Debt Relief as a Last Resort for the Lender of Last Resort?

The coronavirus crisis has led to a sharp increase in the debt-to-GDP ratios of the euro area member states. Without external support, access to the capital market could be seriously threatened in the medium term for Italy, but also for other member states. While the Pandemic Emergency Purchase Programme, which is designed as a monetary policy instrument, is regarded by some as a violation of the prohibition of monetary financing, the Next Generation EU recovery fund is likely to direct the fundamental structures of the European Union towards a fiscal union with considerable redistribution elements. This article analyses an alternative strategy, namely debt relief by the European System of Central Banks through an EU debt agency. Such a scheme would be possible without amending the EU treaties and would avoid negative equity at the central banks. The question is under what circumstances would this approach be suitable and proportionate?

     

A European perspective on public debt

Public debt in Europe has risen continuously over the last two decades. How is the transition to European Economic and Monetary Union, with the increasing economic interdependence between individual member states which it involves, likely to affect this situation? Which policy issues are of particular relevance in this setting?     

Wettbewerb zwischen wirtschaftspolitischen Modellen in Europa

In 2000 the European Union adopted its motto, of “Unity in diversity”. But in fact, economic policy regimes differ among member states and the people are not willing to leave the current path or to vote for painful political actions. In the midst of the present crisis, Europe is at the crossroads. Should people decide on a new constitution which allows more centralisation of powers, or should the principle of subsidiarity be reinforced? Problems in the eurozone intensified the coordination and monitoring of economic policy of the member states. The preconditions for a competition among different economic policy regimes vanish more and more. Institutional competition is not only price (tax) competition, but also quality (yardstick) competition. This is shown using debt brakes as a role model for other member countries of the European Union. But the debt brakes of the German Länder show that it can be problematic to transfer an institution from one country to another without taking into account its institutional environment.     

Managing the Dilemma of Discretion: The European Commission and the Development of EU State Aid Policy

This article examines the role played by the European Commission in the development of the European Union’s (EU) state aid policy. It does so through the prism of a “dilemma” that exists at the nexus of the Commission’s delegated authority to administer EU treaty state aid provisions, the discretion conferred on Commission authorities by the imprecise language in which those provisions are written, and the political and institutional control mechanisms EU member governments use to influence the exercise of that discretion. Examining Commission efforts to manage this dilemma over the history of the EU, we provide evidence to illustrate how the Commission’s approach adapted to shifting economic and political conditions.     

The Dilemma of Enlargement for the European Union's Regional Policy

The integration of the former communist countries of central and eastern Europe into the European Union creates a dilemma for the EU's regional policy. The EU's expenditure on regional policy (its ‘active’ regional policy) has been guided by political reactions to deepening or enlarging the EU, not by a rational strategy for regional policy. In contrast, the strong EU instrument of state aid control, developed for competition policy (its ‘reactive’ regional policy) has been relatively successful in avoiding a national race of regional subsidies among the member states. We show that a shift from active regional policy to reactive, competition‐oriented, regional policies is the preferred way for the established member states to handle the challenge of enlargement. At the same time, however, this shift is politically difficult for the accession countries to accept, despite the fact that this shift might prove better for them economically. This regional policy dilemma is one of the major obstacles for the full integration of the accession countries into the EU.     

Fiscal stimulus and its effects in the European Union

In the wake of the financial and economic crisis Keynesian macroeconomic management has once again come into the spotlight. The following article takes a critical look at the practice of expansionary fiscal policy in the EU’s old member states between 1980 and 2005 in order to answer the question whether fiscal stimulus can be a successful response to the current crisis in both the short and the long run.     

The USSR’s economic strategy up to the year 2000

The XXVIIth Congress of the CPSU marked the beginning of a new phase in Soviet economic policy which is to last to the year 2000. The Congress laid down the objectives for this phase and the means by which the objectives are to be achieved. Our article examines the question whether, or to what extent, the Soviet Union will be able to reach the goals it has set itself for this period.     

The economics of enlarging the European Union: Policy reform versus transfers

While the European Union will hardly be in a position to receive new members without extensive policy and financial reform, the discussion so far has exaggerated the link between reform and enlargement. It has also tended to neglect the economic benefits to be expected from integrating the CEECs into the EU and has been dominated by concerns about intra-EU transfers. In an attempt to placate those member states which have complained that they pay too much, recent proposals could give rise to more inefficiencies and disparities within the Union. The author is grateful to Beuter, Frank Bollen, Veerle Deekmyn and Les Metealfe for their comments on a previous draft. The author alone is responsible for the views expressed in this paper.     

从欧债危机看欧洲一体化进程中存在的问题

欧债危机根源于欧盟内部经济发展的不平衡以及欧盟内部体制上存在的缺陷。欧债危机的产生与欧洲一体化进程中存在的一味加快一体化进程,物质基础被破坏,欧盟制度安排存在缺陷,统一的货币政策与分散的财政政策无法有效协调等问题有着必然联系。要彻底解决欧债危机必须加快实现财政一体化,尽快缩小欧元区内部各国经济发展的差距;改革劳动力市场政策,促进劳动力要素自由流动;改革欧盟的制度安排,增强欧盟相关制度对成员国的约束力。     

Macroprudential Risk Management Problems in Brexit

Brexit is not only a historical chapter of the British — EU relationship, but it also carries immense challenges for fi nancial market stability in the short and medium run for the 28 member states of the European Union. The scale of these challenges depends heavily on the outcome of EU-UK negotiations. The European Systemic Risk Board plays a critical role in macroprudential supervision, a crucial policy challenge for the EU. However, there are doubts as to whether it will fulfill its mandate. The EU27 faces major problems in terms of prudential supervision after Brexit since a very large part of their wholesale banking markets are in the UK and thus will not be regulated by the EU after 29 March 2019. Indications point to a considerable risk of a new transatlantic banking crisis in the future.     

