Krauss, Melvyn, (2017), “Italy’s Bank Bailout Serves German Interests Too”, Bloomberg View, 7 July As Europe’s politicians digest the lessons from Italy’s recent 17 billion euro ($19.34 billion) bailout of two Venetian banks, two schools of opinion have emerged. The majority view is that the bailout, while less than ideal, at least brought greater financial stability to Italy. Relevant Posts Setser, Brad W., Smith, Emma, (2017), «Where Does Italy’s Bank …Read More

Gros, Daniel, (2017), “The Inflation Target Trap”, Project Syndicate, 6 July Central banks have a problem: growth in much of the world is accelerating, but inflation has failed to take off. Of course, for most people, growth without inflation is the ideal combination. But central banks have set the goal of achieving an inflation rate of “below, but close to 2%,” as the European Central Bank puts it. And, at …Read More

Schmidt, Christoph M., (2017), “The Art of the Surplus”, Project Syndicate, 5 June Germany’s persistently high current-account surplus may not be on the official agenda of this week’s G20 summit in Hamburg, but it is bound to provoke tensions among the assembled leaders. After all, that surplus, which has long been a bone of contention for many of Germany’s trade partners, hit a new high of 8.3% of nominal GDP …Read More

Baglioni, Angelo, Hamaui, Rony, (2017), “European Safe Bond: Handle With Care”, Social Europe, 5 July In the Euro Area there is a scarcity of risk-free securities; these are issued today only by a few sovereigns with a very high rating, but not by any European institution given strong German opposition. This situation creates huge capital flows in stress periods (flight-to-quality) and it contributes to the diabolic loop between bank and sovereign …Read More

Vilpišauskas, Ramūnas , (2017), “The rise of redistributive politics in the EU is setting limits on the completion of Economic and Monetary Union”, LSE EUROPP, 24 June One of the key areas of controversy in responses to the Eurozone crisis has been the notion of transferring financial resources from prosperous economies in the North to struggling economies in the South. Ramūnas Vilpišauskas argues that this issue has effectively put redistributive politics …Read More