Ahead of his presentation at the "Global Progress - Towards a Global New Deal," Resident Scholar André Sapir summarizes his Memo to the President of the European Commission, co-written with Bruegel Director Jean Pisani-Ferry. Sapir writes about the challenges the Commission faces and the priorities it must set in the aftermath of the financial crisis. La Presidencia española de la Unión Europea (UE) durante el primer semestre de 2010 tendrá lugar en un momento decisivo, en el que la UE se enfrentará a decisiones que conformarán su futuro para los próximos años. En el plano institucional, coincidirá con el inicio de la segunda Comisión Barroso y, cabe esperar, con la implantación del Tratado de Lisboa y la introducción de determinadas… Read more
Bruegel blog
-
Una Agenda Estratégica Para El Progresso de Europa
1st October 2009
-
What Mark Will the Crisis Leave?
27th September 2009
Bruegel Director Jean Pisani-Ferry writes about the prospects for post-crisis growth in the world economy in a column published in both the French newspaper Le Monde and the German newspaper Handelsblatt. He explains that the decrease in the labor force and the reduction of capital stock will likely lead to a much slower recovery in mature economies in Europe and the United States. The approach from Europe and the U.S. has differed thus far, Pisani-Ferry writes, but they must both act proactively to ensure a smooth recovery. The crisis is not yet behind us but the climate of depression which had hovered over the winter is showing signs of lifting. Financial conditions have improved markedly and, even if it is… Read more
-
Exit Strategies
25th September 2009
What’s at stake: As the policy debate switched from crisis response to presaging a return to normal conditions, talks about exit strategies have flourished as most countries have pursued massive financial, monetary and fiscal support policies during the last two years, and there will soon be a need to turn them back. Although the issue did not feature to a great extent at the Pittsburgh summit, it is bound to come back at the forefront of the policy agenda in the near future, potentially as early as next week-end for the Annual Meetings of the IMF and the WB in Turkey. Paul De Grauwe says that the empirical research used to argue that demand spillovers from fiscal policy are sufficiently… Read more
-
Rebalancing growth
25th September 2009
What’s at stake: On Thursday evening and Friday, heads of government from countries belonging to the G-20 met in Pittsburgh and reached agreement on a US led proposal for a new framework for tackling global economic imbalances. The goal was to achieve both a basic agreement on what needs to be done to produce more balanced global growth and on a process for ensuring that countries deliver on their commitments. The ideas are not new, and there is no enforcement mechanism to penalise countries if they stick to their old habits. But for the first time ever, each country agreed to submit its policies to a “peer review” from the other governments as well as to monitoring by the International… Read more
-
Why the Issue of Convergence Should Remain on Backburner
23rd September 2009
Ahead of the G20 summit in Pittsburgh, Resident Scholar Nicolas Véron argues that the project to converge standards between the American Financial Accounting Standards Board and the International Accounting Standards Board has moved too hastily. He recommends that the issue of convergence should be left on the backburner and that the FASB and the IASB should instead focus on ensuring high-quality accounting to meet the needs of capital providers. The G20 this week in Pittsburgh will reaffirm its mantra, that accounting standard-setters should make progress towards "a single set of high-quality global accounting standards". But doubts are emerging about both global accounting harmonisation and standards quality, measured against the information needs of the financial reporting audience.Last October, the International Accounting… Read more
-
Sharing the burden
22nd September 2009
Jean Pisani-Ferry goes over the reasons why it is more complicated for the EU to put toegether a sustainable fiscal stimulus package- and why it's important that the EU overcomes these difficulties to play its role on the global scene. According to the latest International Monetary Fund forecasts, economic contraction in 2009 is going to be somewhat sharper than in the US. Private forecasters do not disagree. Yet in proportion of GDP, the size of the stimulus packages put in place in Europe are at best half the size of the US recently enacted ARRA stimulus, and unlike it several of them are rear-, rather than front-loaded . Calculations by David Saha and Jakob von Weizsäcker of Bruegel assess the… Read more
-
A year after Lehman’s collapse
17th September 2009
What’s at stake: Coming on the same weekend as the 11th-hour bailout of the giant insurer American International Group, and the sale of Merrill Lynch, Lehman’s failure was the climax of a cataclysmic weekend in the financial industry. On the one-year anniversary of the Lehman Crisis, the biggest names in financial punditry have been voicing their thoughts while policy makers on both sides of the Atlantic used this week’s anniversary to pledge to drive through financial reforms. Next week the stage for regulatory reform moves to Pittsburgh where leaders of the G20 countries will discuss a push for simpler, stronger rules on bank capital, an effort to rein in bankers’ bonuses, and mechanisms to force banks to draw up “living… Read more
-
Health care reform
17th September 2009
What’s at stake: After months of back and forth with leaders from both major political parties, Senator Max Baucus, the chairman of the Senate Finance Committee, released a health care reform proposal on Wednesday that meets many of the requirements that President Obama stipulated in a recent speech to lawmakers. Mr Baucus' earlier efforts to craft a bipartisan compromise bill among the "Gang of Six" Republican and Democratic senators had resulted in significant delay for the reform effort, threatening the very possibility of reform and triggering the president's recent speech to a joint session of Congress. What’s in the Baucus’ plan: Although there would be no public option and the plan would allow for varying degrees of healthcare coverage, it… Read more
-
Europe's Oligarchs
15th September 2009
Resident Scholar Nicolas Véron examines whether business and financial oligarchies exist in Europe and whether they have too much influence over the political process. He argues that policymakers must use effective competition policy to limit the economic power of big business while guarded against those special interests. Rich Western nations have long lived in the comfort that government capture by specific private interests was mostly a feature of poor or emerging countries, rather than of themselves.The expression “crony capitalism” referred to Asian countries in the late 1990s, and “oligarchs” sounded as if they were unique to Russia. But the crisis has shattered the West’s sense of relative comfort on this front. A telling indication was the wide impact and debate… Read more
-
How economists got it so wrong?
10th September 2009
What is at stake: Back in November 2008, HM Queen Elizabeth II wondered why no one saw the crisis coming. Around the same time, Alan Greenspan was admitting that he was in a state of shocked disbelief because the whole intellectual edifice had collapsed. Since then, the controversy around the role of economists in the crisis and the direction the economics profession should take from there has not fade. The publication in Sunday's New York Times Magazine of a long dissection of the state of economics by Paul Krugman has triggered a new wave of reactions. Paul Krugman says that the economics profession went astray because economists mistook beauty for truth. Few economists saw our current crisis coming, but this… Read more