EU policies

Wouter den Haan, Martin Ellison, Ethan Ilzetzki, Michael McMahon, Ricardo Reis, 20 September 2017

The European Commission president’s suggestion that joining the euro should be compulsory for all EU members is not well received by over three quarters of leading economists responding to the latest Centre for Macroeconomics and CEPR survey. This column also reveals how, when asked a broader question about the success of the common currency, half the experts think it has had more benefits than costs, while only a quarter think the opposite. The majority view is that there have been significant benefits, but the way the Eurozone has been operated has also imposed significant costs.

Vítor Constâncio, Philipp Hartmann, Peter McAdam, 23 August 2017

The European Central Bank’s 2017 Sintra Forum on Central Banking built a bridge from the currently strengthening recovery in Europe to longer-term growth issues for, and structural change in, advanced economies. In this column the organisers highlight some of the main points from the discussions, including what the sources of weak productivity and investment are and what type of economic polarisation tendencies the new growth model seems to be associated with.

Jacques Bughin, Jan Mischke, 04 August 2017

The economic narrative of the EU since the Global Crisis has focused on successive debt crises and persistent stagnation. This column addresses the accompanying, but less well studied, investment slump that occurred over the last decade, using evidence from an extensive survey of business decisionmakers across Europe. Business sentiment towards increased investment is affected not just by historic cash flows and expected future demand, but also the growth of digital economies as well as political concerns such as anti-Europe sentiment.

Marco Buti, Servaas Deroose, José Leandro, Gabriele Giudice, 13 July 2017

Despite much being done to strengthen the Economic and Monetary Union, it remains incomplete and this is one of the main reasons for the Eurozone's lacklustre economic performance in the recent years. While there are still diverging views on how to "cross the river", there is also a political and economic window of opportunity to complete the EMU architecture. This column discusses the ideas presented in a new European Commission Reflection Paper aimed at relaunching the debate on how to move forward, with a focus on bridging the differences between the member states that stress responsibility and risk reduction and those calling for solidarity and risk sharing.

Giorgio Barba Navaretti, Giacomo Calzolari, Alberto Pozzolo, 06 July 2017

There is a growing awareness that non-performing loans generate risks of financial instability and constrain lending growth, and that coordinated action to solve the problem in Europe is both necessary and achievable. This column discusses proposals for state-supported vehicles, such as asset management companies, put forward by the main international organisations and prominent scholars to deal with the large backlog of non-performing loans. Part of this backlog will be resolved through market-based solutions, but due to market failures and capital shortages of critical banks, state-supported schemes are also deemed necessary.

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