debating progressive politics in Europe and beyond
I won’t repeat the numerous points that have been made in the debate of the past couple of days over the Reinhart and Rogoff paper “Growth in a time of debt”. A useful overview is provided by Bruegel here. I will emphasise a few points based, not on the original paper nor on what recent [...]
France is planning to relax budgetary targets in the current year, failing to meet prior commitments, delaying the return to a balanced budget and incurring slippage in reversing the rise in the debt-to-GDP ratio, now set to peak at 94.3 per cent of GDP next year. About time too! Under the new economic governance rules [...]
The biggest economic debate is between Keynesians (who want more government spending and lower interest rates in order to fuel demand) and supply-side “austerics” (who want lower taxes on the wealthy and on corporations to boost incentives to hire and invest, and who see government deficits crowding out private investment). But both approaches have problems. [...]
Last week the ECB published a report containing an incredible revelation: Cypriot and Spanish households are wealthier than German households.[1] How is this possible? We are dealing with an accounting fiction. Spain and Cyprus have a much higher rate of home ownership than Germany, and most household wealth consists of real estate. Both countries saw [...]
The Commission has just issued an analysis (in-depth review, IDR) of thirteen EU countries considered to have macroeconomic imbalances.* In principle this is a sensible exercise. Macroeconomic imbalances had built up in the pre-crisis years. They have important cross-border spillover effects. Resolving them is thus a matter of the common interest of all the member [...]
As the economic slump across the European Union deepens and social distress grows, a terrible sense of political impotence grips those desperate to see recovery. There is a blunt reality to be faced: if progressives cannot respond to the crisis in the Euro-area with an effective alternative, there is a growing danger not only that the [...]
In recent years, the European Union – or, more accurately, the powerful countries of northern Europe – has been subjecting its weaker members to social and political “stress tests” in the name of fiscal rectitude. As a result, southern Europe and parts of Eastern Europe have become a kind of public-policy laboratory, with experiments producing [...]
I have just come across this video by Brown University Professor Mark Blyth (thanks @JamesHannahUK) who explained very well in five minutes why austerity, especially when everybody engages in it at the same time, is a very bad idea. The video is two years old but – unfortunately – is still up to date with [...]
From a study in (the medical journal) The Lancet: Greece, Spain, and Portugal adopted strict fiscal austerity; their economies continue to recede and strain on their health-care systems is growing. Suicides and outbreaks of infectious diseases are becoming more common in these countries, and budget cuts have restricted access to health care. By contrast, Iceland [...]
In an earlier post, I reported some speculation by Coen Teulings on why politicians seem to ignore the majority of economists when it comes to austerity. (On the minority of economists that do support austerity, see here.) Mark Thoma responded that it was because austerity gave politicians the chance to pursue ideological goals, and of [...]
An interesting discussion at the Council on Foreign Relations. Willem H. Buiter, chief economist at Citigroup, discusses break-up risk, sovereign debt restructuring, bank creditor bail-ins, debt mutualization, austerity, and growth in the Eurozone.
The mobilisation will go on – that’s the central message of the ETUC’s “Declaration on the proposed roadmap for a social dimension of the EMU” adopted with a view to the European Council of June 2013. This Council meeting is supposed to approve an official roadmap adding “social dimension” and “solidarity mechanisms” to the current [...]
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