Economic Policy


121 - 150 of 620
04 June 2012

At this point in the crisis, Daniel Gros writes that the common currency can only be saved if the governments of the troubled economies take determined action, supported by their citizens, to show that they attach overriding priority to their membership in the eurozone, even under difficult circumstances, and that they thus merit unreserved support from the rest of the member countries.

Daniel Gros is Director of the Centre for European Policy Studies

01 June 2012

If Greece leaves the eurozone, many expect that it that will be forced to default. This commentary by CEPS Director Daniel Gros argues that need not be the case.

01 June 2012

Commissioned by the European Parliament, this study outlines concrete options for improving the external representation of the euro area in international institutions such as the IMF, the World Bank and the G-20. The study proposes a two-stage process, the first of which requires the creation of a permanent subcommittee of the Eurogroup Working Group (EWG) to elaborate common positions at international level.

31 May 2012

This commentary observes that fear and panic are now the driving forces in the eurozone, splitting the area into two: pushing some into bad equilibria characterised by austerity and recession, and others into good equilibria allowing their governments to borrow at almost no cost. The responses adopted so far by the ECB and the European Commission reflect a fundamental misunderstanding of the crisis and fail to assuage the existential fears undermining confidence in the eurozone. The author outlines three essential steps to be taken to unify the eurozone.

23 May 2012

The eurozone countries are currently sitting on an aggregate exposure to Greece exceeding €300 billion. If the country were to exit the eurozone, it would certainly not be able to service its debt in the short run when the exchange rate overshoots.

22 May 2012

As unemployment climbs to new heights, Europe’s policy-makers are desperately casting about for the few instruments with which the EU can claim to foster growth. After a thorough examination of the facts on the ground, however, this paper finds that the North and the South of the euro area are diverging so much that they need very different policy prescriptions. Moreover, it points out that the two instruments that the EU has at its disposal to address structural problems in the South (the EIB and the Structural Funds) are unlikely to be effective this time.

15 May 2012

To ward off the threat of a worldwide depression that loomed at the end of the 2000s, governments opted to run up substantial fiscal deficits. In doing so, they sowed the seeds of the sovereign debt crisis. Saddled with often high debt burdens and modest growth prospects, developed countries’ governments must now rebalance their budgets. Doing so too rapidly, however, will choke growth. Faced with this dilemma, Japan and the United States have pursued growth policies while the euro area members are quickly trying to rebalance their budgets.

14 May 2012

This CEPS Policy Brief looks at the ways in which the euro crisis has impacted the successful functioning of the internal market of the EU and the state of play with respect to the creation of a common consolidated corporate tax base in corporate taxation.

H. Onno Ruding, is Chairman of the CEPS Board of Directors, former Minister of Finance of The Netherlands and Member of the Board of IBFD (International Bureau of Fiscal Documentation) in Amsterdam.

10 May 2012

The eurozone is caught in a ‘diabolical loop’ in which weak domestic banking systems damage sovereign fiscal positions and conversely, in which risky sovereign positions disproportionately threaten domestic banking stability. A European-level banking system could go a long way towards breaking this unfortunate loop and stabilising the eurozone. This would require a European safety net for cross-border banks.

07 May 2012

The urge to be seen to be ‘doing something’ is leading Europe’s policy-makers to rely on the few instruments with which the EU can claim to foster growth. But, as Daniel Gros points out in this Commentary, they should recognise that today’s growth crisis is quite different than it has been in the past.

07 May 2012

The analysis in this Commentary provides strong evidence showing that the burden of the adjustments to the imbalances in the eurozone between the surplus and the deficit countries is borne almost exclusively by the deficit countries in the periphery.

27 April 2012

With this new CEPS commentary, CEPS Associate Fellow Jorge Núñez Ferrer weighs in this week's debate on the 2013 EU budget, concluding that the discussion was unhelpful and mainly an exercise in political posturing and misinformation on the part of the member states.

25 April 2012

Lax financial conditions can foster credit booms. The global credit boom of the last decade led to large capital flows across the world, including large movements of resources from the Northern countries of the euro area towards the Southern part. Since the start of the crisis and more markedly after 2009, these flows have suddenly stopped, creating severe adjustment pressures. This paper argues that, at this point, the common monetary policy can only try to mitigate the unavoidable adjustment by maintaining overall financial stability.

24 April 2012

This paper investigates the evolution and determinants of manufactured exports and foreign direct investment (FDI) in 11 southern Mediterranean countries over the period 1985–2009 as well as their prospects under different scenarios pertaining to the development of the determinants. The econometric analysis confirms the role of exchange rate depreciation, the openness of the economy and the quality of institutions and infrastructure in fostering manufactured exports and FDI inflows in the region.

19 April 2012

Spain faces high unemployment and slow growth. This paper focuses on an important source of those problems, namely its housing market. While some adjustment has occurred since Spain's housing bubble burst in 2008, the authors find that house prices and construction need to decrease more to slow Spain's unsustainable accumulation of foreign debt.

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

12 April 2012

In this CEPS Commentary, Daniel Gros examines the different approaches taken by the Fed and the ECB to bring about economic recovery following the financial crisis and finds that there is a qualitative difference between the two with respect to the risk each is assuming that is more important than the mere size of their balance-sheet.

