SE Blogs

Our blogs are short commentaries on current affairs issues.

Eurozone Fiscal Policy – Still Not Getting It

Simon Wren-Lewis

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 […]

This is Recovery? Germany, ‘Powerhouse’ In Need Of A Jump-Start

John Weeks

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 […]

Reading The Greek Deal Correctly

James Galbraith

On Friday as news of the Brussels deal came through, Germany claimed victory and it is no surprise that most of the working press bought the claim. They have high authorities to quote and to rely on. Thus from London The Independent reported: several analysts agreed that the results of the talks amounted to a […]

Brave Little Deflationary Belgium

Ronald Janssen

In a speech delivered last week in London, Peter Praet, member of the executive board of the ECB, formulated the key challenge the Euro Area economy is facing in a very clear way: …. an oil price shock improves the terms of trade, increases households’ real disposable income and reduces the input costs for firms, thus […]

Which Side Are You On, Jeroen Dijsselbloem?

David Lizoain

Just over a hundred years have passed since the greatest failure of European social democracy. The workers’ movement was unable to halt the needless slaughter of World War I. First, Jean Jaures was assassinated, silencing his powerful anti-militarist voice. Soon after, the German SPD voted to authorize war credits for the Kaiser. Proletarian internationalism gave […]

Yanis Varoufakis: The Return Of The Conviction Politician?

Henning Meyer

Ahead of the crucial negotiations in Brussels today the new Greek finance minister, Yanis Varoufakis, has published an opinion article in the New York Times responding to commentators who alleged that he plays a game in the negotiations given his background as a game theory scholar. We published the column by Anatole Kaletsky that made […]

Structural Reforms And Wages: Commission Winter Forecasts Deliver Contradictory Policy Messages

Ronald Janssen

There is something strange about the economic forecasts the European Commission (EC) published last week. On the one hand, the EC is worried about so-called ‘second round effects’ whereby low inflation causes nominal wage dynamics to weaken further, thus causing low inflation to persist, possibly even raising the risk of outright deflation. Deflation as well […]

Greece Deserves German Support

Fabian Lindner

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 […]

Inequality, Business Leaders And More Delusions On The Left

Simon Wren-Lewis

Those who think current levels of inequality are not a problem can skip this one. The Blair governments did a lot to fight poverty, but were famously relaxed about inequality, or more specifically the earnings of the 1%. For many in those governments this reflected their own views, but it also reflected a political calculation. […]

The ECB Has Shaken The Eurozone’s Utopian Foundations

Ann Pettifor

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 […]

We Need An Industrial And Innovation Policy For Europe

Paolo Pini

The prolonged economic crisis since 2008 has drastically reduced incomes and employment levels and the promised recovery will not reabsorb unemployment, particularly in Europe. Nevertheless, economic policy in Europe is sticking to past recipes based on two mainstays: fiscal austerity and labour flexibility. This strategy does increase the short-run cost competitiveness of European firms overseas […]