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Germany Begins to Feel the Pain
Last week, among the many bad news for the eurozone, one was in my opinion not sufficiently commented: in September industrial orders in Germany dropped considerably. What is particularly interesting...
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Marathons…
A couple of years ago (February 2010), I thought I was being really heterodox, when I argued that Greece should be given 7-8 year to consolidate its public finances, because any sharp consolidation...
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The “Golden” Rule. Really? Golden?
The European Council meeting, next Monday, should finally lift the veil of mystery that has surrounded the new “fiscal compact”, the set of rules supposed to govern fiscal policy in EU member...
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On Fiscal Rules and the Need for Reforming the Stability Pact
I recently wrote a paper with Jerome Creel and Paul Hubert, in which we try to assess the impact of the different fiscal rules that are being discussed for reforming the Eurozone governance. For our...
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Explaining the Euro Problems in Six Minutes
Last week I had a short interview with France 24 in which I tried to squeeze in just a few minutes the contrast between the global imbalances view and the Berlin view. Filed under: EMU Crisis, Global...
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The Strange Case of Dr IMF and Mr Troika
With Greece desperately trying to obtain more time to carry on its fiscal consolidation plan, it is interesting to read a recent IMF working paper on “Successful Austerity in the United States, Europe...
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IMF Schyzophrenia
I had already noticed that the IMF at times looks like Jekyll and Hide. But not to this point. Last time I cited a simple working paper. This time we are talking about the most important document...
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Wishful Thinking
Yesterday I published a note on OFCE le blog (in French), analyzing one possible outcome of the recent Italian elections: A center-left minority government, with external support of the Cinque Stelle...
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The Commission on Portugal: Is This for Real?
A quick note on Portugal. Let’s start from three facts: Austerity did not work. Portugal is in a recessionary cycle. The economy will shrink by 2.3 per cent this year, more than twice as much as the...
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Supporting Aggregate Demand in Fiscally Constrained Economies
In the past weeks I have argued at length that the eurozone is in recession because of a strong contraction of aggregate demand; and that in spite of this fact the overall fiscal stance is...
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Parallel Universes
So, on today’s FT the German finance minister Wolfgang Schauble forcefully argued that Europe is on the right track, that austerity is paying off, and that “Despite what the critics of the European...
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Look who’s Gloomy
Wolfgang Munchau has an excellent piece on today’s Financial Times, where he challenges the increasingly widespread (and unjustified) optimism about the end of the EMU crisis. The premise of the piece...
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Greek Tragedies, 2014 Edition
Last week’s publication of a Lancet article1 on the effect of austerity on Greek public health made a lot of noise (for those who know Italian, I suggest reading the excellent Barbara Spinelli, in La...
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Wrong Debates
Paul Krugman has a short post on the Eurozone, today (I’d like him to write more about us; he has been too America-centered lately), pointing out that the myth of fiscal profligacy is, well, just a...
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The Confidence Witch
Remember the old times? Here is a quote from ECB President Jean-Claude Trichet, September 2nd, 2010: [Fiscal Consolidation] is a prerequisite for maintaining confidence in the credibility of...
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What Structural Reforms?
I am ready to bet that the latest IMF World Economic Outlook, that was presented today in Washington, will make a certain buzz for a box. It is box 3.5, at page 36 of chapter 3, which has been...
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Draghi the Fiscal Hawk
We are becoming accustomed to European policy makers’ schizophrenia, so when yesterday during his press conference Mario Draghi mentioned the consolidating recovery while announcing further easing in...
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The Quest for Discretionary Fiscal Policy
It is nice to resume blogging after a quite hectic Fall semester. Things do not seem to have gotten better in the meantime… The EMU policy debate in the past few months kept revolving around monetary...
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