JOHN BRUTON | With a refugee crisis, a banking union and the prospect of a Brexit, the European Union is faced with a host of questions. The situation was described at the EPP Congress as the “most serious crisis for the European Union since its creation.” This is not an exaggeration.
Compared to the US, Switzerland has been a low inflation country, but the recent turn to deflation smacks a lot of too low NGDP growth.
PARIS | Francesco Saraceno | I was puzzled by Daniel Gros’ recent Project Syndicate piece, in which he claims that Germany’s dominance of the EMU may be coming to an end. Gros’ argument is based on two facts. The first is the slowing growth rate of Germany; the second, more geo-political, is the lack of willingness (or of capacity) to manage, the crises that face the EU (in particular the refugees crisis).
James Alexander via Historinhas | Yet again today we saw the “zero (long and variable) lags” in monetary policy. Central bankers moving markets and thus changing NGDP Expectations happens all the time. It’s perfectly rational too.
Indeed, the ECB can go further. Draghi broke the discipline again by skilfully taking advantage of a dull reference in the communiqué to the ECB’s intention to study all potential possibilities should the need arise.
Nick Malkoutzis via Macropolis | Bickering, confusion, delayed decisions on voting procedure, a temporary truce and a camper van: This is more or less the sum total of what the New Democracy leadership race has produced so far.
Markets are trying to glean any hint about whether or not the ECB will confirm additional stimulus during its monthly meeting today. Most analysts forecast a QE reinforcement in quantity, as well as in term, before year-end or in 2016. But there is also a minority who bet on the central bank just adding corporate debt to the cocktail.
Iceland, as any other country, needs investment, i.a. in infrastructure and that will partly have to be financed by foreign loans. So who is then left to finance it? The Chinese, as the British government is so enthusiastic about.
France has become the Sweden of the 1970s. Both right and left governments have allowed public spending in France, as a proportion of GDP, to exceed that of Sweden at its most critical period.
Fernando Barciela | The central bank has put QE in place, a trillion euros asset purchase programme, but inflation has returned to negative territory. Has the ECB’s strategy failed? Are critics right when they say it does too little, too late.