Economic Policy

91 - 120 of 652
30 May 2013

In general equilibrium models the reference scenario is important, as the evaluation of the alternative policies modelled is based on their deviation from the reference scenario. The reference scenario relates to the development of an economic outlook for each region and sector of the model. This means that assumptions are made about the main drivers of growth, e.g. population growth and technical progress. This report provides the main assumptions used for the development of the reference scenario in the MEDPRO project.

30 May 2013

This report presents the economic and structural database compiled for the MEDPRO project. The database includes governance, infrastructure, finance, environment, energy, agricultural data and development indicators for the 11 southern and eastern Mediterranean countries (SEMCs) studied in the MEDPRO project. The report further details the data and the methods used for the construction of social accounting, bilateral trade, consumption and investment matrices for each of the SEMCs.

27 May 2013

A staggering one out of every four young people is presently unemployed in Spain. And comparable numbers in Greece, Portugal and Italy are hardly more encouraging. Germany, on the other hand, enjoys a historically low youth unemployment rate of 8% and is experiencing skill shortages in some occupations. Against this background, this Commentary calls upon the European Commission to use its considerable strength and know-how in bringing partners and stakeholders together in order to facilitate the necessary infrastructure to allow better matching across borders of workers and employers.

08 May 2013

In surveying the heated debate in the eurozone about austerity and the cost of high public debt, this CEPS Commentary suggests that the influential paper by Carmen Reinhard and Kenneth Rogoff misses the key point that public debt owed to foreigners is different from debt owed to residents.

Daniel Gros is Director of the Centre for European Policy Studies.

29 April 2013

East Asian economic integration is less well known in Europe than is desirable in the EU’s own enlightened self-interest. It is also badly understood, not least because a range of ‘soft’ cultural, historical and political aspects are insufficiently appreciated in Europe. This CEPS Essay offers a deeper personal reflection on the emergence and development of East Asian economic cooperation and market-driven integration. It attempts to address some of the lingering reservations on both sides and to render the reservations in East Asia more intelligible to Europeans.

17 April 2013

There is general agreement that banking supervision and resolution have to be organised at the same level. It is often argued, however, that there is no need to tackle deposit insurance because it is too politically sensitive.

12 April 2013

Faced with limited options for coming up with the funds needed to pay off the next instalment on its bailout loan, Portugal is advised in this Commentary by economist Leonor Coutinho to trim the number of public sector employees, in combination with an increase in public sector working hours, among the lowest in Europe. In her view, these measures will have the best long-term implications both in terms of fiscal sustainability and of labour productivity, and may finally allow the country to resume the catching-up process that has been stalled since the start of EMU.

08 April 2013

While acknowledging that Cyprus is too small to matter for global financial markets, this Commentary finds that its case could turn out to become a very important precedent for the way European policy-makers deal with future banking problems and the plans for a ‘banking union’.

Daniel Gros is Director of the Centre for European Policy Studies. This Commentary was first published by Project Syndicate on 5 April 2013, and disseminated to newspapers and journals worldwide.

05 April 2013

This Commentary argues that the failure to recognise shared responsibility for the banking crisis in Cyprus has led to the imposition of a bail-in template that increases the risk of banking crises and economic depression in the eurozone.

Paul De Grauwe is John Paulson Professor in European Political Economy at the London School of Economics and Senior Associate Research Fellow at CEPS.

27 March 2013

In many eurozone countries, domestic banks often hold more than 20% of domestic public debt, which is an unsatisfactory situation given that banks are highly leveraged and that sovereign debt is inherently subject to default risk within the euro area. This paper by Daniel Gros finds, however, that the relative concentration of public debt on bank balance sheets is not just a result of the euro crisis, for there are strong additional incentives for banks in some countries to increase their sovereign.

06 March 2013

Ten years ago, Germany’s economy was mired in recession while the rest of Europe was recovering. Its unemployment rate was higher than the euro area average; it was violating European rules on excessive deficits and its financial system was in crisis. Today, however, Germany is held up as a model for other countries to follow.

25 February 2013

This paper aims at identifying ways to pursue the EU–Mercosul negotiations leading to a free trade agreement (FTA). After reviewing their already long history, it outlines a basic framework, in goods, services and other themes, judged possible. The main point is that, given the prevailing conditions on both sides, an agreement to be signed within a reasonable time must be modest, i.e. along the described lines. It then clearly sets up the decisions confronting the negotiators: either to pursue the modest, feasible option or to terminate negotiations under the FTA heading.

22 February 2013

This paper first aims at assessing the economic and political importance of Mercosur for the EU’s interests in the short and medium run – say for the one or two coming decades or so. As Mercosur’s size is largely determined by Brazil’s size, this paper focuses on Brazil – although the paper assumes that, from Brazil’s perspective, a Brazil–EU preferential trade agreement (PTA) is a non-starter. It then aims at positioning the Mercosur–EU (MEU) PTA in the context of the EU’s current trade policy.

13 February 2013

The structure of the world economy has been changing quickly during the last decade. The emerging global economy is much more fragmented than in the past and characterised by different global actors, each one with specific features and roles. In this setting, both Brazil and the European Union play role. This paper, without pretending to provide a full analysis of the European and Brazilian economies, offers a description of their main international economic features to understand their current and future role in the global order.

06 February 2013

The experiences of small countries like Greece, the Baltic states and Iceland are often adduced as evidence to justify arguments both for or against austerity. In this Commentary, CEPS Director Daniel Gros observes, however, that the proponents in these disputes usually neglect to mention the key idiosyncratic characteristics and specific starting conditions that can make such direct comparisons meaningless. He points out that Latvia has recovered quickly whereas Greece is still in recession.

