debating progressive politics in Europe and beyond
Imagine, if you will, an economics student taking an introductory macro exam with the following question: 1. In econaria unemployment, already at historical highs a year ago, has persistently risen over the last year, by a full percentage point in all. Meanwhile inflation has fallen, somewhat erratically, over the past year. The public authorities are [...]
If you are thinking of embarking on reading the European Commission’s Autumn economic forecast (191 pages), released today, you may want to read the first sentence and then think hard whether you shouldn’t save yourself the trouble – especially if you remember last autumn’s prognosis. The report opens with the apparently bland The ongoing post-financial [...]
Yet more evidence, if it were needed (see here and here), that the crisis in the euro area’s so-called periphery is feeding back to the core: the IMK’s monthly recession indicator, published yesterday, has jumped up. The figures imply a more than 40% chance of a recession in Germany beginning in the coming months. (See [...]
Today the IMK issued a forecast update (available in German here). Despite the recent positive signals from European policymakers, in particular the ECB’s OMT bond-buying program, the IMK expects the euro area recession to continue well into next year. It forecasts -0.5% real GDP growth this year and -0.7% for 2013 (annual averages). The reason, [...]
That would be the accurate headline in tomorrow’s papers given today’s verdict by Germany’s Constitutional Court. But it is unlikely that any newspaper concerned about its circulation will print it. Whatever the pre-verdict media frenzy, the simple fact is that a verdict from Karlsruhe that would have seriously threatened the introduction of the ESM would [...]
As had been expected, despite the dissention of the Bundesbank, the ECB has announced a programme of, in principle, unlimited purchases of euro area government bonds on secondary markets. Adding yet another acronym to the alphabet soup engendered by the crisis, the program is termed OMT – Outright Monetary Transactions – and will replace the [...]
The latest quarterly GDP figures confirm the already pessimistic expectations. Europe is sliding back into recession. In both the euro area and the EU27 growth output contracted by 0.2% in the second quarter. This followed on stagnation in the first quarter and a decline of 0.3% in the last quarter of 2011. (In each case [...]
It is unbelievable that after all these months German policymakers continue to make the same mistakes, over and over. And its media are making things even worse. The economics minister Philip Roesler gave a weekend interview in which he opined that he was sceptical that Greece could meet its reform requirements, that no further money [...]
It’s an awkward question but one that must be raised repeatedly. Does Germany really want the euro to survive? Was the beloved DM sacrificed for unification? The German public—like their counterparts around the world—appear to be unduly influenced by their jingoistic press, one which tends to see Germans as the much-maligned victims of a Eurozone [...]
It is fashionable to blame lack of competitiveness for having caused the Euro-crisis. Yet, competitiveness is difficult to measure. The most common indicator is relative unit labour costs (ULC), i.e. the cost of labour compensation, including taxes and social security, per unit of output. These costs are usually measured by an index that shows how [...]
Its great to hear good ideas about how to resolve the euro area crisis, I just wish people would reflect or research a little before they describe them as ‘new’. Mark Schieritz at Herdentrieb, with a nudge from Sebastian Dullien, has spotted a way to bring about a competitive rebalancing of the euro area without [...]
The recent joint economic forecast by the IMK, WiFO and OFCE is now available in English (see the link on the right; auf deutsch hier). I should warn you: it makes miserable reading. While the extraordinary measures by the ECB and the shoring up of the European bail-out fund have averted a meltdown, the institutes [...]
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