Assignment of Weights to the Member States of the European Union in Order to Model Their Relative Power Positions

Relative power of the member states of the European Union is expressed by weights assigned to the states on the basis of five criteria: population, gross domestic product, national area, political stability, and contributions to the European culture and civilization. The underlying idea is that ratios of these weights should approximate ratios of the five corresponding indicators. In addition, relative power can be moderated when the large member states save their power for issues about which they care more, and it can be amplified when the large states coordinate their efforts in order to dominate a coalition of smaller states. The results of the analysis are used to sketch a power distribution in the enlarged European Union.     

Negotiating in the European Union: Comparing Perceptions of Eu Negotiators in Small Member States

Negotiation is one of the major tasks of the 15 member states comprising the European Union (EU). However, not much is known about the behavior and perceptions of those negotiating on behalf of these member states. On the basis of the responses to a survey of EU diplomats and civil servants of the Netherlands, Belgium, Denmark, Ireland, and Portugal, an attempt has been made to develop a profile of "the" European Union Negotiator. The EU negotiator is less outspoken and more likely to compromise than an "ideal" profile of the diplomatic negotiator. While negotiators from these member states share important behavioral and attitudinal proclivities, they also differ in many significant ways. This healthy diversity of negotiating approaches is likely to be nurtured by the cooperative and synergistic atmosphere within the European Union.     

Convergence,trade and factor mobility in the European Union — Implications for enlargement and regional policy

The accession of ten new members in May 2004 means a considerable increase in income disparities in the European Union. At what speed has income converged in the past and what role have changes in trade relations and factor mobility played in this? What projections can be made for the catching-up process of the new member states? And what conclusions should be drawn for the future of EU regional policy?     

Europa am Scheideweg — ein Vorschlag zur politischen Weiterentwicklung

The European Union is approaching a point where it has to decide between two options: deepening political integration or reducing it. Economists tend to be sceptical. Many would prefer to reduce the scale of integration while returning more competences to member states. The debate, though, lacks a plausible vision for the path forward. Every stable currency union needs some kind of transfer mechanism. Once this notion is accepted, the installation of a “real” European Parliament with the power to raise taxes, particularly on capital income, should be considered.     

The EEC is now a Customs Union

The Customs Union among the member states of the European Economic Community has come into force on July 1, 1968. Its main effect has been the eradication of the ultimate 15 per cent that had remained of the original internal rales of import duty on industrial products between member states and the complete application of the joint tariff of the Community to industrial imports coming from outside the area. Farm produce, which is not subject to import duty but to “Abschöpfungen” (levies) will in future be governed by a unified system of import control. Recently, it has not always been a true community spirit that ruled the fate of the EEC because, in many countries, national selfishness seems to recover ground. This renders more indispensable than ever for the Community a successful completion of the Customs Union, which is thought to be the first big step towards closer political cooperation in Europe.     

K?rperschaftsteuers?tze, Verlustverrechnung und Steuerwettbewerb in der EU

This article describes the developments in corporate tax rates and loss-offset provisions in the EU countries and addresses the question of whether the new member states of the EU are applying lower tax rates and therefore boosting their loss-offset restrictions. Such a harmful tax competition has been feared with regard to the case law of the European Court of Justice that considers the cross-border loss offset. This study shows the opposite is true. In recent years, especially the new EU member states have extended the loss carry-forward period.     

“一带一路”背景下中国与欧亚经济联盟贸易效率及贸易潜力研究

以中国对EEU成员国出口贸易为视角,运用SFGM模型,选取2009—2018年的中国与欧亚经济联盟的数据对贸易效率及贸易潜力进行了测度。研究结果表明,欧亚经济联盟各成员国的经济规模、双边政府廉洁、贸易自由度、物流绩效、OFDI、共同边界等对中国出口具有显著的促进作用,通货膨胀也对出口起到促进作用,但作用不显著。双边的地理距离、是否内陆国、关税税率、汇率等对中国出口欧亚经济联盟具有明显的抑制作用,汇率也具有抑制作用,但不显著。根据研究结论提出针对性的政策建议,即加强双边合作,提升清关效率,完善基础设施质量,便利贸易和运输效率,提高物流服务质量;进一步降低关税和非关税壁垒,提高商品运输的效率,清除双方隐性贸易壁垒;加强政府对金融机构的监管力度,加大信贷资金配置规模;积极推动中国与EEU成员国建立自贸区;实现双边资本、信息等资源的共享,从而提高贸易效率,减少贸易阻力。最终着眼于命运共同体及全球价值链视域,推动双边贸易发展。     

Labour demand in the EU and returns to scale: A production function approach

The paper tests the hypothesis that small member states of the European Union (EU) experience economies of scale constraints. This study adopts a production function approach, utilising data from the 27 differently sized EU member countries. The results confirm the hypothesis and indicate that larger EU member countries incur lower costs per unit of output produced when compared to the smaller ones. This finding has important implications for small EU member states, including that smaller countries have to overcome their economies of scale constraint in order to attain and maintain international competitiveness. This disadvantage is particularly relevant for small states, because these states tend to be highly dependent on international trade, in which case international competitiveness is a major issue.     

Market Integration Without Policy Integration: A Comparison of the Shortcomings of Mercosur and the Eurozone

ABSTRACT

The major problem of Mercosur has been the lack of any policy coordination, which has resulted in periodic crises among member countries. It was thought that the Eurozone parts of the European Union represented a more mature institution, because member countries were willing to waive sovereignty over a major policy instrument (monetary policy), while maintaining independence over fiscal policy. The result of this, however, has led to even greater distortions than had there been no macroeconomic coordination at all.