Mody A., (2014), “The ECB’s Bridge Too Far”, Project Syndicate, 11 Φεβρουαρίου. The German Constitutional Court’s recent decision to refer the complaint against the European Central Bank’s so-called “outright monetary transactions” to the European Court of Justice (ECJ) leaves the scheme’s fate uncertain. What is clear is that the economics behind OMT is flawed – and so is the politics. The OMT program arose in August 2012, when months of …Read More

Mody A., (2014), “Europhoria once again- should we view the recent fall in spreads and yields as a sign of confidence or as another overreaction?”  Bruegel Blog, 10 February. Europhoria was rampant in the euro’s first decade. Just before the onset of the crisis, the yields paid by the soon-to-be distressed Greek, Irish, and Portuguese sovereigns were almost indistinguishable from the yields paid by the German sovereign. Then it all …Read More

Fratzscher, M., (2014), “Germany’s Pyrrhic Victory”, Project Syndicate, 10 February. The German Constitutional Court has ruled against the European Central Bank’s pledge to buy potentially unlimited quantities of distressed eurozone countries’ government bonds, and has called on the European Court of Justice (ECJ) to confirm its decision. Until that happens, the “outright monetary transactions” (OMT) scheme is effectively dead, weakening the ECB’s ability to act as an effective and credible …Read More

Loungani, Pr., (2014), “Are Jobs and Growth Still Linked?”, iMFdirect, 7 Φεβρουαρίου. Over 200 million people are unemployed around the globe today, over a fifth of them in advanced economies. Unemployment rates in these economies shot up at the onset of the Great Recession and, five years later, remain very high. Some argue that this is to be expected given that the economy remains well below trend and press for …Read More

Sinn, H.-W., (2014), “Outright Monetary Infractions”, Project Syndicate, 10 February. The German Constitutional Court has delivered its long-awaited decision on the European Central Bank’s “outright monetary transactions” program. Since its launch in 2012, the OMT program has allowed the ECB to buy, if necessary, unlimited amounts of troubled eurozone countries’ government bonds, provided the affected countries subscribe to the rules of Europe’s rescue fund, the European Stability Mechanism.  

Sanchez, J., Varoudakis, Ar., (2014), “Tracking the causes of Eurozone external imbalances: New evidence”, 6 February. External imbalances within the Eurozone grew substantially between the introduction of the euro in 1999 and the global financial crisis of 2008–09. Using new empirical evidence, this column argues that imbalances in the Eurozone periphery were mainly driven by a domestic demand boom, triggered by greater financial integration, with changes in the periphery’s competitiveness …Read More

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