kelly, Julia Le Blanc, Reamonn Lydon, (2018), “Pockets of risk in European housing markets”, VoxEU, 25 Νοεμβρίου Loan-to-value limits and other borrower-based macroprudential measures are now used in two-thirds of advanced economies. This column uses survey data to document changes in credit standards in a cross-section of countries in the run-up to, and aftermath of, the financial crisis. There is clear evidence of laxer credit standards in countries that …Read More

Ferdinando Giugliano, (2018), “Italy’s Populists Aren’t the Only Ones to Blame”, Bloomberg Opinion, 26 Νοεμβρίου Italy was allowed to join the euro in May 1998 even though its public debt stood just below 120 per cent of gross domestic product. The so-called “Maastrich criteria” – which EU members must meet to enter the single currency – stated that government debt shouldn’t exceed 60 per cent of GDP. Failing that, the ratio should …Read More

Maria Snegovaya, (2018), “When left-leaning parties support austerity, their voters start to embrace the far right”, Washington Post, 20 Νοεμβρίου Recently, former White House adviser Anthony Scaramucci declared that President Trump is a “blue-collar president” — which some observers find curious, given his wealthy upbringing and boasts about being a billionaire. And in Sweden’s general election in September, the far-right Sweden Democrats finished in third place with 18 percent of the …Read More

Gregory Claeys, Maria Demertzis and Jan Mazzaa, (2018), “Monetary policy framework for the European Central Bank to deal with uncertainty”, Bruegel, 22 Νοεμβρίου Central banks face new challenges. First, the potential long-term decline in neutral rates of interest in advanced economies could reduce the space for central banks to make policy-rate cuts. Second, the potential flattening of the Phillips curve (i.e. the weakening of the relationship between inflation and unemployment) in recent …Read More

Olivier Blanchard, Álvaro Leandro, Silvia Merler and Jeromin Zettelmeyer, (2018), “Impact of Italy’s Draft Budget on Growth and Fiscal Solvency”, Peterson Institute for International Economics, Policy Brief 18-24, Νοέμβριος A bitter standoff is under way between Italy’s new government and the European Commission over the Commission’s objections to Italy’s proposed expansionary budget for 2019. In this Policy Brief, the authors look at the merits of fiscal expansion, concluding that Italy’s …Read More

Nikos Chrysoloras and Viktoria Dendrinou, (2018), “Euro Area Paves the Way for Easier Sovereign Debt Restructurings”, Bloomberg, 19 Νοεμβρίου A proposal to simplify euro-area sovereign debt restructurings has gained broad support among members of the common currency, Portuguese Finance Minister Mario Centeno said, as governments move to bolster its tools after the last credit crisis nearly tore the 19-nation bloc apart. The plan envisages strengthening collective action clauses, which have been mandatory …Read More

Melvyn Krauss, (2018), “The ECB should extend its bond-buying programme”, Financial Times, 18 Νοεμβρίου The European Central Bank is signalling that it intends to end its €2.5tn quantitative easing programme next month. Mario Draghi, ECB president, made that clear at the bank’s monthly meeting in October. Yet the recent eurozone growth numbers were the weakest since 2014. The danger for the ECB is that it will have to start QE up again …Read More

Branko Milanovic, (2018), “Migration Into Europe: A Long-Term Solution?”, Social Europe, 19 Νοεμβρίου Thus, Europe faces a long-term issue and the following dilemma. As we just saw, if there is globalization and countries involved in globalization have highly uneven incomes, there must be migration. You can stop migration only if you give up on globalization by closing off national borders, or help emitting countries get as rich as Western Europe. The …Read More

Corrado Macchiarelli, (2018), “Tackling the free rider problem in the EMU does not have to be a zero-sum game: Italy’s budget deficit case”, LSE EUROPP blog, 20 Νοεμβρίου The biggest weakness in the bloc is now politics and the current approach to the Italian crisis is not going to help the popularity of either the EU or the single currency. As many have underlined, democratic expectations cannot be set at …Read More

Silvia Merler, (2018), “The Brexit withdrawal agreement”, Bruegel, 19 Νοεμβρίου On November 14th the UK government cabinet approved the draft text of the withdrawal agreement, the deal reached between EU and UK negotiators. The decision was followed the next day by the resignations of several members of Parliament. We review the first reactions in the blogosphere. Martin Wolf writes that Theresa May’s terrible Brexit deal has united the UK in horror. …Read More