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Europe’s Apollo 11 will not be about the moon

The European Green Deal has an ambitious double target to “reconcile the economy with the planet” and to become Europe’s “new growth strategy”.“This is Europe’s ‘man on the moon’ moment.” These are the bold words used by European Commission president Ursula von der Leyen 11 days into her job as she presented her plan for a ‘European Green Deal’ aimed at creating the first climate-neutral continent by 2050.The plan includes 50 ideas, spanning from carbon pricing to green investments, from just...

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Appellate Body Politic

This week, the WTO's Appellate Body, the dispute settlement body, became inoperational: it no longer has the necessary number of judges to render verdicts. What does this mean for international trade and multilateralism? Are we now living in a world without dispute settlement? This week, Guntram Wolff is joined by Alan Beattie, the author of the FT's new Trade Secrets newsletter, and Alicia García-Herrero to discuss the crisis of the Appellate Body. By: The Sound of Economics Date: December...

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Japanese economy: Déjà vu – but worse

It is difficult to imagine how Japan can undertake any major economic reform if it has taken five years to increase the consumption tax and has needed two strong fiscal packages.Since Prime Minister Shinzo Abe came to power in 2012, Japan’s economic recovery has been hinging on his three key economic policies (the so-called three “arrows” of Abenomics) bearing fruit. The first, and best known, arrow is monetary policy, which has been used massively through quantitative easing as well as the...

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A new look at net balances in the European Union’s next multiannual budget

Whenever the European Union’s budget is discussed, much of the political focus is on net balances – whether countries pay in more than they receive – rather than on the broader overall positive effects of EU spending. The largest net contributor countries have sought to limit their contributions, leading to the build-up of an ad-hoc, complex, opaque and regressive system of revenue corrections. By: Zsolt Darvas Date: December 12, 2019 Topic: European Macroeconomics & Governance...

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Watch out for China’s currency in case of no-deal scenario

The U.S. and China’s negotiations on a phase-one deal seem to have stalled again. The market was already aware of the limited nature of the likely deal, but was still hoping for it. Against this backdrop, the investors have reacted negatively to the increased likelihood of not reaching a deal on December 15. If this is the case, the U.S. will apply additional tariffs on Chinese imports. The obvious question to address, thus, is, what can happen to China under such a scenario?We first need to...

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Bridging the divide: new evidence about firms and digitalisation

Small European firms are falling behind in the race to digitalise, but so are their American counterparts. By: Reinhilde Veugelers Date: December 11, 2019 Topic: Innovation & Competition Policy Using new evidence on the digitalisation activities of firms in the European Union and the United States, we document a trend towards digital polarisation based on firms’ use of the latest digital technologies and their plans for future investment in digitalisation. A substantial share of...

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Getting post-Brexit trade deals done

The UK goes to the polls on Thursday to decide who (and if) they want to "get Brexit done". But, as soon as Britain leaves, it will have 11 months to agree a trade deal with the EU. Is it possible? Nicholas Barrett is joined by Maria Demertzis and Niclas Poitiers to discuss post-Brexit trade deals with the EU and the USA. By: The Sound of Economics Date: December 10, 2019 Topic: European Macroeconomics & Governance

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The European Green Deal needs a reformed fiscal framework

The European Green Deal should include a sustainable investment strategy that will help citizens change behaviour and companies switch technologies. But to finance it, the EU will have to increase the flexibility of its fiscal rules to encourage member states to invest in the transition.The European Commission is set to present the outline of its European Green Deal plan. As discussed in our recent paper, the plan should include a sustainable investment strategy that will help companies...

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Non-performing loans’ legacy versus secondary markets

Eleven years since the start of Europe’s financial crisis, and the legacy of non-performing loans in the EU, though much smaller, is still a live issue for some member states.No doubt success has been achieved as the asset quality of banks in the EU area has improved reaching 3% as of June 2019 (EBA Risk Dashboard – Q2 2019), compared with its peak of approximately 7.5% in 2012 (EBF). The total stock of NPLs held by the banks reduced to EUR 636bn as of June 2019 (EBA Risk Dashboard – Q2...

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