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The Renewal of Europe’s Center?

 James, Harold, (2017), “The Renewal of Europe’s Center?”, Project Syndicate, 5 June British Prime Minister Theresa May, French President Emmanuel Macron, and German Chancellor Angela Merkel are different in many ways. May unexpectedly assumed her position last year after the Brexit vote, when her predecessor, David Cameron, resigned. Macron has even less experience: the presidency, which he just took over last month, is his first-ever elected position. Meanwhile, Merkel has served …Read More

Europe’s Tax Competition Is Unfair and Inefficient

Bershidsky, Leonid, (2017), “Europe’s Tax Competition Is Unfair and Inefficient”, Bloomberg, 31 May Juncker’s “see no evil, hear no evil” testimony was an extension of the LuxLeaks scandal that first broke in 2014. It transpired that more than 300 global companies, including Pepsi, McDonalds, Deutsche Bank and Amazon, had secured individual, secret tax rulings in the Grand Duchy. The scandal was huge, but its consequences haven’t lived up to the hype. Luxembourg codified its tax-ruling …Read More

Europe as an optimal political area: New findings

Alesina, Alberto, Tabellini, Guido, Trebbi, Francesco, (2017), “Europe as an optimal political area: New findings”, Vox Eu, 2 June In the economic analysis of secession and integration, the answer to this question reflects a trade-off between the benefits of economies of scale and scope in the provision of global public goods on the one side, and the cost due to heterogeneity of preferences on the other (Alesina and Spolaore 1997). The …Read More

Vive l’Euro?

Reichlin, Lucrezia, (2017), “Vive l’Euro?”, Project Syndicate, 1 June Emmanuel Macron’s victory in the French presidential election on May 7 triggered a surge of optimism about the future of the European Union, and the eurozone in particular. This is partly because Macron ran an unambiguously pro-EU campaign, and was rewarded for it. But it is also because the threat of a populist government in one of the EU’s founding states is, …Read More

How export growth achieved adjustment of massive trade deficits in the euro area

Efstathiou, Konstantinos, Wolff, Guntram B., (2017), “How export growth achieved adjustment of massive trade deficits in the euro area”, Bruegel, 31 May The reduction of current account deficits in euro-area countries since the 2008 crisis is strongly driven by increases in exports that dampened the effect on production of the fall in demand and imports. Relevant Posts Eurostat/Euro area international trade in goods surplus €30.9 bn/16 May 2017 Petroulakis, Filippos, (2017), «Internal devaluation …Read More

Europe’s Political Spring Fixing the Eurozone and Beyond

Bénassy-Quéré, Agnès, Giavazzi, Francesco, (2017),  “Europe’s Political Spring Fixing the Eurozone and Beyond”, Vox Eu, 31 May The election of Emmanuel Macron in May 2017 has opened the door to a ‘reboot’ of the Eurozone. This is an urgent priority: the euro’s economic architecture is still incomplete, meaning any large shock could reignite the Eurozone crisis. Economists have differing views on the details of how this might happen, but they …Read More

Reflection paper on the deepening of the economic and monetary union

Dombrovskis, Valdis, Moscovici, Pierre, (2017), “Reflection paper on the deepening of the economic and monetary union “, European Commission, 31 May The functioning and future of the Economic and Monetary Union (EMU) is a matter of interest for all European citizens from whichever Member State they come from, including those who will join the euro area in the future. After the departure of the United Kingdom from the EU, the economies …Read More

Rethinking German Economic Policy

Cohen, Desmond, (2017), “Rethinking German Economic Policy”, Social Europe, 31 May It is only too evident that economic policy in Germany remains rooted in pre-Keynesian ideas that most macroeconomists rejected many years ago, and this helps explains the German Government’s intransigence in the face of persistent criticism – including now from the IMF. It has not been prepared to listen despite the fact that its policy stance has directly contributed to …Read More

We need a European Monetary Fund, but how should it work?

Sapir, Andre, Schoenmaker, Dirk, (2017), “We need a European Monetary Fund, but how should it work?”, Bruegel, 29 May Many voices are calling for the ESM to be developed into a fully-fledged European Monetary Fund. But what changes would this entail, and how could the new institution be governed? The authors see both need and hope for change. Relevant Posts Merler, Silvia,Schoenmaker, Dirk, Véron, Nicolas, (2017), «How will Europe’s banking …Read More

Euro area unemployment at 9.3%

Eurostat/Euro area unemployment at 9.3%/31 May 2017 The euro area (EA19) seasonally-adjusted unemployment rate was 9.3% in April 2017, down from 9.4% in March 2017 and down from 10.2% in April 2016. This is the lowest rate recorded in the euro area since March 2009. The EU28 unemployment rate was 7.8% in April 2017, down from 7.9% in March 2017 and from 8.7% in April 2016. This is the lowest rate …Read More