Maria Demertzis, David Pichler, (2019), “Whose (fiscal) debt is it anyway?”, 6 February,  Bruegel The authors map how much fiscal debt is in the hands of domestic and foreign holders in the euro area. While the market for debt was much more international prior to the crisis, this trend has since been reversed. At the same time, central banks have become important holders of fiscal debt. Relevant Posts European Commission, …Read More

Giancarlo Corsetti, Aitor Erce, Timothy Uy, (2019), “Official lending in the euro area: Lessons for debt sustainability “, 13 February During the euro area crisis, management of official loan maturities emerged as a critical item in the discussion on which instruments and strategies are most effective at ensuring debt sustainability. Using a theoretical model calibrated to Portugal and cross-country data, this column shows that lengthening loan maturities and managing debt …Read More

European Commission, Economic and Financial Affairs, (2019), “Fiscal Sustainability Report 2018 Volume 1”, Institutional Paper 094, 18 January The EU government debt ratio has been continuously decreasing since 2014, and reached around 81% of GDP in 2018, supported by the solid economic activity – albeit a slower growth pace last year – still favourable financial conditions, and a broadly stable fiscal outlook. At the same time, some other advanced economies exhibit much higher …Read More

Barry J. Eichengreen ; Asmaa A ElGanainy ; Rui Pedro Esteves ; Kris James Mitchener, (2019), “Public debt through the ages”, IMF Working Paper No 19/6, 15 January We consider public debt from a long-term historical perspective, showing how the purposes for which governments borrow have evolved over time. Periods when debt-to-GDP ratios rose explosively as a result of wars, depressions and financial crises also have a long history. Many …Read More

Sam Lowe, John Springford, (2019), “After the meaningful vote: What are Theresa May’s options?”, CER, 16 January It is difficult to see an obvious pathway toward the UK remaining in the EU – be it by a second referendum or a decision made by parliament. It would probably require a change of heart by Jeremy Corbyn, who opposes a re-run of the referendum, and by May. One possible scenario is …Read More

Peter Bofinger, (2019), “Normalisation of the ECB’s monetary policy is timely”, The Progressive Post, 11 January If everything goes according to plan, the European Central Bank (ECB) will end its “extended asset purchase programme” at the end of the year. This marks the end of a three-year phase in which public sector and private bonds totaling 2 trillion euros were bought. The high level of these unconventional measures naturally raises the …Read More

Sergio Olalla, Enrique Chueca and Javier Padilla, (2019), “Spain is no longer exceptional: Mainstream media and the far-right party Vox”, LSE Eurocrisis in the Press, 10 January For a long time Spain and Portugal have been considered exceptions within the European Union due to the lack of a far-right political party with representation in parliament. However, this situation is no longer the case in Spain due to the recent entrance of Vox …Read More

Ashoka Mody, Milan Nedeljkovic, (2019), “The ECB’s performance during the crisis: Lessons learned”, VoxEu.org, 14 January Dollar liquidity was a very particular need. By alleviating the dollar shortage, the Fed made a significant contribution to the euro area’s stabilisation. In contrast, the ECB’s euro liquidity to banks, by its very design, did little to create confidence in economic prospects. While the liquidity did bring temporary calm, it increased the risk-taking …Read More

Guntram B. Wolff, (2019), “The implications of no-deal Brexit: is the European Union prepared?”, Bruegel, 14 January Overall, a no-deal Brexit would be disruptive in the short-term: There would be immediate very significant administrative and logistical challenges in trade. Preparations to reduce those disruptions are underway but are unlikely to be sufficient. But while Most-Favoured Nation tariffs will affect some sectors significantly, the macroeconomic effect on the German economy might not be …Read More