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In Europe

ireland

In Europe 16th December 2015

Bailed-out countries: Ireland’s strange miracle and Portugal’s debt-depopulation spiral

The blog RWER recently published a very interesting article about Ireland. It tells the tale of an economic miracle, which no-one has been able to figure out yet. And it raises doubts that can well apply in Spain’s case. And Krugman has written an inspiring post about the possible perverse relationship between debt and the decline in Portugal’s population, which could call into question the theory of Optimal Monetary Areas.

cameron

In Europe 15th December 2015

Cameron decides to play with fire and risks being burnt

Although there is still no date set for the referendum on whether the UK withdraws or not from the European Union, it’s looking very much like this could take place in October 2016. Prime Minister David Cameron has said his intention is not to abandon the EU, but rather reshape its ties with Britain. But key analysts think his strategy could be risky and, in the end, go against him and jeopardise his political future.

euro greece

In Europe 15th December 2015

Regling and Wieser: The key points

The Agora via Macropolis |  Two of the key participants in Greece’s financing programme, the European Stability Mechanism’s Klaus Regling and the head of the Eurogroup Working Group Thomas Wieser, gave interviews to two Greek Sunday newspapers in which they covered a wide range of issues relating to the latest developments in Greece.

central banks

In Europe 15th December 2015

Europe’s Chance to Get Deposit Insurance Right

Guntram B. Wolff via Caixin | The European Commission recently presented its proposals for European bank deposit insurance. Officials hope to stabilize the banking system and decouple bank financing costs from any solvency issues affecting their host states. This would achieve the original aim of a proposed banking union by breaking the link between states and their banking systems.

France.target

In Europe 14th December 2015

A French Assessment Of NGDP Targeting Misses The Point

James Alexander via Historinhas| The Committee on Economic and Monetary Affairs of the European Parliament recently held a session on NGDP Targeting. The French paper starts with a review of the literature on Inflation Targeting and says things went well until the crisis. A caveat they mention is that since both IT regimes and non-IT regimes did well in bringing down inflation it is really too hard to tell if IT was all that superior.

refugees

In Europe 10th December 2015

Greece A Gateway And Scapegoat In EU’s Refugee Crisis

Nick Malkoutzis via Macropolis | Greece activated last Thursday the European Union Civil Protection Mechanism, agreed to allow Frontex to operate on its border with the Former Yugoslav Republic of Macedonia (FYROM) and triggered the Rapid Border Intervention Teams (RABIT) mechanism for help with Aegean patrols. But what should have been a moment of exemplary cooperation for the EU felt very tawdry.

Eurozone

In Europe 10th December 2015

Who Has To Do What In Europe

Together with growth forecasts for the EU, ranging from 1.9% to 2% in 2016 and rising to 2.1% in 2017, the European Comission recently mentioned in its annual growth survey the possibility of making the Stability Pact more flexible. They also highlighted the main macro imbalances of each member state.

 

 

 

spain italy

In Europe 7th December 2015

Good NGDP News From Spain And Even Italy

James Alexander via Historinhas | While we firmly believe NGDP expectations are the best guide to monetary policy we are still some way from having a proper market measure of those expectations. However, two of the peripheral countries, Spain and Italy have now produced their first estimate of NGDP for 3Q.

inflacion precios1

In Europe 4th December 2015

Common Inflation, The Only Reasonable Way Out For The Eurozone

Countries in the North don’t even want to talk about creating more inflation to help those in the South. Why should we, they say, if they are the debtors? Could they be persuaded that it is in their interests, given that the alternative could be default and the collapse of the eurzone economy and the euro? For the time being, they have allowed the ECB to work on moving away from zero inflation, but not beyond the 2% limit. And even this limit is not expected to be reached until 2017.