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Tag Archives: European Macroeconomics & Governance

The double irony of the new UK-EU trade relationship

The Trade and Cooperation Agreement signed between the European Union and the United Kingdom goes against six decades of UK efforts to avoid being economically disadvantaged in Europe. Tracking the evolution of the EU-UK relationship over the last 60 years can help in understanding this. By: André Sapir Date: January 12, 2021 Topic: European Macroeconomics & Governance On 1 January 2021, the United Kingdom left both the European customs union and the single market. Its trade...

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Corporate insolvencies during COVID-19: keeping calm before the storm

Measures in major economies have protected companies from COVID-19 related insolvency, but have also protected weak firms. Nevertheless, support should remain as long as necessary, while cumbersome insolvency processes should be reformed for the long term. Historically, economic downturns are associated with increases in business insolvencies. Figure 1 shows that during the Great Financial Crisis, insolvencies increased, but in the current, deeper recession, such an increase has not (yet)...

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The productivity paradox: policy lessons from MICROPROD

The objective of MICROPROD, an EU-wide research project that runs until the end of 2021, is to understand what is driving the current productivity slowdown and what the potential consequences are for Europe's economic model and its citizens’ welfare. This Policy Contribution summarises the main, policy-relevant conclusions of the 20 MICROPROD papers delivered so far. This Policy Contribution is an output from the MICROPROD project, which received funding from the European Union’s Horizon...

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When the future changes the past: fiscal indicator revisions

The 2020 pandemic economic shock has led to reassessment of fiscal policy measures in 2018 and earlier, because of faulty measurement of unobserved output gaps and structural balances. The current period of suspension of EU fiscal rules should be used to design a better fiscal framework. By: Zsolt Darvas Date: January 5, 2021 Topic: European Macroeconomics & Governance The COVID-19 pandemic and the subsequent economic distress caught everyone by surprise. In late 2019,...

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Regulation in the era of matchmaking economics

New approaches and new tools are needed to prevent excessive concentration of economic power in the hands of a few matchmaking digital platforms that form multi-sided markets. Regulation in this area is only just emerging. By: Maria Demertzis Date: January 5, 2021 Topic: European Macroeconomics & Governance This piece was originally published in the Money Review section of Kathimerini. The best characterisation I have heard of the economic role of digital platforms is that...

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The year that tested us all

By: The Sound of Economics Date: December 21, 2020 Topic: European Macroeconomics & Governance As the year draws to a close, Giuseppe Porcaro invites Maria Demertzis, André Sapir and Guntram Wolff to review this eventful year in economic policy and beyond. The guests also talk about a book that has marked them this year and finally, their hopes and wishes for the decade ahead. Events mentioned: Monetary policy after the pandemic, with Janet Yellen Together for Europe’s...

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Are we out of the woods yet?

The return to normal may just have to wait. By: Maria Demertzis Date: December 14, 2020 Topic: European Macroeconomics & Governance This opinion piece was originally published on Kathimerini. Finally, the vaccine is here. Stock markets have reacted exuberantly and we can see the light at the end of the tunnel. The confinement and isolation that have weighed on old and young alike will come to an end and the economy can rebound back from its semi-comatose state. We can then...

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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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COVID-19 has widened the income gap in Europe

Workers with low-educational levels suffered far worse than others in terms of COVID-19 related job losses during the first half of 2020 in the EU. Jobs for tertiary-educated workers even increased. Thus, the pandemic has increased income inequality, reinforcing the case for inclusive development. By: Zsolt Darvas Date: December 3, 2020 Topic: European Macroeconomics & Governance Though COVID-19 caught almost everyone by surprise, the inequality it has brought in its wake...

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