Inflation rates can differ across regions of monetary unions. We show that in the euro area, the US, Canada, Japan and Australia, inflation rates have been substantially and persistently different in different regions. D...
The issue: Unemployment in Europe has increased to high levels and economic growth has remained subdued. A debate on additional policy instruments to address the situation is therefore warranted. Fiscal stabilisation mec...
‘There is now a distinct possibility that this crisis will be remembered as the occasion when Europe irretrievably lost ground, both economically and politically’. This was the starting sentence of our memos to the new E...
Larry Summers crystallized an important development and question in a recent speech given at the IMF research conference: has the world economy entered a period of “secular stagnation”? The slow recovery in the US since ...
The Italian Presidency of the EU has asked Bruegel to give a presentation to European Labour and Social Ministers at the informal EPSCO meeting in Milan on July 18. The aim of our presentation was to clearly lay out the major issues and to discuss the pros and cons of a European Unemployment Insurance (EUI). A number of important technical papers have already been done on the topic, for example by the French treasury. Taking one step back, we gave the following key messages.
Prior political consent to fiscal risk sharing needed
Ambitious project with implications for
labour market institutions, activation policies etc.
moral hazard (e.g. early retirement policies, health insurance(?), etc.)
and public finances
While more European stabilization mechanisms desirable, other mechanisms may be quicker
EUI not easy to build therefore rather for next crisis
Investment fund and better use of EU budget may be more practicable
Could be a powerful signal of a further „federalisation“ of Europe and solidarity if political consensus
Could be a strong mechanism to fundamentally reform labour markets.
The debate on tax competition opposes those who praise its positive effect on government efficiency, and those who accuse it of distorting public choices, inducing inequality but also undermining the functioning of marke...
‘Industrial policy is back!’ This is the message given by the President Elect of the European Commission, Jean-Claude Juncker, at his confirmation by the European Parliament yesterday. In his speech, Juncker said &...
I concur with Mody’s overall conclusion that the monetary union, even with the OMT programme, is incomplete and the issue of fiscal union remains unresolved. To permanently stabilise monetary union, the EU will nee...
The European Union’s leadership spent the last five years fighting an acute and existential crisis. The next five years, under your leadership, will be no less difficult. You will have to tackle difficult economic and in...
