Macroeconomics & the euro

Some sorts of austerity are better than others

Some sorts of austerity are better than others

01 June 2012
Governments in the eurozone's periphery are making indiscriminate cuts. Reducing spending that does little to support demand and recycling it into investment would help.
A Greek exit will not be cathartic

A Greek exit will not be cathartic

25 May 2012
How the eurozone handles Greece will determine whether or not the single currency survives – and hence the future of the EU as a whole.
If a Greek exit from the eurozone is mishandled, contagion to the other struggling member-states could be uncontrollable, leading inexorably to the collapse of the euro....
Ireland's fiscal treaty referendum

Ireland's fiscal treaty referendum: (More) fear and loathing in the eurozone?

Hugo Brady
11 May 2012
Ireland votes on the EU’s new fiscal compact on May 31st. Hugo Brady assesses the chances of a Yes and the consequences of a No.
Germany's choice

Germany's choice: Higher inflation or sovereign defaults

09 May 2012
Germany faces a choice between higher inflation or a wave of sovereign defaults culminating in either a transfer union or the collapse of the eurozone.
Governance reforms have left the euro's flawed structure intact

Governance reforms have left the euro's flawed structure intact

Philip Whyte
18 April 2012
European leaders have presided over a major overhaul of the way the eurozone is run. But the eurozone's basic institutional configuration remains as unstable as ever.
Stable public finances require stronger business investment

Stable public finances require stronger business investment

26 March 2012
Economic recovery in Europe is being held back by the unprecedented weakness of business investment. Despite a secular decline in business taxation and labour market reforms that have boosted the power of capital relative to labour, the ratio of investment-to-GDP across the EU is at a 60 year low. Rather...
A big eurozone gamble

Eurozone policy-makers place a big bet

13 March 2012
The ECB's decision to lend almost unlimited amounts of money to Europe's banks has bought the eurozone some time. But there is risk that time will be wasted.
Europe's growth strategy: All supply and no demand

Europe's growth strategy: All supply and no demand

Philip Whyte
27 February 2012
Europe's growth performance since 2008 has been abject. The reason is that fiscal policy has done too little to offset the impact of deleveraging in the private sector.
France: Why the self-flagellation?

France: Why the self-flagellation?

10 February 2012
France has its economic weaknesses. But in some important respects its model holds out better prospects for a return to economic growth across the eurozone than does Germany's.
Greece's real challenge

Greece's real challenge

Katinka Barysch
03 February 2012
Greece's new bail-out package needs less austerity and more structural reforms. A bloated and immobile public sector remains a drag on growth.
The Baltic states and Ireland are not a model for Italy and Spain

The Baltic states and Ireland are not a model for Italy and Spain

27 January 2012
Were Italy and Spain to emulate the Baltics states and Ireland, the implications for the European economy and the future of the euro would be devastating.
Needed: A growth strategy for Europe file thumbnail

Needed: A growth strategy for Europe

26 January 2012
The struggle to address the eurozone crisis means that Europe's unprecedented economic malaise is receiving far too little attention. To the extent that the EU has a growth strategy it relies heavily on the adoption of structural reforms in the crisis-hit eurozone economies. But such reforms alone will not drive...
Why an EU financial transations tax is a red herring file thumbnail

Why an EU financial transactions tax is a red herring

Philip Whyte
26 January 2012
Ever since it was first mooted in the 1970s, a financial transactions tax (FTT) has often been thought of as an interesting idea that cannot work in practice (because it needs to be adopted universally if it is not to be undermined by tax arbitrage). In other words, the difficulty...
The UK-EU split: The impact on Central Europe thumbnail

The UK-EU split: The impact on Central Europe

Tomas Valasek
13 December 2011
The UK decision to boycott the new EU treaty has left like-minded countries in Central European in weaker position to resist France's etatist tendencies.
Britain on the edge of Europe thumbnail

Britain on the edge of Europe

09 December 2011
The Brussels agreement on December 9th will weaken British influence in the EU and could damage the single market.
Summit reaction

EU summit: Enough to save the euro?

08 December 2011
The UK’s decision to marginalise itself by vetoing a new EU-27 treaty has dominated the post-summit media coverage. And for good reason – it could prove a big step towards UK withdrawal from the EU. However, the bigger question is whether the agreement reached at the summit will do anything to address the fundamentals of the euro crisis. 
The French learn followership thumbnail

The French learn followership

30 November 2011
France is backing Germany’s wish for a new treaty to enshrine strict budgetary discipline. In exchange, it hopes Germany will save the euro.