Thursday , February 25 2021
Home / Tag Archives: recovery

Tag Archives: recovery

Happy New Year?

A recovery from the COVID-19 recession is underway though the suffering is far from over, especially for the most vulnerable. Inequality is both a consequence of the pandemic and a cause of its severity. Many countries need comprehensive policy change to address its worst effects. At the end of a tragic year marked by pandemic and increased poverty, the miraculously rapid arrival of vaccines stirs great hope. The COVID-19 recession will be remembered as one of unprecedented severity but also,...

Read More »

Euro area accession countries in the context of the pandemic

Testimony before the European Parliament on the subject of euro area accession. By: Zsolt Darvas Date: November 19, 2020 Topic: European Macroeconomics & Governance On November 19th, 2020 Bruegel senior fellow Zsolt Darvas gave a presentation and participated in the discussion with MEPs on ‘Euro area accession countries in the context of the pandemic’, at the meeting of the Euro Accession Countries Working Group of the European Parliament’s Committee on Economic and Monetary...

Read More »

The pandemic will structurally change the global economy more than we think

It is time to rethink many of the basic principles of our economic model to mitigate the impacts of the COVID-19 pandemic. Those who say there are no letters left in the alphabet to describe the evolution of the world economy after the pandemic are absolutely right. It is abundantly clear now that we cannot expect to see a rapid V-shaped recovery — nor should we expect a complete stagnation or a L-shaped recovery. The square root-shaped economy The newest version of recovery, the K-shape,...

Read More »

Will European Union countries be able to absorb and spend well the bloc’s recovery funding?

To help finance the post-coronavirus recovery, the European Union is raising large amounts to pass on to its members. But absorption of EU funds is typically slow and some countries might struggle to spend what they can get, even if they will have broad freedom to design spending programmes. The focus should be on worthwhile spending, not just on absorbing EU funds. By: Zsolt Darvas Date: September 24, 2020 Topic: European Macroeconomics & Governance The European Union’s...

Read More »

The EU’s Opportunity to Turn Its Markets Toward the Future

Meeting the fiscal demands of COVID-19 will require the European Union to borrow on capital markets more than ever, and for European pension funds and households to look more widely for ways to build their nest eggs safely. The EU should take the challenges of the pandemic and Brexit as a chance to get its financial infrastructure house in order. By: Rebecca Christie Date: July 16, 2020 Topic: European Macroeconomics & Governance This article is based on a version first...

Read More »

The EU’s recovery fund proposals: crisis relief with massive redistribution

Poorer European Union countries and those hardest hit economically by the COVID-19 crisis could obtain up to 15% of their GNI in grants and guarantees from the EU’s proposed recovery instruments. Yet the proposal would represent a net benefit for all EU countries, even if there is only a small positive economic impact over the long-term. The proposed very long-maturity loans would lead to non-negligible benefits, exceeding 1% of GDP for some countries. When European leaders convene this...

Read More »

Three-quarters of Next Generation EU payments will have to wait until 2023

Because of hurdles in designing, approving and implementing European Union programmes, less than a quarter of the €438 billion in grants planned under the new EU recovery instruments is expected to be spent in the next two and a half years, when recovery needs will be greatest. Well-functioning financial markets can help bridge the gap between urgent spending needs and late-arriving EU disbursements, but more effort is needed to frontload EU payments. The falling government bond yields of...

Read More »

An uncompromising budget

Apart from decisive European Central Bank measures, the EU-wide response to the COVID crisis had been rather weak until the Commission put on the table a drastically new proposal: the creation of a new recovery facility, ‘Next Generation EU’, that would borrow money in the name of the EU to finance EU-wide expenditures. The changes to the proposed standard seven-year budget that primarily focuses on long-term structural issues are however generally small, and funding reductions are...

Read More »

Reading tea leaves from China’s two sessions: Large monetary and fiscal stimulus and still no growth guarantee

The announcement of a large stimulus without a growth target indicates that China’s recovery is far from complete. It was hard to think of a more important gathering than last week’s ‘Two Sessions’, during which Chinese political leaders were to guide all of us as to the way ahead for the Chinese economy. While this yearly event is always important, this year’s was crucial. 2020 marks the end of two key cycles of economic planning: the current Five-Year Plan, and the end of the 10-year period...

Read More »