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Tag Archives: Debt

Indebted societies: How private borrowing has become a substitute for social policy in rich democracies

When citizens encounter financial difficulties, they often turn to private borrowing on credit markets. As Andreas Wiedemann explains, this form of borrowing now increasingly acts as a support mechanism that complements the welfare state in rich democracies. But while credit markets and welfare states appear to fulfil similar functions, they follow different underlying logics, each with their own socio-economic and political consequences that shape and amplify insecurities,...

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How is the G20 tackling debt problems of the poorest countries?

The G20 Debt Service Standstill Initiative, although a partial success, has been dogged by competing interests and lack of coordination. A further push is needed to solve the coordination problem. In April 2020, the G20, at the urging of the International Monetary Fund and the World Bank, launched the Debt Service Standstill Initiative (DSSI) to mitigate the negative financial impact of COVID-19 in the world’s poorest countries at a time when the pandemic’s medical and economic consequences...

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La dette : une obsession prématurée

Ce qui est malsain, avec la proposition d’annuler la dette, c’est le déni de réalité consistant à affirmer que l’Etat peut effacer une partie de ses engagements sans que cela ne coûte à personne. By: Jean Pisani-Ferry Date: February 22, 2021 Topic: European Macroeconomics & Governance This opinion piece was originally published in Le Monde. En arrivant à la Maison Blanche, Joe Biden a trouvé une dette publique de 27.000 milliards de dollars et un déficit public de 3600...

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Thinking big: debt management considerations for the EU’s pandemic borrowing plan

If not handled correctly, the European Union’s transition to take on a new role as an issuer of public debt risks crowding out existing markets. Managing that transition correctly is almost as big a challenge as spending the money itself. By: Rebecca Christie Date: December 9, 2020 Topic: European Macroeconomics & Governance The COVID-19 crisis is set to propel the European Union for many years to come into a role its members had not anticipated: significant issuer of public...

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Growth uncertainty, European Central Bank intervention and the Italian debt

European Central Bank intervention provides a buffer against the uncertainty faced by European Union economies in the face of COVID-19. For the time being, this intervention has alleviated concern about Italy's debt, but without it Italy is vulnerable to a debt crisis. In the face of the challenges posed by the COVID-19 pandemic, the European Central Bank declared on 18 March 2020 that it “will not tolerate any risks to the smooth transmission of its monetary policy”. In this context, it...

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Britain’s got bills – but will it pay? Settling the UK’s EU budget obligations

Please read our comments policy before commenting. Note: A version of this article first appeared at The UK in a Changing Europe / LSE Brexit. The article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics. Featured image via joe.co.uk.   _________________________________ About the author Iain Begg – LSE, European InstituteIain Begg is a Professorial Research Fellow at the European Institute, London School of...

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You can’t get it all: Italy’s public finances

The Italian government will present its public finance projections by 10 April. Lorenzo Codogno writes that fiscal policy is expected to be strongly expansionary in 2016, but courtesy of flexibility clauses, the government will likely avoid entering into the EU’s so called ‘Excessive Deficit Procedure’ in May. He argues however that a fiscal problem looms large in 2017, while Italy’s reduction of its debt-to-GDP ratio remains fragile and subject to external shocks. By 10 April, the Italian...

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Raise the Roof: Why the Debt Ceiling Is Hurting America

In what has become a regular spectacle in American political theater, the US Congress last week arrived at yet another 11th-hour compromise to avoid hitting the country’s debt ceiling and defaulting on its debts. Yet even as another deal is reached, it’s confidence in the country’s political system—and ultimately its standing as a global economic leader—that gets compromised. Washington’s debt limit debacle is so regularly-scheduled, in fact, it’s worth revisiting last year’s research from...

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Ancient Greece is where Western civilisation began, and modern Greece is where it ends

Is the Greek debt crisis simply an isolated case or could similar debt problems develop in other countries across Europe and the rest of the world? Michael Ben-Gad writes that while it is easy to find examples of mismanagement and clientelistic behaviour in Greek society, it would be dangerous to regard the crisis as unique to Greece. He argues that with rapid aging and an unwillingness to adjust levels of spending to match new demographic realities, there is the clear potential for debt...

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Germany Should End Austerity, Not Ireland

Germany Should End Austerity, Not Ireland Anti-austerity fever is sweeping Europe as policy makers decide the way to get from crisis to growth involves higher spending. Well, not so fast. The fever has already spread to the highest levels. At the International Monetary Fund’s recent spring meetings in Washington, IMF Managing Director Christine Lagarde and her deputy, David Lipton, repeatedly urged euro-area countries to focus on investment rather than budget cuts. Then came the...

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