Social Europe articles on the economy

Shareholders own the corporation, and the duty of the directors to maximise shareholder value follows from that. I have lost count of the number of times I have been told “that is the law”. But it is not the law. Certainly not in America, as Lynn Stout, a professor at Cornell University Law School, has […]

Since the start of this year the ECB has been applying “quantitative easing” (QE), i.e. a program injecting large amounts of money into the economy. Every month the ECB is buying 60 billion euros of government bonds and in so doing injects the same amount of money into the economy. Up to today the total […]

Although Eurozone countries have returned to growth since the financial crisis, the pace of the recovery remains relatively slow and fragile, as underlined in recent economic forecasts by the IMF and OECD. Xavier Timbeau writes that in the current economic climate Europe should view the transition to a zero carbon economy as a key investment opportunity. He […]

On June 5th, 1947, the US Secretary of State, George C. Marshall, said at Harvard University: The remedy lies in breaking the vicious circle and restoring the confidence of the European people in the economic future of their own countries and of Europe as a whole. Sixty-eight years later, the need for a European economic […]

Nothing illustrates more starkly the difference between the preoccupations of financial market participants and the needs of businesses and households than the subject of liquidity. Last week the Bank of England held an open forum to discuss what the financial sector contributes to the real economy, and I took part in a discussion on the […]

After eight months of continued contraction, the Chinese manufacturing juggernaut is officially stranded. The rollercoaster ride of the summer of 2015 with its market crashes and sudden policy changes has unleashed widespread fear in government offices of losing further points of GDP growth. The latest estimate (probably optimistic) of a 6.9% growth rate appears disappointing […]

If one were seeking a perfect example of why it’s so hard to make financial markets work well, one would not have to look further than the difficulties and controversies surrounding crowdfunding in the United States. After deliberating for more than three years, the US Securities and Exchange Commission (SEC) last month issued a final rule that […]

Earlier this year, the so called ‘Five Presidents’ report’, authored by Jean-Claude Juncker, Donald Tusk, Jeroen Dijsselbloem, Mario Draghi, and Martin Schulz, was published, outlining plans for strengthening economic and monetary union. Iain Begg writes on proposals adopted by the European Commission on 21 October to implement the recommendations in the report. He notes that the new […]

Every advanced country has a bankruptcy law, but there is no equivalent framework for sovereign borrowers. That legal vacuum matters, because, as we now see in Greece and Puerto Rico, it can suck the life out of economies. In September, the United Nations took a big step toward filling the void, approving a set of principles […]

Several years ago the idea that fiscal austerity could induce growth, “expansionary austerity”, had a brief flowering before withering under the heat of ridicule. Recently it resurfaced under a different name, “deflationary boom”. If expansionary austerity was oxymoronic, deflationary boom is simply moronic. To deconstruct and disinfect deflationary boom we need an operational definition of […]

The global financial crisis has exposed the deep flaws of the euro, and particularly Maastricht’s original sin: to have deprived member states of their fiscal autonomy – by taking away their power to issue money and by imposing strict (and totally arbitrary) limits on government deficits through the Stability and Growth Pact (SGP) – without […]

The debt crisis may no longer be in the spotlight but the financial situation in Greece remains complex. Greek banks continue to survive at the edge of bankruptcy, kept afloat only by Emergency Liquidity Assistance (ELA) from the ECB and by still-enforced capital controls. After the August “agreement”, the Troika has promised the Greek government €25 […]