Nick Ottens (Atlantic Sentinel) | Few parties are willing to give the liberal prime ministers a fourth term. Revelations that his outgoing government deliberately withheld information from parliament have made it even harder for Prime Minister Mark Rutte, in power since 2010, to form a new government in the Netherlands.
Mutuactivos | How would you react to an inflation figure of 4.1%, albeit temporary? In short, we believe that it could push the T-note above 2% temporarily, even a scare in the markets, but in that case it is likely that the Fed would try to influence it to moderate it: either by changing its “active passive” discourse to one of greater involvement, closer to that of the ECB, or directly by buying debt to control the yield curve.
The German Constitutional Court has unblocked Germany’s ratification of the Next Generation EU, the €750 billion European recovery fund with which the Union aims to boost the European economy. The German TC has dismissed the appeal lodged by a group of German citizens because it considers that the consequences of the preliminary blockage would be more serious if it were subsequently declared constitutional than if it were to go ahead and eventually be found to be unconstitutional.
Fernando Alberca | Turkey’s central bank has announced that, as of 30 April, all bitcoin payments and exchanges of cryptocurrencies to fiat currencies will be illegal. This will prohibit “any direct or indirect use of cryptoassets in payment services and the issuance of electronic money”.
Javier García Arenas and Adrià Morron Salmeron (CaixaBank ) | The independence of central banks seems indisputable, even more so in these times of pandemic, in which they have increased their use of unconventional policies and provided coverage for the high funding needs of states. In this article we will explore the theory and empirical evidence supporting the importance for central banks to maintain their independence.
Timothy Hamilton via The Conversation | The European Union is considering a new tax on imports as it tries to fight climate change, and the U.S. is raising concerns about it. At issue is what’s known as a border adjustment carbon tax. The tax is designed to level the playing field for European companies by holding imports responsible for their greenhouse gas emissions the same way domestically produced products are.
By Hans-Georg Betz | The COVID-19 pandemic has not only brutally exposed Europe’s unpreparedness to confront a major crisis, but it has also shown the parochial state of mind of significant parts of the European population. Much has been written over the past year about American science skepticism and conspiracy theories, held partly responsible for the toll that COVID-19 has taken on the US population. Yet Europeans are hardly any better.
Alphavalue | The boards of Veolia Environment and Suez have reached an agreement on the companies’ merger. After months of confrontation, Veolia will launch a takeover bid for Suez. In a statement, the two firms said the price of the bid will be 20.5 €/share, valuing Suez at 12.9 billion euros. This is an improvement of 13.9% on the 18 €/share that Veolia had proposed up until now and which was one of the main blocking points for the deal. Suez had set a price of €22/share as a condition.
Rafael Domenech & Jorge Sicilia (BBVA Research) | The empírical evidence for a large sample of countries at different stages of development since 1960 to the present shows that an increase of 10 percentage points in the ratio of private investment to GDP corresponds to an increase of 3.1 points in the long-term growth rate of per capita income, higher than the elasticity of 2.7 obtained between total investment and growth. The empirical evidence points to private investment being typically allocated more efficiently than public investment, indicating that the best strategy is for public investment to be complementary and incentivize higher private investment.We see this as evidence that the focus of policies oriented to providing fiscal stimulus to incentivize private investment, such as the European Fund NGEU as an adequate strategy to increase per capita income growth in the long term in European economies.
Kiran Bowry | In 2015, the European refugee crisis awoke Germans from a long and comforting slumber that Angela Merkel had lulled them into with her political style. The term “asymmetric demobilization” came to be known as a way of describing the German chancellor’s shrewd strategy of sitting on the fence and thereby winning elections. Merkel weakened her political competitors by avoiding controversial issues and, in doing so, choking off debate. Simultaneously, she adopted popular policy stances of her opponents and demobilized their potential voters.