Larry Summers crystallized an important question in a recent speech: Has the world economy entered a period of “secular stagnation”? The slow recovery in the United States since the financial crisis is his starting point...
France and Germany, which together account for half of euro-area GDP, are rightly considered the key to the euro area’s exit from the current impasse of low growth, falling inflation and increasingly dangerous debt traje...
The International Monetary Fund now estimates a 30% risk of deflation in the eurozone, and growth figures within the monetary union continue to disappoint. But policymakers seem trapped in a cat’s cradle of economic, pol...
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.
‘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...
In this blogpost, we summarize our recently published paper, in which we discuss in detail the dilemmas for the ECB and the need to act. Inflation forecasts by the ECB have fallen substantially below the two percent thre...
The currency in Nicosia will no longer be worth the same as it is in any other country, says Guntram Wolff. Cypriot lawmakers have passed a bill that paves the way for capital controls. The legislation allows Cyprus’s go...