Daniel Gros is the Director of CEPS.

30 March 2012

In this CEPS Commentary Alessandro Giovannini and Daniel Gros assess the decision taken at the informal Eurogroup meeting on the 30th of March to raise the lending ceiling of the European Stability Mechanism/European Financial Stability Facility, arguing that the size of the so-called 'firewall' will be insufficient, should larger member states like Spain or Italy require financial assistance.

28 March 2012

Europe’s policy-makers are engaged in protracted discussion on whether and how to increase the size of the euro rescue funds (the EFSF and the ESM).  In this Policy Brief, Daniel Gros and Thomas Mayer argue that this attention on the headline size of the EMS and EFSF is misplaced.  They propose that a simpler solution would be to register the ESM as a bank, with access to the ECB under the same conditions as apply to any normal bank.

23 March 2012

While acknowledging that the massive amounts of liquidity injected into the eurozone banking system by the ECB were absolutely necessary to save Europe’s banking system, Paul De Grauwe now criticizes these lender-of-last-resort operations as ill-designed, making it likely that the ECB will have to discontinue them in the not so distant future.

The author is Professor at the London School of Economics and Associate Senior Fellow at CEPS.

16 March 2012

Despite significant economic reforms in many EU neighbouring countries in the Southern Mediterranean, their growth performance has on average been subdued. This study analyses the differences in growth performance and macroeconomic stability across Mediterranean countries, to draw lessons for the future. The main findings are that Southern Mediterranean countries should benefit from closer ties with the EU that result in higher levels of trade and FDI inflows, once the turbulence of the ‘Arab Spring’ is resolved, and from the development of financial markets and infrastructure.

15 March 2012

Excessive leverage and risk-taking by large international banks were the main causes of the 2008-09 financial crisis and the ensuing sharp drop in economic activity and employment. World leaders and central bankers promised that it would not happen again and, to this end, undertook to overhaul banking regulation, first and foremost by rectifying Basel prudential rules.

08 March 2012

All in all, this Commentary finds that the Fiscal Compact signed on 2 March 2012 by all member states of the EU (except the UK and the Czech Republic) may be long on good intentions but is rather short on substance. The main danger is that that it has been oversold and in no way constitutes a first step towards fiscal or political union.

07 March 2012

According to CEPS Director Daniel Gros, the real problem in Greece is no longer the fiscal deficit, but a combination of deposit flight and continuing excessive consumption in the private sector, which for more than a decade now has been accustomed to spending much more than it earns

01 March 2012

The eurozone is in recession and will show negative growth in 2012, notes Stefano Micossi in this new CEPS Policy Brief. Hopes that fiscal consolidation could spur growth by improving household and business confidence are not materialising, because in reality, domestic demand has been hit too hard by fiscal consolidation, and investment throughout the Union remains well below pre-crisis levels.

17 February 2012

While acknowledging that Portugal is far from being in the same dire straits as Greece in terms of its levels of public debt and deficit, Daniel Gros points out in this Commentary that excess private consumption is Portugal’s real problem. And if this problem is not addressed, he warns that the eurozone might soon have another country in need of debt forgiveness.

Daniel Gros is Director of CEPS.

13 February 2012

The objectives of Work Package (WP) 2 of the EU FP7 project ANCIEN are to assess the actual and future numbers of elderly care-dependent persons in selected countries. Such projections are needed to support planning to meet future needs for long-term care (LTC) across the EU. This study has selected four countries for projections of LTC needs: Spain, Poland, Germany and the Netherlands. These countries are representative of European epidemiology and of different systems for the provision of long-term care.

09 February 2012

What share of the EU’s collective GDP should the EU budget represent? 1%? 1.05%? 0.95%? A Task Force set up by CEPS to explore this question finds that the EU member states, once again, are locked in a pointless battle. Their report argues that the amount is not decisive when it comes to EU spending, but that quality matters far more than quantity. And it is on the quality side that the most significant improvements can be made.

07 February 2012

In Italy, regions are at the centre of the system providing long-term care services, which typically include residential services, formal home care and monetary benefits. The regions define their own policies for the provision of care, ranging from needs assessment and monitoring tools to the accreditation of service providers. Quality assurance policies are primarily directed at residential services and formal home care, but as this research report highlights, there are many differences across regions.

Georgia Casanova is with the LUISS Business School in Rome.

07 February 2012

This Policy Brief summarises findings from Work Package (WP) 5 of the ANCIEN project and its three objectives: first, collecting comprehensive information on national quality assurance policies and indicators in LTC systems in 15 EU member states; second, using the collected data to derive a typology of national systems on quality in LTC; and third, producing recommendations at all levels (European, national and local) to improve quality of LTC in Europe. The study has identified four clusters of countries based on the respective quality assurance policies and indicators.

07 February 2012

The provision of informal care is an important source of long-term care for older people in Europe. According to the latest available data, between 21% and 43% of the population living in Europe aged 65 and older receive informal care. Given fiscal constraints on public budgets in most of the EU countries and the ageing of the population, it is likely that in the very near future informal care providers will represent the most important source of care for disabled and older people in Europe.