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Analysis of the proposal „A constructive approach to Euro Area reform“

February 16, 2018 by andrew36 Leave a Comment

A group of 14 prominent economists, seven each from France and from Germany, has issued a detailed and rather comprehensive proposal for reform of the Euro Area (CEPR 2018).* This is a welcome initiative. There is a window of opportunity for reform in the Euro Area. Economically it has been created by the strengthening and increasingly broad economic upturn: policymakers can leave firefighting mode and focus on structural governance reforms. Politically it has been opened up by the 2015 report by the five presidents of the EU institutions, the initiatives by the new French President Macron, the proposals by the European Commission of December 2017, and, most recently, the declarations of intent on Europe emerging from the grand-coalition talks in Germany.

Together Germany and France account for half of Euro Area GDP. The authors of the report are all well-known in policy-oriented circles, while coming from different traditions. For all these reasons the report is set to be very influential. This appraisal follows the structure of the report itself, examining the underlying philosophy and problem analysis (1), the proposals relating to the financial sector (2), to fiscal governance (3) and finally institutional questions (4). An overall assessment with recommendations for extensions and alternatives concludes (5). [Read more…]

Filed Under: Commentary Tagged With: CEPR, ECB, economic governance, Emmanuel Macron, EMU, EU Commission, Euro Area, Euroreport, fiscal capacity, fiscal rules, France, Germany, Macroeconomic Dialogue, Macroeconomic Imbalance Procedure, Wirtschaftsdienst

Juncker talks the talk: who will walk the walk?

September 14, 2017 by andrew36 Leave a Comment

Jean-Claude Juncker’s 2017 State of the European Union (SOTEU) speech was marked, particularly compared with last year’s offering, by a renewed sense of optimism, but also by the urgency of serious institutional reform.

The Commission President covered a wide range of issues and challenges. The overall thrust of his message is that the EU now has the wind in its sails and must seize the opportunity to push ahead, taking further steps to underpin the integration process. That the wind has changed tack is evidenced by the defeat, for now at least, of the populist surge, the slo-mo train-wreck that is Brexit – which has revealed much anti-European rhetoric as simple untruths, and brought home the advantages of close economic integration – and not least the steadily improving economic situation, which has now broadened to many countries badly mauled by the crisis. Unemployment, as Juncker noted, is at a 9-year low.

Perhaps aware of the criticism that the EU is seen as too technocratic and fails to inspire emotions, the Commission President did emotion with a capital E, intertwining personal reminiscences with appeals to values including equality, freedom, the rule of law and transparency.

But it was not just mood music. [Read more…]

Filed Under: Analysis Tagged With: Brexit, EU Commission, euro, Jean-Claude Juncker, SOTEU, State of the European Union

Speech Pulse of Europe: On some recent developments in the Euro Area

June 6, 2017 by andrew36 Leave a Comment

The following text in German is a slightly revised version of a speech at the Pulse of Europe event in Dusseldorf, 4 June 2017

Der folgende Text ist die leicht überarbeitete Version einer Rede bei der Pulse of Europe-Veranstaltung in Düsseldorf, 4. Juni 2017

 

Mit dem neuen monatlichen Pulse of Europe-Veranstaltungsrhythmus haben wir die Chance, mehr Gedanken über Inhaltliches zu machen, darüber wohin sich Europa treibt. Wir wollen auf unseren Kundgebungen über neuste Entwicklungen berichten, und Debatten initiieren.

Heute möchte ich einige Neuerungen des letzten Monats aufgreifen, die gemeinsam haben, dass sie alle mit der gemeinsamen Währung, dem Euro zu tun haben.

Griechenland

Anfang Mai wurde ein neues Maßnahmenpaket in Griechenland beschlossen. Das ist aber leider keine gute Nachricht. Denn es sind weitere erhebliche Kürzungen der Renten beschlossen worden. Und der Grundfreibetrag wird stark gesenkt. Das sind Maßnahmen, die die Masseneinkommen und die Nachfrage weiter schrumpfen lassen und damit die Fortsetzung – sieben Jahre nach Ausbruch der Krise im Lande – einer gescheiterten Austeritätspolitik.

Im Gegenzug konnte sich die Eurogruppe aber nicht auf ein Paket von Schuldendienst-Erleichterungen oder anderen Unterstützungsmaßnahmen für Griechenland einigen, nicht zuletzt wegen des andauernden Streits zwischen der EU und dem Internationalen Währungsfonds. Dieser Zwist zwischen den Kreditgebern muss umgehend beendet werden – am saubersten dadurch, dass die EU die Verbindlichkeiten Griechenlands an den IWF übernimmt. Am 15 Juni tagt die Eurogruppe erneut. Wir sollten eine klare Botschaft an die Finanzminister, auch den deutschen schicken: Es kann nicht sein, dass Griechenland weiter am langen Arm verhungert.

Das bringt mich zu … [Read more…]

Filed Under: Commentary Tagged With: current account, deepening, Emmanuel Macron, EMU, EU Commission, Euro Area, France, Germany, Greece, Pulse of Europe, reflection papier

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  • Analysis of the proposal „A constructive approach to Euro Area reform“
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Recommended links

  1. Mainly macro (Simon Wren-Lewis)
  2. Paul Krugman
  3. econoblog101 (Dirk Ehnts)