Eurozone finance ministers reached a preliminary agreement on a reform of the European Stability Mechanism in June, but failed to conclude it last week. The reform is now set to be discussed during the European Council meeting on 12-13 December. Shahin Vallée, Jérémie Cohen-Setton, Paul De Grauwe and Sebastian Dullien write that the proposal should not be endorsed in […]
Financial crises play a key role in changing existing policies concerning financial markets and institutions. Orkun Saka, Nauro Campos, Paul De Grauwe, Yuemei Ji and Angelo Martelli provide new evidence for the negative impact of financial crises on the process of financial liberalisation. They also show that such interventions are only temporary and that the liberalisation process restarts quickly […]
The European Central Bank was established 20 years ago today on 1 June 1998. To mark the anniversary, we asked five academics to give their views on the lessons learned from two decades of the ECB, and their predictions on what might lie in store for both the ECB and the euro over the next 20 years.
Paul De […]
In GDP terms, the Russian economy is much smaller than that of the EU, yet from a political and military perspective, Russia is a major player in global affairs. Paul De Grauwe argues that Europe grants Russia this power by leaving defence as a matter for each of its constituent nations, instead of having a combined army.
Moscow, Credit: greg westfall (CC BY 2.0)
A few […]
Many observers now expect the Catalan government to make a declaration of independence following the 1 October referendum, but what implications would there be for Catalonia if it did become independent? Paul De Grauwe argues that there are parallels between the Catalan independence movement and other forms of nationalism in Europe. He suggests that such political movements present a […]
From Brexit to the presidential campaign of Donald Trump, it has become common to speak of citizens turning against globalisation. But does popular opposition to globalisation justify rolling back on processes aimed at facilitating free trade? Paul De Grauwe argues that free trade has generated substantial benefits for a large number of people across the world, but at present […]
What should the EU’s priorities be in negotiations with the UK over Brexit? Paul De Grauwe writes that the EU should offer the UK two options: either following a Norwegian style model or leaving entirely and negotiating a free trade agreement in the same manner as other nations such as the United States and Canada. He argues that offering any […]
How far does the UK’s draft renegotiation proposal go in reforming the country’s EU membership? Paul De Grauwe writes that the deal is largely an exercise in keeping up appearances, with most of the agreed terms making little substantive difference to the UK’s terms of membership. He argues that rather than pretending to have achieved real reform, Cameron should […]
Greece and its creditors have been engaged in a two-month standoff over the release of further financial assistance to the country. Lorenzo Codogno and Paul De Grauwe write that with no agreement yet reached, the possibility of Greece leaving the euro has now become real. They argue that the only solution to the crisis is for both sides to […]
Following Switzerland’s announcement in January that it would no longer hold the Swiss franc at a fixed exchange rate with the euro, Denmark has faced mounting speculation that it will follow suit and abandon its euro peg. Lorenzo Codogno and Paul De Grauwe write that there is a paradox in the approach of Denmark to the issue: the Danish […]
On 25 January Greece will hold parliamentary elections. The elections have generated uncertainty in the Eurozone given the potential for the radical left party Syriza, which has called for a renegotiation of the country’s bailout conditions, to emerge as the largest party. Paul De Grauwe writes that even if Syriza fails to win power in the upcoming elections, the […]
Why the European Court of Justice should reject the German Constitutional Court’s ruling on Outright Monetary Transactions
Despite having a positive effect on the economic situation within the Eurozone, the European Central Bank’s Outright Monetary Transactions (OMT) program has proved controversial, with the German Constitutional Court in Karlsruhe recently deeming it illegal under EU law. Paul De Grauwe argues that the ruling reflects a serious misunderstanding of central banking on the part of the German Court, and […]
The connection between fiscal and monetary policy is currently under scrutiny by the German Constitutional Court in the context of the European Central Bank’s (ECB) Outright Monetary Transactions bond-buying programme. Paul De Grauwe and Yuemei Ji argue that most analyses are deeply flawed by the misapplication of private-company default principles to the central bank. ECB bond-buying transforms public bonds into […]
Today EUROPP launches the first episode in our new voxEUROPP series of podcasts. Presented by Chris Gilson and Stuart A Brown voxEUROPP draws on academic experts from EUROPP to discuss the latest issues across European governance, economics, politics, culture and society, both at the European Union and national levels.
Podcast 1: The Rise of the Far Right
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This month the eurozone returned to recession, three years after it emerged from the deep recession of 2008-09. Paul De Grauwe argues that the current situation has been produced by policy failures at the beginning of the crisis. The best initial policy would have been for the eurozone’s creditor countries to increase spending, while the struggling periphery countries implemented austerity […]
The ECB was right to intervene as lender of last resort, but structural reforms are still needed to save the Eurozone.
Last week the President of the European Central Bank (ECB), Mario Draghi, announced that the ECB would become the Eurozone’s lender of last resort by starting to purchase the sovereign bonds of the area’s stricken economies. Paul de Grauwe addresses two major criticisms of the plan, saying that while this intervention was absolutely necessary, it alone is not enough to […]
Government bond markets in Europe remain volatile, with Spanish and Italian bond rates at near unsustainable levels. Paul De Grauwe argues that the only institution that can stabilize these markets by buying government bonds is the European Central Bank (ECB). The ECB must now overcome its risk averse nature and take advantage of its virtually infinite resources to help to […]
As the Eurozone hangs on the precipice, the European Commission and the ECB must take swift action to remedy Europe’s deflationary spiral
The seeds of the current crisis were sown nearly twenty years ago when European leaders agreed to create a currency without a country. Now, the Eurozone is split in two, with the creditor countries of the north able to borrow at next to zero interest rates, and those of the south facing massive deficits and economic instability. But both face […]
The European Central Bank has delegated its lender of last resort duty to panicky bankers who are the slaves of market sentiments. Pumping in over 1,000 billion Euros this way has not stabilized Europe’s sovereign debt markets.
Since December 2011 the European Central Bank (ECB) has pumped two waves of extra liquidity into the European banking system, in an effort to keep it afloat – and persuade backs to invest in sovereign debt. Yet Paul De Grauwe argues that these banks are still wracked with uncertainty, which may lead to further sell-offs of this debt – the […]