Gilbert, Μ. (2014) “ECB Needs Japanese Lessons“, Bloomberg View, 05 Νοεμβρίου. Economists like to warn about Japanification, the risk that a country will follow the desultory experience of Japan, which slumped into deflation in 1999 and for all intents never climbed out. As Europe slides closer to deflation, the European Central Bank should heed the historical experience and the current efforts by the Bank of Japan to resuscitate growth. …Read More
Five minutes with Robert O. Keohane: “We shouldn’t fool ourselves by believing that global governance will soon be made democratic”
Interview with R. Keohane (2014) Five minutes with Robert O. Keohane: “We shouldn’t fool ourselves by believing that global governance will soon be made democratic”, LSE EUROPP, 05 Νοεμβρίου. Can global governance through organisations such as the United Nations and the World Trade Organization ever be made properly democratic? In an interview with EUROPP’s editor Stuart Brown, Robert O. Keohane discusses the problems with establishing global democratic governance, the …Read More
The Draghi Put on Trial
Gopinath, G. (2014) “The Draghi Put on Trial“, Project Syndicate, 03 Νοεμβρίου. In the summer of 2012, European Central Bank President Mario Draghi pledged to do “whatever it takes” to save the euro, including purchasing “unlimited” amounts of struggling governments’ bonds. The move, which has come to be known as the “Draghi put,” almost immediately reduced borrowing costs for Spain and Italy, and is widely touted as having pulled …Read More
Pulling the eurozone back from the brink- whatever its flaws, OMT is the closest thing to a safety net the eurozone has
Mody, Α. (2014) “Pulling the eurozone back from the brink- whatever its flaws, OMT is the closest thing to a safety net the eurozone has“, Bruegel Institute, 02 Νοεμβρίου. On October 14, as yet another financial storm gathered over Europe, the European Court of Justice convened in Luxembourg. In the coming months, the ECJ will assess the German Constitutional Court’s ruling that the European Central Bank’s “outright monetary transactions” (OMT) scheme …Read More
Europe’s Crazy Finance Tax
The Editors: “Europe’s Crazy Finance Tax“, Bloomberg View, 02 Νοεμβρίου 2014. Wrangling among the 11 euro-region nations planning to tax financial transactions is further evidence, if any were needed, that the levy is a bad idea that should be abandoned. The European Commission acknowledges that the latest version of its planned financial transactions tax (or Tobin tax, or Robin Hood tax, if you prefer) isn’t the best option. That, …Read More
German austerity is not only damaging the Eurozone, but is also starving the country of its own much needed investment
Hancké, Β. (2014) “German austerity is not only damaging the Eurozone, but is also starving the country of its own much needed investment“, LSE EUROPP, 03 Νοεμβρίου. A common argument in the context of the Eurozone’s economic problems is that Germany should pursue a more expansive fiscal policy to help generate growth in the rest of the single currency area. Bob Hancké writes, however, that while such a strategy …Read More
Europe’s Deadly Fiscal Paralysis
Bloomberg Editors (2014) “Europe’s Deadly Fiscal Paralysis“, Bloomberg View, 31 Οκτωβρίου. Quarrels over European Union budget policy don’t amount to much in themselves. Yet they demonstrate a pathology whose importance is hard to exaggerate. If growth in the euro area is not restored, the future of the union itself will be in jeopardy. Instead of grappling with this, however, Europe’s leaders are endlessly engaged with trivialities. Anti-EU sentiment has …Read More
Why Austerity Is Contagious
Janssen, R. (2014) “Why Austerity Is Contagious“, Social Europe Journal, 27 Οκτωβρίου. Austerity is contagious: The case of France France is finding itself between a rock and a hard place. On the one hand, with 54% of companies reporting in the third quarter 2014 that they find activity constrained by a lack of customers, the main problem is clearly on the side of demand. On the other hand, its …Read More
The Wrath of Draghi: First German Bank Hits Savers with Negative Interest Rate
Richter, W. (2014) “The Wrath of Draghi: First German Bank Hits Savers with Negative Interest Rate“, ΘZeroHedge, 30 Οκτωβρίου. Deutsche Skatbank, a division of VR-Bank Altenburger Land, which was founded in 1859, is not the biggest bank in Germany, but it’s the first bank to confirm what German savers have been dreading for a while: the wrath of Draghi. Retail and business customers with over €500,000 on deposit as …Read More
Are the Eurozone’s fiscal rules dying? – if so: good riddance
Mody, A. (2014) “Are the Eurozone’s fiscal rules dying? – if so: good riddance“, Bruegel Institute, 28 Οκτωβρίου. The European Commission and European Council have blinked. Reprimanding France and Italy for their transgressions of the fiscal rules was too risky. With face-saving measures, France and Italy will now break the eurozone’s prized fiscal rules. While unseemly in the eurozone context, this is a good economic outcome. Forcing deeper austerity …Read More