The IMF has just released its self-evaluation of its Greek lending, in which it admits to many mistakes. This column argues that the report misses one important error – reliance on the Debt Sustainability Analysis – but notes that the IMF’s candour should be a model for the other participants in the lending, namely, the European Commission and the ECB.
Charles Wyplosz, 17 February 2017
Paul Hünermund, Georg Licht, 08 July 2016
European countries are increasingly coordinating their national research and development policies. However, supra-national R&D programmes entail problems from a governance standpoint. This column discusses the problem of cross-subsidisation between participating countries. European joint programming initiatives are usually designed to avoid international transfer payments. Empirical evidence suggests that doing so comes at the price of decreased efficiency.
Fabienne Ilzkovitz, Adriaan Dierx, 19 June 2016
Firms with greater market power can behave monopolistically, and recent research suggests that declining market competitiveness is driving income inequality. While competition authorities already measure the overall impact of their interventions by using customer savings, these measurements do not account for indirect effects of intervention. This column introduces a DSGE model to model competition policy interventions as a negative mark-up shock. Competition policy has a significant and positive impact on growth and jobs, and impacts richer and poorer households differently. Interventions have important redistributive effects that benefit the poorest in society.
Nicolas Véron, 08 October 2015
The EU has started conversations on a capital markets union, raising questions about integration of services such as finance. This column argues that regulated services are especially important for the European economy. Europeans will eventually be faced with a choice between maintaining sovereignty and building a single market. Whereas the ‘old’ single market in goods and unregulated services was satisfactorily addressed through standards harmonisation, the new single market challenge is all about regulatory enforcement institutions.
Karsten Neuhoff, 07 March 2015
The European Commission proposed the implementation of a Market Stability Reserve as a response to a surplus of allowances in the Emissions Trading System. This column discusses how the Reserve should be designed and whether it could improve the emissions trading. Insight from several models indicates that the Stability Reserve corrects for a number of market failures in the emissions trading.
Carlo Cottarelli, 02 March 2015
The European Commission has clarified the flexibility in existing Eurozone fiscal rules. This column argues that the emphasis on structural rather than headline deficits is desirable but requires identification of potential growth rates. The way the Commission currently estimates potential output yields potential growth estimates that are very low. Thus, a year of modest expected growth like 2015 may be treated as a year of economic boom that requires faster than normal fiscal adjustments.
Marco Buti, Philipp Mohl, 04 June 2014
Investment in the Eurozone is forecast to remain below trend until 2015, with a particularly large shortfall in the periphery. Low investment reduces aggregate demand, thus lowering short-term growth, and it also hampers medium-term growth through its effect on the capital stock. This column highlights three causes of low Eurozone investment – reduced public investment, financial fragmentation, and heightened uncertainty – and proposes a series of remedies.
Marco Buti, Nicolas Carnot, 14 March 2013
As the Eurozone growth continues to be negative, debates over the correct degree of austerity continue. This column presents the Commission’s view on how and why austerity continues to be necessary.
Daniel Gros, Dirk Schoenmaker, 24 September 2012
As the EZ takes its first steps towards banking union, this column warns that such an approach – with banking supervision first and resolution and deposit insurance postponed to some undefined later stage – will lead to an unstable banking union. It adds that a strong European supervisor and a credible European resolution and deposit insurance authority should be introduced as part of the package.
Jacopo Carmassi, Carmine Di Noia, Stefano Micossi, 20 September 2012
The European Commission’s latest proposals for financial regulation are seen by many as the first steps towards a banking union. This column argues that there are a number of issues that need to be exposed and debated in public before the Commission decides on anything.
Vincent O'Sullivan, Stephen Kinsella, 20 September 2012
The European Commission is planning a shake-up in financial supervision in Europe. This column argues that time will tell whether or not this is a good idea – for now all we have for certain is uncertainty.
Simon Evenett, 14 June 2012
In recent weeks official bodies such as the World Trade Organisation and the European Commission as well as leading private sector associations – the International Chamber of Commerce (ICC) and the so-called B20 group of business leaders – have made strong statements concerning rising protectionism in the run up to the G20 summit in Los Cabos, Mexico. On the basis of most extensive update to the Global Trade Alert (GTA) database, that was conducted in preparation for this, the eleventh GTA report, they were right to do so.
Francesco Giavazzi, Luigi Spaventa, 14 October 2010
The European Commission now recognises that fiscal discipline alone is not enough to ensure the stability of the euro. Yet this column argues that the new proposals to combat the Eurozone’s fragility are an empty and useless exercise – Europe’s policymakers should instead be worried about unchecked credit expansion.
Marco Buti, Martin Larch, 14 October 2010
The European Commission’s proposals for stronger economic governance in the EU have aroused both broad approval and outright condemnation. In this column, the European Commission’s Director-General for Economic and Financial Affairs outlines why he and colleagues are confident that the proposals will work.
Paolo Manasse, 07 October 2010
The European Commission has recently reviewed the Stability and Growth Pact. This column argues that, while such reform is urgently needed, the Commission’s proposals, with the exception of those concerning budgetary institutions, are naive and risk being counterproductive.
Charles Wyplosz, 04 October 2010
Can the Eurozone’s Stability and Growth Pact be made to work? This column argues that the European Commission’s reform proposals for the pact include some good ideas but many bad ones. If adopted, it says the pact will not significantly advance fiscal discipline in the Eurozone but it could turn out to be a transition to an effective framework.
David Harbord, Steffen Hoernig, 28 September 2010
The European Commission recently authorised the merger between Orange and T-Mobile, which will create a single network with 37% of all UK mobile subscribers. While the merger's approval is subject to certain undertakings, this column presents evidence that these do not go far enough to address concerns that competition and consumer surplus will be significantly reduced.
David O'Sullivan, 17 September 2010
David O’Sullivan, Director General for Trade at the European Commission, talks to Viv Davies about the issues and challenges in setting the direction for future EU trade policy. As a contribution to the VoxEU debate on "The future of EU trade policy", O’Sullivan discusses the EU’s responsibility within the world trading system, trade governance and the WTO, the role of reciprocity, the BRICs and the importance of successfully concluding the Doha Development Agenda; he also comments on the issue of ‘multilateralising regionalism’. The interview was recorded on 15 September 2010.
Ralf Martin, Mirabelle Muûls, Ulrich Wagner, 24 May 2010
This week, the European Commission will release more details of its plans to tighten the greenhouse gas emissions targets in the EU’s Emissions Trading System. A key concern will be the potentially negative impact on the competitiveness of affected businesses. This column argues that industry is successfully exploiting such concerns to obtain free emission permits according to criteria that are too lax. Most of the exempt sectors would not close or relocate if they had to pay for permits, and removing these exemptions would raise €7 billion annually.
Federico Etro, 29 April 2010
Is another IT giant abusing its market position? This column describes the case of IBM – a near-monopolist in the mainframe market – being accused of preventing firm entry by tying its mainframe operating system with its hardware and withholding information for interoperability. The similarities with the Microsoft case suggest that the European Commission’s Director-General for Competition will not go easy.