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The European Central Bank is working on her own digital currency: the Digital Euro (DE). Several details are provided in the specific ECB report. There are still many technical problems to solve and structural choices to make before implementing DE. Yet, some features seem clear. DE would be a new technology to use the euro, and will present both cash and deposit-money features. Three sets of reasons back the project. It aims at improving the public payment system on the user’s side; improving the effectiveness of monetary policy and protecting the transmission mechanism; answering some strategic and geopolitical concerns. The first set of issues is discussed in this contribution. A following article will examine the remaining topics.

Occasional sleeping in a shared flat; getting a lift from the airport to the city centre; moving house with the help of a bunch of students – an increasing number of people uses the diverse, often inexpensive offers of digital platforms such as Airbnb, Uber, or TaskRabbit. Although the economic significance of such digital platforms is still modest, the demand for deliveries has surged during the pandemic and it may further rise in the future.

Tourism positively affects the balance of payments, attracts new foreign direct investment and is key to stimulating economic development and cultural change in many countries. Its contribution to alleviating poverty is also significant. For every job directly created in the sector, about 1.5 additional jobs are created. In 2019, approximately 330 million workers were employed in the tourism industry worldwide. This amounts to about 10.3% of total global employment (6.9% in OECD countries).

Pundits from all quarters harshly criticized the German Federal Constitutional Court of Karlsruhe after its judgment of last 5 May 2020.

The Court raised constitutional complaints in regard to the Bundesbank’s approval of the European Central Bank (ECB)’s Public Sector Purchase Programme (PSPP). According to the Court, PSPP potentially violated the principle of proportionality, and thus jeopardized the ability of the ECB (and thus of the Bundesbank) to achieve its price stability mandate. In June 2020, the ECB provided the Karlsruhe Court with documents including detailed considerations on proportionality behind PSPP. Even though these documents met the requirements of the Karlsruhe Court, the ECB will nonetheless be forced to consider the issue of proportionality much more carefully when purchasing government bonds in the future.

Germany introduced the so-called ‘bureaucracy brake’ in January 2015. Whenever new legislation is passed, the ‘one-in-one-out’ principle applies: it obliges the bureaucracy to eliminate old regulation whenever new rules are introduced, to avoid that that regulatory layers multiply and the burden for businesses increases. Since 2015, bureaucratic requirements actually decreased, and shows the German government does intend to cut red tape. Yet, it could do more. For example, the “bureaucracy brake” does not apply to EU guidelines and regulations; it ignores the cost of changing the rules; and leaves the size of the bureaucratic apparatus untouched.

In recent months, the USA has known exceptional tensions: the country has experienced outbreaks of violence and is deeply divided. On January 15, President Joe Biden announced his $1.9 trillion COVID-19 stimulus plan titled the “American Rescue Plan”. He described it as an emergency package to face the nation’s economic difficulties and health-care needs.

The recent paper “Fifty Shades of QE: Conflicts of Interest in Economic Research” by Fabo et al. investigates the possible biases of economic research when analysing QE effectiveness. Part of the research efforts on this subject is led by economists who work at the very central banks that design and put into operation unconventional monetary policies. Comparing their results to those obtained by academic economists may shed some light on the drivers of scientific consensus.

Populism Italian Style and some bizarre ideas about representative democracy came to an end when prime minister Giuseppe Conte resigned and Mario Draghi took his place. Draghi has become a national hero and people have been changing their minds. They no longer trust that bombastic stories could replace lack of content, and that MPs can be appropriately selected through a fanciful internet-based contest where candidates would flaunt their qualities and air their promises.

In a new IREF Working Paper Stefano Adamo of the University of Banja Luka turns to a young genre of Italian literature. Adamo analyzes four novels that revolve around the financial crises of the year 2008 and the government debt crises of the 2010s. What is special is that the authors of the novels can look back at a career in finance. As insiders they can illustrate processes within banks and on financial markets in Italy from first hand experience. In the working paper, Adamo unpacks in detail how the authors depict the financial industry. The industry as well as its protagonists do not fare well. According to the authors, the world of finance is populated by irrational, overly risk-loving individuals. Many of them are questionably entangled with politics. In a sentence, all the novels contain a strong plea for more regulation.

A year ago this month, Boris Johnson took to the stage in Greenwich to deliver a paean to free trade. His central message was that, thanks to Brexit, the UK was finally “re-emerging after decades of hibernation as a campaigner for global free trade”. Twelve months on, it is appropriate to reflect on how far this rhetoric has turned into reality or not. Of course, the intervening period has been marked by two huge trade shocks: Brexit, which could be foreseen, and the Covid-19 pandemic, which could not. In their different ways, these two events have proved the difficulties inherent in the UK’s ability to fulfil the promise of being a free trade champion.