Cryptocurrency assets are now mainstream, with multiple banks and businesses globally investing in crypto software and financial architecture. Seven million individuals have accounts with Coinbase, the US’ largest, though only one of multiple, exchanges.
As prices of bitcoin and Ethereum reach new highs (recent gains being attributed to endorsement from celebrity businesspeople such as Tim Cook of Apple), we wonder whether the popularity of bitcoin might wane on energy grounds.
On December 17, 2010, a young Tunisian by the name of Mohamed Bouazizi set himself on fire to protest against police harassment. His act triggered a wave of revolts across the Arab world as people rose against authoritarianism and poverty. The fall of Ben Ali’s regime in Tunisia after 23 years in power generated enormous expectations. People throughout the region hoped to end injustice and corruption, and start moving towards freedom, democracy and economic prosperity.
This year and a half of pandemic has rekindled the debate about the relationship between individual freedom and its limits, especially when health is at stake. While in several countries governments seem to be reasonably cautious in this regard, Italy has adopted policies (i.e., the so called “green-pass”) that have no equal among Western democracies in terms of extension and invasiveness. Italian citizens cannot take a train, attend a university class or go to work without giving proof, possibly via a specific App in their smartphone, that they are vaccinated (or to be negative to a Covid-test taken in the last 72-hours). Despite the perplexity shown by some commentators, general support for the green-pass in Italy is rather high. About two Italians out of three believe that far from depriving them of liberty, the green pass actually enhances their liberty. Although this reaction may be surprising, it could perhaps be understandable, if such policies were thought as temporary. Some data, however, highlight a different and less optimistic scenario.
The IFO Institute (Munich) has just revised its forecast for the German economy. GDP is now expected to grow 2.5%. IFO’s previous prediction was 3.3% and the prediction the European Commission put forward last Summer was 3.6% (Fig.1). However, according to IFO the economy will rise 5.1% in 2022 and thus bring the country back where it was before the Covid-19 shock.
In many countries, pay-as-you-go pension systems are under increasing pressure due to demographic changes. This explains why more and more opinion makers recommend switching to a funded system on top of the current voluntary schemes. During the transition period, however, the existing unfunded pension entitlements would still have to be paid out, while employees already start building a capital stock. This is commonly known as the ‘double burden’, and explains why resistance to change remains significant.
We analysed in May the extent to which ECB & Eurosystem funding, combined with new EU programmes such as the Pandemic Emergency Purchase Programme and the Next Generation EU Fund, are increasingly crowding out markets and becoming by far the dominant source of funding for both banks and member states.
Morocco is one of the most dynamic economies in the African continent. It has a remarkable reputation in the region for opening its economy, privatization, and increasing the role of the private sector. However, Moroccan governments have consistently neglected to reform the tax system and thus encourage risk-taking, investment and entrepreneurship.
Similar to the developing countries with little or no energy resources, taxation is the main contributor to the Moroccan state budget. The Moroccan tax system is affected by a set of imbalances and problems that regard both the structure and the burden of taxation. Despite some reforms in the 1990s, the tax system is still characterized by heavy pressure and inefficient bureaucracy, even compared to other developing countries. In 1999, 2013, and 2019 the government organized three National Conferences with a view to modernizing and simplifying the tax system. Nothing came out of them.
As Europe emerges from the Covid economic slump and seeks to rebuild by deploying the multiple sources of liquidity we considered here, the main finance industry lobbying body for the UK and Europe is seizing the moment to push hard for reform of securitisation regulations. The Association of Financial Markets in Europe (AFME) seeks to water down Article 46 of the EU’s Capital Markets Directive such that banks and insurers investing in tranches of securitised bonds are required to allocate less capital than at present, thus facilitating greater leverage. This argument implicitly states that the Basel Rules for banks, and their sister Solvency 2 rules for insurers, are overly conservative and must be softened to enable this transformative, green, and sustainable recovery to take place.
