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Tag Archives: fiscal policy

The message in the ruling

The German Constitutional Court's ruling on the ECB's asset purchase programme is open to much criticism but it can hardly be blamed for raising an important question. By: Jean Pisani-Ferry Date: May 12, 2020 Topic: European Macroeconomics & Governance From its pretence to establish itself as a custodian of the custodians to the narrowness of its perspective on central bank policy and the parochial assessment of the distributional consequences of monetary decisions, there is...

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COVID-19: The self-employed are hardest hit and least supported

Self-employed workers are hardest-hit by COVID-19 lockdowns. Yet they often receive less government support than salaried employees. Is the disparity justified? By: Julia Anderson Date: April 8, 2020 Topic: European Macroeconomics & Governance Government support packages to help workers endure the disruptions caused by COVID-19 are ostensibly generous but often discriminatory. In many countries, self-employed workers receive less support than salaried employees. In the...

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A temporary, common fiscal stimulus to answer the mayhem of COVID-19

We are not in normal times and we have to surpass, albeit only for the duration of the COVID-19 shock, the hurdles that did not allow the euro-area to endow itself of a common fiscal policy. By: Francesco Papadia Date: April 2, 2020 Topic: European Macroeconomics & Governance A drawback in the design of the euro-area is that we have complete monetary union but no fiscal union, as conclusively argued in the five presidents report of June 2015[1]. In normal times, it has not...

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Will the economic strategy work?

Because even thriving companies can be killed in a matter of weeks by a recession of the magnitude now confronting the world, advanced-economy governments have reacted in a remarkably similar fashion to the COVID-19 crisis. But extending liquidity lifelines to private businesses and supporting idled workers assumes a short crisis. By: Jean Pisani-Ferry Date: April 1, 2020 Topic: European Macroeconomics & Governance With the COVID-19 crisis bringing France to a halt, Insee,...

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The fiscal consequences of the pandemic

The likely economic depression triggered by coronavirus will pose a serious fiscal challenge to some euro-area countries. Given the special circumstances of the pandemic, a European solution is needed, involving more European Central Bank purchases, a significantly increased European Stability Mechanism and some degree of mutualisation of the pandemic-related economic costs. By: Zsolt Darvas Date: March 30, 2020 Topic: European Macroeconomics & Governance Countries inside and...

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COVID-19 Fiscal response: What are the options for the EU Council?

It is time for the EU Council to make quick progress on the fiscal front and announce something as soon as possible to show that it taken full measure of the severity of the situation. As the COVID-19 pandemic intensifies, and now that Europe has become one of its epicentres, voices are raised among EU countries in support of a common and significant European response to deal with the health situation and the related economic crisis currently unfolding. Many options are currently discussed in...

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Coronavirus and the politics of a common fiscal instrument

Coronavirus means many European Union countries will soon face major increases in their sovereign debt burdens, exacerbated by the sudden collapse of economic activity. What should the European Union do to address these debt problems? The economic challenge arising from the coronavirus crisis has multiple facets, including a supply-side shock, huge drops in demand and liquidity issues. Debt is a major challenge. Many European Union countries will soon face big increases in their nominal...

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What should be done to reduce euro-area spreads?

Spreads are rising again in the euro-area at the worst possible time, when fiscal policy is needed to fight the coronavirus pandemic and the related economic shock. This blog post reviews the main options available to European policymakers, their feasibility and potential effectiveness to deal with this issue. By: Grégory Claeys Date: March 18, 2020 Topic: European Macroeconomics & Governance As a result of an unfortunate declaration by European Central Bank President...

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How can the EU prevent our economies from shutting down?

From flights cancelled and restaurants closed to companies either slowing or stopping their production, COVID-19 is shutting our economies down. How can the EU reboot them? What should be our fiscal and monetary response to the pandemic? Will our economic system ever be the same once everything is over? This week, Guntram Wolff is joined by Jean Pisani-Ferry and Maria Demertzis to discuss the EU's response to the coronavirus. By: The Sound of Economics Date: March 18, 2020 Topic:...

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The European coronavirus response must be a solution, not more stigma

Lagarde needs a different bazooka in responding to a natural disaster like COVID-19. By: Rebecca Christie Date: March 18, 2020 Topic: European Macroeconomics & Governance When European Central Bank President Christine Lagarde said that closing sovereign borrowing spreads wasn’t her job, she was fighting the last war. The financial challenge posed by the coronavirus will require the European Union to jettison the rescue model developed in its debt crisis in favor of aid...

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