Economic Policy
An EU Budget for the 21st Century
The publication last week of the European Commission’s 2020 paper marks a return to normal service for the EU. We can now get back to proper political debate about Europe’s future rather than be distracted by institutional navel gazing.
Welcome as the Commission’s proposals are though, they reveal a worrying faith in and reliance on the [...]
Sustainable Europe?
I am glad this week’s theme is called ‘sustainability’ and not ‘the environment’. The ‘environment’ always sounds like something you look at out of the window, or visit at the weekend. However what is on the agenda now is much more than that, it is about whether we can sustain the capacity of the [...]
What Conservatives do not understand about the Euro
Conservative economists triumphantly expect that the end of the euro is nigh. They take the Greek budget troubles as proof: one size cannot fit all. But they are wrong. The euro has contributed to the largest job creation in Europe’s history: 15.1 million new jobs in the first decade compared to 3.9 million in the [...]
The Greek Aftershock – Will it Make or Break Europe?
After the earthquake come the aftershocks. That is a law of geophysics, and now apparently of economics. Well over a year ago, the world economy suffered a massive economic quake of 8.0 on the Richter scale. Since then different countries have been experiencing a number of aftershocks.
Two aftershocks have grabbed headlines, one recently in [...]
A Greek Tragedy or a European Farce? Time to Re-Write the Script
In the official account of the unfolding Greek tragedy the villain is readily identified, the plot is clear, and the dénouement inevitable, tragic, but ultimately both just and morally uplifting.
The villain of the piece is Greece itself: a bloated and inefficient public sector, rampant corruption, and decade-long fiscal incontinence partially shielded from public scrutiny by [...]
The Eurozone’s critical Design Flaws
The problems Greece and some other eurozone countries are experiencing have highlighted a design flaw in the euro: it is ill-prepared to deal with asymmetric shocks because its balancing mechanisms, as Paul Krugman says, are inadequate. But in the case of Greece, there is also no doubt that serious fiscal irresponsibility combined with creative accounting ideas [...]
The Eurozone Problem – Learning from Africa
In the debate about Greece and the Eurozone analogies have been drawn with various other currency unions, but the most significant has gone unnoticed. The Franc Zone has been linked to the European currencies for over sixty years. The relationship between the French Treasury and the governments of Francophone Africa displays many of the structural [...]
The Greek Drama and the Social Justice of Responsible Fiscal Policies
I do not envy our Greek socialist friends. They got elected because the previous conservative government was catastrophically incompetent, but the mess they now have to sort out is worse than the wildest imaginations could have predicted. This is not just a local problem. The fate of the euro, and therefore of Europe, hangs in [...]
An Idea Whose Time Has Come
In 2002 I published an article on a maximum wage in the centre-left theory journal Renewal. The idea of putting a ceiling on what people could earn was left-field, to say the least. It was more a thought experiment than a serious attempt to influence political debate. The article and the idea sank without much [...]
The EU must act on a Tobin Tax
Have Gordon Brown, Nicholas Sarkozy, Angela Merkel and other EU leaders dropped their support for a Tobin tax, or will they press home the idea in the near future? This question is crucial, particularly now that there are widespread plans for ‘budget cuts’ amongst EU member states, including possible rises in VAT in the UK.
A [...]
Does Europe need a Strategy for China?
The European Union is the second largest economy in the world, but does it have a global economic strategy? 10 years after the creation of the euro, there is little evidence for it. Policymakers are more concerned with protecting narrow domestic advantages than with improving opportunities for the European economy as a whole. The Lisbon [...]
Good Capitalism… and what would need to change for that
The ongoing financial crisis points unmistakably to the glaring weaknesses of the present economic system. An event that seemed relatively manageable in economic terms – the real estate bubble in the United States – has brought the globalised economy to the brink of a new depression, reawakening memories of the world economic crisis of 1929.
The [...]