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The eurozone is having an identity crisis and Italy will bear the brunt

Ashoka Mody, (2018), “The eurozone is having an identity crisis and Italy will bear the brunt”, Prospect magazine, 16 November The eurozone is trapped in an identity crisis. Long-held claims that the euro catalyses trade within the eurozone have been discredited (here and here), leaving no tangible benefits to celebrate. In contrast, the risks of a one-size monetary policy that fits none are evident enough. The ECB’s tendency towards tight monetary …Read More

Ideology (not economics) explains why the Troika treated Ireland less harshly than Greece

Judith Clifton, Daniel Díaz-Fuentes and Ana Lara Gómez, (2018), “Ideology (not economics) explains why the Troika treated Ireland less harshly than Greece”, LSE, European Politics & Policy, 14 November The Troika terminated its harsh and protracted intervention into Greece in August this year. The third – and last – “Economic Adjustment Programme” that had run for three years imposing strict austerity measures is over, at last. However, opinion among policy-makers at …Read More

Italy’s budget challenge to the EU

Simon Tilford, (2018), “Italy’s budget challenge to the EU”,, November What does the political stand-off between Italy and the European Commission over the country’s proposed 2019 budget deficit tell us about the chances of the euro ever challenging the dominance of the US dollar? After all, for many euro advocates, ending the dollar’s ‘exorbitant privilege’ was one of the original objectives of the single currency. And is especially relevant now, given …Read More

Brexit deal done – now for the hard part

John Springford, (2018), “Brexit deal done – now for the hard part”, Centre for European Reform, 15 November Theresa May’s Brexit deal offers some crumbs to Tory hardliners, the DUP and soft Brexiteers. But if the deal passes through parliament, a UK-EU customs union is likely. In the knowledge that no deal was not an option, Theresa May has agreed a withdrawal deal that is on the EU’s terms, but gives …Read More

The outlook for the euro area economy

Mario Draghi, (2018), “The outlook for the euro area economy”, Speech by Mario Draghi, President of the ECB, Frankfurt European Banking Congress, Frankfurt am Main, 16 November The euro area economy has now been growing for five years, and we expect the expansion to continue in the coming years. Yet we have recently seen a loss in growth momentum. In both of the last two quarterly ECB growth projections, our staff …Read More

Sounding the Alarm on Leveraged Lending

Tobias Adrian, Fabio Natalucci, and Thomas Piontek, (2018), “Sounding the Alarm on Leveraged Lending”, IMF Blog, 15 November Regulators in the United States and Europe have taken steps in recent years to reduce banks’ exposures and to curb market excesses more broadly. The effectiveness of these steps, however, remains an open question. For example, there is evidence that these actions have contributed to a shift of activities from banks to institutional …Read More

What the 2018 EBA stress tests (don’t) tell you about Italy

Ines Gonscalves Raposo, (2018), “What the 2018 EBA stress tests (don’t) tell you about Italy”, Bruegel, 15 November November has brought with it the results of the European Banking Authority (EBA) 2018 EU-wide stress tests. This exercise, aimed at surveying the resilience of EU banks against adverse market developments, covers 70% of total banking-sector assets across 48 EU banks. The results of the EBA stress tests were anticipated particularly for the …Read More

The Brexit Negotiations and Financial Services: A Two‐Level Game Analysis

Scott James and Lucia Quaglia, (2018), “The Brexit Negotiations and Financial Services: A Two‐Level Game Analysis”, The Political Quarterly This paper examines the state of the art of the Brexit negotiations in the area of financial services. It uses a two‐level game model to first explain the positions of UK and EU negotiators on the basis of the domestic constraints they face, and second, to consider the scope for final agreement …Read More

10 things you need to know about the Brexit deal

Charlie Cooper, (2018), “10 things you need to know about the Brexit deal”,, 15 November The 585-page draft agreement between Brussels and London will become the legal basis for Britain’s departure from the European Union — if it is agreed by EU27 leaders, then ratified by the U.K. parliament and the European Parliament. Alongside the Withdrawal Agreement, the U.K. and the EU have also published a non-legally binding outline political …Read More

Fog of Brexit war can’t hide Brussels’ win

Tom Mctague, (2018), “Fog of Brexit war can’t hide Brussels’ win”,, 15 November After 18 months of fractious negotiations, the U.K. prime minister squeaked her Brexit deal through her divided top team Wednesday and now faces yet another struggle to survive, let alone steer the deal through an angry parliament that must sign off the divorce treaty in the coming weeks. Theresa May’s fate now rests on her ability to …Read More