05 February 2013

In this Commentary, Paul De Grauwe and Yuemei Ji provide evidence to suggest that movements in the spreads in the eurozone – i.e. the difference between national government bond rates and the German rate – between 2010 and the middle of 2012, when the ECB announced its OMT (outright monetary transactions) programme, were driven by market sentiment. Later as the fear and panic subsided, thanks largely to the announcement of the ECB, these spreads declined spectacularly.

26 January 2013

This article was published by CEPS Director Daniel Gros in Kredit und Kapital, Vol. 45, No. 4, 2012.

There is general agreement that banking supervision and resolution have to be organised at the same level. It is often argued, however, that there is no need to tackle deposit insurance because it is politically too sensitive.

08 January 2013

While a banking union for Europe has been discussed by economists since even before the 2007 crisis, the issue has now moved up to the top of the eurozone agenda. But what kind of banking union? For whom? Financed how? And managed by whom? These questions are explored in a new Vox eBook comprisings 15 papers on the topic by leading economists from both sides of the Atlantic.

08 January 2013

CEPS Director Daniel Gros contributed a chapter entitled “Transforming the ESM into an EMF as Part of the IMF” to this set of proceedings of a conference held in October 2011 on “The international monetary system: Sustainability and reform proposals”, organised in Brussels in October 2011. The book aims to celebrate the 100th anniversary of Robert Triffin (1911-1993), whose life and works are recalled by historians and witnesses.

07 January 2013

Taking exception with the often-heard bromide that Europe needs more integration to save its social model, Daniel Gros reiterates his position in this new CEPS Commentary that faster economic and population growth are key to ensuring the future of Europe’s social security systems. Daniel Gros is Director of CEPS.

21 December 2012

In an attempt to understand why the Greek economy is collapsing, this Commentary points out two key aspects that are often overlooked – the country’s large multiplier and a bad export performance. When combined with the need for a large fiscal adjustment, these factors help explain how fiscal consolidation in Greece has been associated with such a large drop in GDP.

Cinzia Alcidi is LUISS Research Fellow at CEPS and Daniel Gros is Director of CEPS.

12 December 2012

Following the June 2012 European Council decision to place the ‘Single Supervisory Mechanism’ (SSM) within the European Central Bank, the general presumption in the policy discussions has been that there should be ‘Chinese walls’ between the supervisory and monetary policy arms of the ECB. The current legislative proposal, in fact, is explicit on this account. On the contrary, however, this paper finds that there is no need to impose a strict separation between these two functions.

07 December 2012

In this new CEPS commentary, CEPS Director Daniel Gros takes a closer look at the US experience to point out that the federal budget provides much less insurance against state-specific shocks than widely assumed, while the US banking union act as a very powerful shock absorber. Accordingly, he argues that the euro’s long-term stability depends far more on completing plans for a European banking union than on the introduction of a fiscal capacity for the eurozone.

03 December 2012

H. Onno Ruding describes the negotiations on the EU budget, which will resume in 2013 following their collapse in late November, as “more awkward than usual”. In this new CEPS Commentary, he advises EU leaders to make the instrument more forward-looking in promoting economic growth in Europe and less focused on maintaining legacy entitlements of past years. In his view, this means more spending on research, innovation, education and infrastructure and also requires further reductions in the still-dominant agricultural subsidies as well as regional and structural funds.

30 November 2012

This book presents original research that examines the growth of international investment agreements as a means to attract foreign direct investment (FDI) and considers how this affects the ability of capital-importing countries to pursue their development goals. The hope of countries signing such treaties is that foreign capital will accelerate transfers of technologies, create employment and benefit the local economy through various types of linkages. But do international investment agreements in fact succeed in attracting foreign direct investment?

28 November 2012

In the wake of the collapsed talks on a new EU budget for 2014-20, a new CEPS Commentary by Jorge Núñez Ferrer allows that there is a good chance that agreement will be reached before the summer but that the instrument will remain largely disconnected from the fundamental needs of the EU, foremost of which is the imperative to address imbalances in the eurozone.
The author is an Associate Research Fellow at CEPS.

23 November 2012

It is plainly apparent that now is the time to make adjustments to the severe macroeconomic imbalances created by the sudden stop in capital flows to the countries in the southern periphery of the eurozone. But crucial questions arise about how to correct the imbalances, how to share the burden of the adjustment and what is the role of the European institutions, foremost the European Central Bank (ECB), in this process.

15 November 2012

This CEPS Commentary argues that the way in which the burden of adjustment to the imbalances in the eurozone is borne almost exclusively by the deficit countries in the periphery produces a deflationary bias in the region as a whole. Against the threat of double-dip recession, Paul De Grauwe asserts that the adjustment could be done differently and calls for implementation of a more symmetric macroeconomic policy that reduces the deflationary bias.

Paul De Grauwe is Professor at the London School of Economics and Associate Senior Fellow, CEPS.

06 November 2012

This Commentary attempts to discern the distinguishing features between the present euro crisis and the financial crisis brought on in the US by the subprime lending disaster and the ensuing collapse of banks and other financial institutions in 2007-08.

18 October 2012

This CEPS Special Report analyses the proposed expansion of innovative financial instruments in the EU Multiannual Financial Framework for the 2014–20 period. It presents the economic rationale, governance principles and criteria that these instruments should follow and compares these with proposals from the European Commission. Based on this assessment, it makes recommendations for the proposed instruments.