Pâris, P. and Wyplosz, Ch., (2014) “PADRE: Politically Acceptable Debt Restructuring in the Eurozone”, 28 January. The average public debt level of Eurozone countries now stands at 95.5% of GDP, and it is much higher in a number of countries. There is a lively debate about whether public debts can be too big and, if so, what the threshold is. At the very least, large public indebtedness is unhelpful, and …Read More

Lagarde, Ch.,(2014), “Jobs and Growth: Supporting the European Recovery”, iMF  Direct, 28 January. As we begin the new year, Europe confronts both good and bad news. First the good news. Growth is finally picking up in the euro area as it is slowly emerging from the deep recession.  The bad news? Still nearly 20 million people are unemployed. Until the effects on employment have been reversed, we cannot say that …Read More

Blanchard, Ο., (2014), “Is the world recovery really strengthening?”,  27 January 2014. The global economy seems to be on the mend. In this column, IMF Chief Economist Olivier Blanchard provides a quick overview of the likely developments. The key points are that the recovery is happening as expected, but it remains fragile and uneven across major economies. Normalising monetary policy poses risks for vulnerable emerging markets and deflation is a …Read More

Reichlin, L. and Garican, L., (2014), “Squaring the Eurozone’s Vicious Circle”, Project Syndicate, 27 January. The eurozone is caught in a diabolical loop, in which weak banking systems harm their sovereigns’ fiscal positions, which in turn compromise the banking system’s stability. But, over the last couple of years, policymakers have focused largely on reducing banks’ impact on their sovereigns – for example, through a Europe-wide supervisory authority and efforts to …Read More

De Grauwe, P., (2014), “Yes, it’s the economy, stupid, but is it demand or supply?”, Economic Policy, CEPS Commentaries, Centre for European Policy Studies, 24 January. The change in policy strategy of François Hollande and his embrace of Say’s law are surprising on another count. As mentioned earlier, supply-side economics together with a rejection of demand management is based on an ideological premise that markets have self-regulating characteristics, and that unemployment will …Read More

Nixon, S., (2014), “Europe Can Be Optimistic—in the Long Term”, The Wall Street Journal, 26 January. How one thinks about the outlook for Europe depends partly on whether one regards high unemployment, rising inequality and loss of trust as a leading or lagging indicator. Has the European economy undergone a structural shift in which case high unemployment and growing inequality could be harbingers of worsening political instability? Or do today’s …Read More

Duso, T.,  Gugler, K. and Szücs, Fl., (2014), “European merger policy reform”, VoxEu, 26 January. In 2004, European merger law was substantially revised, with the aim of achieving a ‘more economic approach’ to merger policy. This column discusses a recent empirical assessment of European merger cases before and after the reform. Post-reform, the outcomes of merger cases became more predictable, and the Commission prohibited fewer pro-competitive mergers. While there remains …Read More

Giuli, M., (2014), “A Disillusioned Guide to Spread Reductions”, Madariaga Paper – Vol. 7, No. 1, January. The present commentary will focus on the case of Italy, where in January 2014 the spread fell to under 200 points, recording a reduction of 80 points over the previous year. The current differential between Italian and German 10-year sovereign bond yields is back to 2011 levels, when the imminent risk of losing …Read More

Hasan, If. And Takalo, T., (2014), “Efficient retail payments: An untapped source for reviving growth in Europe?”, 24 January. Efficient retail payments are associated not only with lower direct costs but also with indirect benefits, and ultimately – with enhanced economic growth. This column presents research on different retail payment habits in the Eurozone. A correlation exists between the forms of payment in a country and its recent economic fortune. …Read More