Feliu, Justine, (2017), “Why was the last TLTRO take-up unexpectedly high?”, Bruegel, 27 March Last week the ECB published data about the take up of the fourth and last tranche of funding from the second Targeted Long-Term Refinancing Operation (TLTRO 2.0). The data showed an unexpectedly large demand for liquidity from euro area banks. In total, EUR233.47bn was allotted to 474 Eurozone banks. Although the level of liquidity in the Eurozone …Read More

Emmanouilidis, Janis A., Zuleeg, Fabian , (2017), “The Rome Declaration – An imperfect display of unity”, EPC, 27 March On 25 March 2017, the leaders of the European Union (EU) came together to celebrate the 60th anniversary of the Rome Treaties. The EU and its members had good reasons to celebrate. The European integration process has been the product of grand aspirations inspired by the imagination of pragmatic visionaries, born of …Read More

Gilbert, Mark, (2017), “Euro-Zone Growth Pessimists Will Be Proved Wrong (Again)”, Bloomberg, 28 March We’ve seen this movie before. Last year, the average forecast of economists was for the euro zone to post a growth rate of a bit more than 1.5 percent; instead, gross domestic product expanded by 1.7 percent. The economy displayed a similar out-performance in 2015, with an average forecast for the year of 1.4 percent outpaced …Read More

Caldera, Aida, De Serres, Alain , Gori, Filippo , Röhn, Oliver, (2017), “Economic resilience: Trade-offs between growth and economic fragility”, Vox EU, 28 March Major global crises such as the 2008-09 episode are rare, but severe recessions have been quite frequent over the past four decades, often with a large cumulated cost in terms of foregone income and high unemployment. Figure 1 shows the incidence of different crisis types (banking, currency, …Read More

Batsaikhan, Uuriintuya, Darvas, Zsolt, (2017),  “European spring – Trust in the EU and democracy is recovering”, Bruegel, 24 March Increased support for populistic movements in the world’s richer countries is typically explained by two types of disappointment: economic insecurity and cultural backlash. Economic insecurity is fuelled by various factors, such as increased unemployment, slow wage growth or even wage drops, fears of ‘robotisation’, and cuts in social support through fiscal …Read More

Boumparis, Periklis, Milas, Costas, Panagiotis, Theodore, (2017), “Fair or not? How credit rating agencies calculated their ratings during the Eurozone crisis”, LSE EUROPP, 23 March Credit rating agencies received a great deal of criticism during the Eurozone crisis, but what actually explains the changes that occur in a country’s credit rating? Drawing on new research, Periklis Boumparis, Costas Milas and Theodore Panagiotidis write that ratings agencies have responded differently to low-rated and high-rated …Read More

Kirkegaard, Jacob, Funk , (2017), “Is Italy Europe’s Next Big Worry?”, Peterson Institute, 21 March Despite the prospects of a good year economically and politically for the euro area in 2017, uncertainty hangs on the horizon over Italy. Once the French election in May is over, investors’ attention will likely turn to Italy, where an election is due no later than May 2018. But the country may not be capable of …Read More

Marzinotto, Benedicta, (2017),  “The Eurozone is Still Vulnerable”, Project Syndicate, 22 March When the economic calculus reverses, we can expect to experience a sense of déjà vu. Each country’s gain will entail another country’s loss, which will undermine inter-eurozone cooperation and fuel political tensions. The effects will likely reverberate through each country’s domestic politics, strengthening forces that favor disintegration. To be sure, reforms that were implemented in response to the …Read More