WP 2015-03. Executive Summary During the past five years, emerging markets have experienced a significant rise in the credit to the private sector. In the countries that have recently joined…
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Greece is said to be suffering under crippling burden of debt servicing. However, the official debt servicing is already lower than in other EU countries with much smaller debts. Furthermore, the actual interest payments payable by Greece are close to those that Germany is having to make on its incomparably healthier debt. When the general public learn about these relations, political support for any renegotiation of Greek debt is likely to fall even further.
Transatlantic Trade and Investment negotiations are resuming. Popular support varies across Europe, we identify four distinct groups. Removing trade protectionism will generally benefit ordinary people. However, some protectionism may increase, especially in investment chapters. If governments rather give in to corporations than risk being sued by them frivolously, corporatism will strengthen, not weaken.
New rules about deficits run by Member State governments have been announced by the European Commission. They are phrased as “guidance” so no Parliamentary approval is needed. They are said to “encourage structural reforms and investment”, but IREF shows that they discourage structural reforms and encourage only “investment”.
9 EU countries have not adopted the Euro, 19 have. Both groups include similar proportions of countries with high, medium and low levels of economic freedom. However, IREF’s investigation of what has been happening to economic freedom in the two groups reveals significant differences. While non-Euro countres moved towards more fiscally related freedom, in Eurozone it stagnated or declined.
The Greeks have voted and the left-wing Syriza emerged as the clear winner. There will now follow intensive discussions about Greek reforms and the relationship between Greece and the rest of the world. The labour market is one of the core battlegrounds in Greece. It is very difficult for the country’s unemployed to re-enter the labor market. This is borne out not only by the high unemployment rates but also by data on duration of holding current job. In no Eurozone country has the average employed worker held his or her job as long as in Greece. It is not clear whether the new government has either the incentive and/or the means to adjust the privileges of labour market insiders for the benefit of current outsiders.
WP 2015-02. Executive Summary Western central banks have been pursuing unconventional monetary since at least 2008. Is there a way of ending them? The authors identify the winners and losers…
WP 2015-01. Executive Summary Does progressive taxation on corporate income discourage entrepreneurship? At first glance, the answer seems in the positive, since as tax pressure on business increases, business activities…
For several weeks Greece has been, once again, at the centre of European economic policy. Grexit, Greece’s withdrawal from the Eurozone, is being debated again, in light of the forthcoming Greek election of 25 January. Proponents point to the opportunity after such withdrawal for a massive devaluation of Greek currency which would lower the price of Greek goods and services and make them competitive again.
However, a quick look at different measures of economic freedom in the Eurozone countries suggests, that strong devaluation alone would not shuffle Greek problems off this mortal coil.
Only two countries remain opposed to QE, although even they realise that measures about to be implemented are QE in all aspects but the name. Meanwhile, ground is being prepared for ECB to shift blame if “unconventional stimulus” ends up not working.
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Russian sanctions work. Or so we are led to believe. However, it would be a mistake to underestimate the preparedness of EU banks (and bankers) to sidestep official sanctions and participate on the market. After all, Russia’s collateral may be sounder than that of EU governments…
