Ireland has assumed the role of the Presidency of the Council of European Union for the first half of 2013, which will likely attract more attention to the country. Yet the major question of the year is if Ireland will be able to return fully to market funding when the current official financial assistance programme expires at the end of this year. Read more
Bruegel blog
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The year of Ireland?
9th January 2013
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Banking union for non-EA countries
8th January 2013
In a recent blog entry we estimated the total assets and number of banks in the euro area underdirect ECB supervision according to the agreed criteria of the Single Supervisory Mechanism. We now extend the research to all EU countries. In this blog, we start with the statistics before discussing the more complicated home-host issues and how they are treated in the new compromise legislative text. Read more
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The eurozone will muddle through (again)
4th January 2013
At the last European Council summit of 2012, politicians decided to go ahead with the banking union while ending their reflections on fiscal union they had initiated in June, a time of acute market stress. The message: banking union is needed; the rest is not. This behaviour confirms that the eurozone has little appetite to think about its own future. Read more
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Three structural reforms remain central for the euro in 2013
19th December 2012
As the year draws to a close, it is time to reflect on the economic policy priorities for 2013. I would identify three structural reform areas that are central to the success of the euro… and one less structural measure. Read more
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The euro area’s need for stabilization in historical perspective
19th December 2012
It is not unusual that some European countries register strong growth rates and others less so. Yet, significant divergence in output is historically associated with dramatic events (or crises). This implies that a euro area budget used for stabilization will end up being activated only a few times. Moreover, there is no historical record of core Europe marching above and the periphery below potential. This makes it unrealistic to conceive of a euro area budget that transfers resources on the spot from badly hit to just moderately hit countries. Some institutional engineering would be necessary. Read more
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Un budget pour la zone euro?
18th December 2012
Faut-il un budget pour la zone euro ? Enfouie depuis plus de vingt ans, la question a ressurgi ces derniers mois. Visiblement, beaucoup de ceux qui croient encore à l’euro pensent que le temps des prudences est révolu et qu’il faut revisiter sans tabous les compromis sur lesquels il a été fondé. Read more
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Slow, but real progress on resolving eurozone crisis
17th December 2012
Last week summit of heads as well as finance ministers marks an important step in completing the eurozone architecture. At the same time, the summit’s results fall short of what could have been hoped for. Read more
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Europe Takes an Important Step Forward on Banking
17th December 2012
The political agreement reached early on December 13 by Europe’s finance ministers makes it highly likely that legislation establishing a Single Supervisory Mechanism (SSM) with the European Central Bank (ECB) at its center will be enacted in March 2013. This is a big European success, high up on what was the range of possible outcomes. Read more
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A banking union of 180 or 91%?
13th December 2012
The European finance ministers have agreed on a deal for the banking union. According to the deal, the ECB would be directly responsible for banks with assets exceeding 30bn euro or 20% of GDP, or at least the 3 largest banks of each country member for those nations where fewer than three fulfil the previous criteria. In this chart of the week, we applied the two criteria to the Banker dataset, which includes 754 banks in the euro zone, so 14% of the 5404 banks. In terms of assets, a comparison between the Banker database and ECB aggregate statistics shows a good overall coverage of the banking system. Read more
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Where did smart money go in 2012?
11th December 2012
The short answer is: into the periphery of Europe. Read more