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You searched for: Content Type Policy Brief Remove constraint Content Type: Policy Brief Publishing Institution Centre for European Policy Studies Remove constraint Publishing Institution: Centre for European Policy Studies Topic Economics Remove constraint Topic: Economics
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  • Author: Stefano Micossi
  • Publication Date: 03-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The eurozone is in recession and will show negative growth in 2012; GDP will fall sharply in Greece and Portugal, and there is substantial risk that Spain and Italy will follow suit (the Commission's recent forecasts seem overly optimistic and complacent; the IMF is more downbeat). But fiscal policies are uniformly restrictive throughout the eurozone and much of the Union, and the hopes that fiscal consolidation could spur growth by improving household and business confidence are not materialising. In reality, domestic demand has been hit too hard by fiscal consolidation, and investment throughout the Union remains well below pre- crisis levels. Credit is tight due to the deteriorating quality of borrowers and the ongoing deleveraging in banking.
  • Topic: Economics, Foreign Exchange, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: Europe, Greece
  • Author: Daniel Gros, Thomas Mayer
  • Publication Date: 03-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: This paper argues that the new permanent European rescue fund, the European Stability Mechanism (ESM), should be provided with a liquidity backstop by having it registered as a bank – and be treated as such by the European Central Bank. If the crisis were to become acute again, the ESM would stand ready to intervene in secondary markets, potentially with almost unlimited amounts of funding. Access to central bank financing will be crucial in a future crisis, because in such a crisis risk aversion is likely to be extreme, and even the ESM might not be able to raise at very short notice the huge sums that might be required to prevent a breakdown of the financial system. Hundreds of billions of euro might be needed just to top up the programmes for Greece, Ireland and Portugal – and Spain and Italy may require more than a thousand billion euro. Sums of this order of magnitude cannot be raised quickly by a new institution. Simply increasing the headline size of the ESM might thus be of little use.
  • Topic: Debt, Economics, Monetary Policy, Financial Crisis
  • Political Geography: Greece, Spain, Italy, Portugal, Ireland
  • Author: Jonas Teusch
  • Publication Date: 03-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: This Policy Brief argues that pursuing the renewables objective could contribute to the completion of the internal electricity market, help to overcome opposition to transmission projects and decrease the market power of incumbents. Conversely, an integrated internal electricity market means less price volatility in specific regional markets, which allows for more efficient deployment and grid integration of renewables.
  • Topic: Economics, Energy Policy, Markets
  • Political Geography: Europe
  • Author: Paul De Grauwe
  • Publication Date: 05-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: One of the major problems of the eurozone is the divergence of the competitive positions that have built up since the early 2000s. This divergence has led to major imbalances in the eurozone where the countries that have seen their competitive positions deteriorate (mainly the so - called ' PIIGS ' – Portugal, Ireland, Italy, Greece and Spain ) have accumulated large current account deficits and thus external indebtedness, matched by current account surpluses of the countries that have improved their competitive positions (mainly Germany).
  • Topic: Economics, Markets, Regional Cooperation, Global Recession, Financial Crisis
  • Political Geography: Europe, Greece, Germany, Spain, Italy, Portugal, Ireland
  • Author: Daniel Gros
  • Publication Date: 04-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Lax financial conditions can foster credit booms. The global credit boom of the last decade led to large capital flows across the world, including large movements of resources from the Northern countries of the euro area towards the Southern part. Since the start of the crisis and more markedly after 2009, these flows have suddenly stopped, creating severe adjustment pressures. This paper argues that, at this point, the common monetary policy can only try to mitigate the unavoidable adjustment by maintaining overall financial stability. The challenge is to strike a delicate balance between providing liquidity for solvent institutions while keeping the overall pressure on for a rapid correction of the imbalances.
  • Topic: Economics, Markets, Monetary Policy, Financial Crisis
  • Political Geography: Europe
  • Author: Daniel Gros, Cinzia Alcidi
  • Publication Date: 04-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Spain faces high unemployment and slow growth. This paper focuses on an important source of those problems, namely its housing market. While some adjustment has occurred since Spain's housing bubble burst in 2008, the authors find that house prices and construction need to decrease more to slow Spain's unsustainable accumulation of foreign debt.
  • Topic: Debt, Economics, Markets, Financial Crisis
  • Political Geography: Europe, Spain
  • Author: Rym Ayadi, Emrah Arbak, Willem Pieter De Groen
  • Publication Date: 06-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Adopted by the European Commission in July 2011, the proposed Capital Requirements Directive and Regulation (CRD IV-CRR) translate into EU law the Basel III standards adopted by the Basel Committee for Banking Supervision (BCBS). Among other things, the proposal increases the quality and quantity of the minimum capital; introduces new rules on liquidity, leverage ratios, counter-cyclical buffers and systemically important financial institutions; and amends the definitions of counterparty credit risk and rules for the banking book. The rules complement the earlier amendments that strengthened the capital and disclosure requirements for the trading book and resecuritization instruments as well as requirements to ensure that remuneration policies do not lead to excessive risk-taking.
  • Topic: Debt, Economics, Markets, Financial Crisis
  • Political Geography: Europe
  • Author: Stefano Micossi
  • Publication Date: 06-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: Once again the European Council will meet in an emergency session at the end of June, with the eurozone economy in recession and actually plummeting in its Southern periphery. Further doubts are also growing on the sustainability of sovereign debts due to the vicious spiral of deteriorating bank balance sheets, ballooning potential liabilities from banking rescues and widening spreads on government borrowings. The sovereign debt crisis in the periphery has now turned into a fully fledged banking crisis that threatens to spread from Greece to Spain and tomorrow, who knows, to Italy, France and even Germany itself.
  • Topic: Debt, Economics, Regional Cooperation, Financial Crisis, Governance
  • Political Geography: Europe, Greece, France, Germany, Spain, Italy
  • Author: Daniel Gros
  • Publication Date: 05-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: As the euro crisis continues and unemployment climbs to new heights, the clamour calling for Europe to 'do something' is getting louder. But the real question is: can Europe, or rather the EU, do 'something' that would actually have a real impact on unemployment? In other words, does a European plan or employment strategy make sense?
  • Topic: Economics, Markets, Labor Issues, Financial Crisis
  • Political Geography: Europe
  • Author: H. Onno Ruding
  • Publication Date: 05-2012
  • Content Type: Policy Brief
  • Institution: Centre for European Policy Studies
  • Abstract: The so-called 'euro crisis' is of the utmost economic, financial and political importance for all member countries of the euro area and for the future of the Economic and Monetary Union (EMU). In my view, however, it is not primarily a euro crisis in the strict sense. The euro itself is of course involved, but, as a currency with a rather stable exchange rate vis-à-vis other currencies and with a major role in global financial markets, it is not at the heart of the crisis. Rather the crisis is a matter of the serious imbalances in the economies of several euro-area countries, particularly their budget deficits and sovereign debts and as well as their lack of competitiveness and balance-of-payments deficits.
  • Topic: Economics, Markets, Monetary Policy
  • Political Geography: Europe