EU institutions

Richard Tol, 27 September 2016

The UK may opt to leave the EU Emissions Trading System. This column argues that as the UK is a large importer of emission permits, this would make meeting its climate policy targets much harder and dearer, and would remove the legal standing of many permits circulating in the rest of the EU. Some non-EU countries do take part in the Emissions Trading System, and this appears to be the best option for the UK post-Brexit. If not, the UK Government will be forced into a major overhaul of its climate policy.

Pasquale D'Apice, 13 September 2016

There has been renewed interest in economic analysis of the EU budget following the Global Crisis. This column presents new calculations of cross-border flows operated through the EU budget and compares them with those estimated for the US. For each euro paid by an average net (EU member state) contributor, approximately 75 cents return through the EU budget, and 25 cents cross a border. At the margin, the US federal budget is less redistributive in normal times, with around 90 cents per dollar returning to the contributing state, but net cross-border fiscal flows in the US increased steeply in the wake of the Global Crisis, financed by federal borrowing.

Marco Buti, Muriel Lacoue-Labarthe, 07 September 2016

The Eurozone Crisis has taken a significant toll – both economic and political – on EU member states as well as the Union as a whole. This column identifies three elements that are key to a working solution for continued union: overcoming the intergovernmental method that has dominated EU decision‑making since the crisis, avoiding the seemingly easy route of blaming all evils on ‘Brussels’, and a more unified external representation in global economic governance.

Sylvester Eijffinger, 31 August 2016

The ECB is under fire from all sides for its inability to stimulate Europe's economies. This column puts the case for an informal European ‘praesidium’ within the Eurogroup to coordinate wider stimulus and reform measures. This will inevitably lead to the appointment of a European finance minister – the Eurozone's equivalent of Alexander Hamilton, the first Treasury Secretary in the history of the US.

Marco Buti, José Leandro, Plamen Nikolov, 25 August 2016

The fragmentation of financial systems along national borders was one of the main handicaps of the Eurozone both prior to and in the initial phase of the crisis,  hindering the shock absorption capacity of individual member states. The EU has taken important steps towards the deeper integration of Eurozone financial markets, but this remains incomplete. This column argues that a fully-fledged financial union can be an efficient economic shock absorber. Compared to the US, there is significant potential in terms of private cross-border risk sharing through the financial channel, more so than through fiscal (i.e. public) means.

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