Ahead of the ECB meeting, the debate on the right course for euro area macroeconomic policies has re-emerged. An interesting new feature of the debate is about differentiating monetary policy to better cater for different conditions in different countries of the euro area. So should there be more differentiation of monetary policy across countries and how much can monetary policy achieve? Read more
Bruegel blog
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Which way for the ECB?
30th April 2013
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Europe’s banks need to be recapitalised – now
15th April 2013
Europe’s growth performance was disappointing before the financial crisis. It has been dismal since. Five years into the “great recession”, the risk for Europe is to remain trapped in stagnation. Vicious circles are apparent across the continent: weak growth undermines deleveraging and fuels banking fragility. Read more
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It is not yet too late to drop the idea of capital controls in Cyprus
27th March 2013
The Cypriot finance minister Michael Sarris yesterday announced that Cyprus would introduce capital controls (see an FT report here). He announced that measures would be “very differentiated” according to the situation of the bank and as loose as possible in order to allow for a restart of the economy. Read more
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Capital controls will put the euro at risk
26th March 2013
The currency in Nicosia will no longer be worth the same as it is in any other country, says Guntram Wolff. Read more
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Capital controls on Cyprus seem to have been avoided (or not?)
25th March 2013
As my colleague Zsolt Darvas has pointed out, the eurogroup agreement of last night looks pretty good given the circumstances. A number of very important decisions have been taken that need emphasizing. Read more
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Capital controls in Cyprus: the end of Target2?
23rd March 2013
After the decision of last Saturday, an even bigger mistake is under way. Cypriot lawmakers have on March 22 almost unnoticed passed a restriction bill that allows the introduction of capital control. Read more
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Wealth distribution in the eurozone
22nd March 2013
The eurosystem has worked for a number of years now on a very comprehensive survey, called Household Finance and Consumption Network (HFCN). Data will be published in soon. Read more
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Recession calls on European Leaders to increase public investment
13th March 2013
The European Commission has rightly highlighted the need to adjust public finances in the South of Europe, in particular when market access is close to being lost. Yet now the discussion should focus on how to address the recession in the euro area. Germany will have to play a role. Read more
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Chart of the week: Is external adjustment working in the euro area?
12th March 2013
In the sixth year of the crisis of the euro area, it is time to review whether adjustment to external imbalances in the euro area is working. Current accounts have dramatically adjusted in a number of countries of the euro area as the graph below shows. Read more
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Austerity needed to start, now we need a fiscal union
25th February 2013
The main driver of public debt increases in the last 4 years has been high public deficits, not austerity. Budget consolidation is necessary to avoid excessive increases in debt levels. The central question is about the best moment to pursue the adjustment. I provide a simple scenario analysis, which suggests that fiscal adjustment should be gradual in order to balance risks. Arguably, adjustment has been gradual in some though not all countries considered. The simulations suggest that significant recessions are still ahead of us. This calls for a Marshall plan for Southern Europe and a more forceful use of restructuring and resolution tools. Contracts could be a good way of providing fiscal support in exchange for reforms. Read more