politics, economy and employment & labour
Social Europe is an award-winning digital media publisher. We use the values of freedom, sustainability and equality as the foundation on which we examine society’s most pressing challenges. We are committed to publishing cutting-edge thinking and new ideas from the most thought-provoking people. This archive page brings together Social Europe articles on the economy.
There is an interesting debate going on in Europe about the likely consequences of the TTIP (Transatlantic Trade and Investment Partnership). Much of the real debate is (or should be) about the proposed Investor-State dispute resolution (ISDS) and the desirability of regulatory harmonization when nations have different preferences about how these regulations should be designed. […]
In 2011, the Nobel laureate economist Paul Krugman characterized conservative discourse on budget deficits in terms of “bond vigilantes” and the “confidence fairy.” Unless governments cut their deficits, the bond vigilantes will put the screws to them by forcing up interest rates. But if they do cut, the confidence fairy will reward them by stimulating private spending more than […]
Any ‘economic growth’ strategy which ignores the all-important strand of promoting, encouraging and developing innovation is doomed to fail. It has been more than a decade since Donald Rumsfeld, the hapless US secretary of defense, branded Europe’s most advanced economies as “old Europe”. The reaction at the time was merciless. German and French ministers decried […]
The developed world seems to be moving toward a long-term zero-interest-rate environment. Though the United States, the United Kingdom, Japan, and the eurozone have kept central-bank policy rates at zero for several years already, the perception that this was a temporary aberration meant that medium- to long-term rates remained substantial. But this may be changing, especially […]
At first glance, the eurozone economy seems like it might finally be on the mend. Stock markets are rallying. Consumer confidence has picked up. Lower oil prices, a cheaper euro, and quantitative easing by the European Central Bank are all expected to boost growth. ECB President Mario Draghi claims that “a sustained recovery is taking hold,” while […]
Like many readers, I still vividly recall when Nokia was the dominant player in mobile phones, with over 40% of the market, and Apple was just a computer company. I remember when Amazon was known only for books, and when dirty taxis or high-priced limousines where the only alternative to public transport or my own […]
A while ago I participated in a TV debate on Greece (German speakers can follow this link). One of the points of contention was whether investment in Greece has been structurally weak, hampered by overregulation or corruption – in short: it’s the supply side, stupid – or whether the country’s economic problems are primarily derived […]
Whenever I write a post critical of German views on Eurozone policy, I get comments which can be paraphrased in the following way. Greece (and maybe other Eurozone countries) are incapable of governing themselves properly, and when they get into difficulties Germany has to bail them out, so it is only reasonable that as a […]
Getting Stupid Capital Flows Off The Hook The analytical note on the next steps for better economic governance that was published mid- February during the informal European Council reopens the discussion on how to obtain a strict coordination of national economic policy making in the Euro Area. Or, to put it more bluntly, how to […]
The battle with the creditors of the bankrupt private banks in Iceland is still not over, although the country won the Icesave dispute, graduated from IMF´s austerity programme in 2011 and jailed some of its ‘banksters’. The first phase of the battle with creditors ended in January 2013 when the EFTA court ruled that Icelandic […]
As the Euro crisis hit, European policy makers reacted with headless austerity policies and a tightening of the Stability and Growth Pact (SGP). The failure of these policies is obvious: after seven years of deep economic crisis the Euro area is on the verge of deflationary stagnation. Public investment – which should have stabilized the […]
Angela Merkel proclaimed at an early stage that the Greeks could not retire earlier and have longer holidays than the Germans. Der Spiegel’s interpretation was: “We aren’t going to give our hard-earned German money to lazy southern Europeans.” Sweden’s Minister of Finance, Anders Borg, echoed this whilst on the way to an EU meeting: “Obviously, Swedes […]
Monetary policy has become increasingly unconventional in the last six years, with central banks implementing zero-interest-rate policies, quantitative easing, credit easing, forward guidance, and unlimited exchange-rate intervention. But now we have come to the most unconventional policy tool of them all: negative nominal interest rates. Such rates currently prevail in the eurozone, Switzerland, Denmark, and […]
The impact of fiscal austerity on the Eurozone as a whole has been immense. In my recent Vox piece, I did a back of the envelope calculation which said that GDP in 2013 might be around 4% lower as a result of cuts in government consumption and investment alone. This seemed to accord with some model […]
The German government has been a strong supporter of austerity programmes, arguing that the associated goals of deficit and debt reduction provide the best, if not the only, route to economic recovery in Europe. Some writers reach back to the hyper-inflation of the 1920s to explain this faith in the virtues of belt-tightening. Recent release […]
On January 21st, 2015, the austerity-based monetary regime of the Eurozone (EZ) was officially abandoned as the European Central Bank (ECB) launched its Quantitative Easing (QE) programme of sovereign bond purchases on secondary markets. The European Court of Justice’s attorney general has certified that the QE programme is not in breach of EZ Treaties, but […]
Yanis Varoufakis, the economics professor and new Greek finance minister, used a press conference with Wolfgang Schäuble last week in Berlin to issue an emotional appeal to Germans for solidarity; they, after all, knew from their experiences of the 1930s how bad the political consequences of an economic depression could be. Are those just the […]
The 4th February late-night decision by the European Central Bank to reject Greek bank collateral for monetary policy operations will, I confidently predict, precipitate not just a run on Greek banks; not just greater price instability across the Eurozone – but ultimately, the collapse of the fantastic machinery that is the ‘self-regulating’ economy of the […]
Europe’s citizens are torn between the European integration project, which requires market liberalization and competition rules promising greater welfare, and national welfare states, which are the framework for redistributive policies and provide social protection. Yet, the European Union is not averse to social welfare. The European model aims for “a highly competitive social market economy” […]
With up to €60 bn of debt a month being bought for the next 19 months, the ECB’s programme of quantitative easing (QE) is massive. But its programme suffers from three major shortcomings (see below). These shortcomings imply that the ECB’s QE programme, even if it does represent a major leap, needs serious redesigning. It […]
In 2014, the world economy remained stuck in the same rut that it has been in since emerging from the 2008 global financial crisis. Despite seemingly strong government action in Europe and the United States, both economies suffered deep and prolonged downturns. The gap between where they are and where they most likely would have […]
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