In a speech delivered at the Central Bank of Latvia on October 17th, Benoit Coeuré, member of the executive board of the ECB and apparently one of the currently few close confidants of Mario Draghi, argued that speeding up the pace of structural reforms in the Eurozone could be key to averting the area from […]
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How Social Europe Is Destroyed – And What Can Be Done To Rebuild It
Once upon a time, the European Commission dreamt of making the European economy ‘smart’ – by investing in education, research and innovation -, more ‘sustainable’ – by moving Europe into a low-carbon economy – and ‘inclusive’ – by boosting job creation and reducing poverty. That was in the year 2010, it was the Commission’s “Europe […]
Why The Eurozone Is Once Again Staring Into The Abyss
Growth in the Eurozone has declined significantly over recent months, raising fears that Europe could be heading toward another economic crisis. Bob Hancké writes on what it would take to generate growth in Eurozone states. He argues that the best – and possibly only – option for European governments is to adopt a strategy of public investment […]
The Untold Story Of The Eurozone Crisis
Everyone knows that the Eurozone suffered a crisis from 2010 to 2012, as periphery countries could no longer sell their debt. A superficial analysis puts this down to profligate governments, but look more closely and it becomes clear that the formation of the Euro itself led to an excessive monetary stimulus in these periphery countries. […]
Why Austerity Is Contagious
Austerity is contagious: The case of France France is finding itself between a rock and a hard place. On the one hand, with 54% of companies reporting in the third quarter 2014 that they find activity constrained by a lack of customers, the main problem is clearly on the side of demand. On the other […]
Why The Eurozone Suffers From A Germany Problem
When, almost a year ago, Paul Krugman wrote six posts within three days laying into the stance of Germany on the Eurozone’s macroeconomic problems, even I thought that maybe this was a bit too strong, although there was nothing in what he wrote that I disagreed with. Yet as Germany’s stance proved unyielding in the face of […]
Europe Is Back At Square One
Europe is back at square one. On the verge of a third recession in five years, the relentless tide is even crashing against the insurmountable walls of the German factory powerhouse. Stagnation yet again in the Eurozone – this time accompanied by a certain whiff of Japanese-style deflation. Once more the markets are getting nervous: a volatile […]
The EU Recovery That Never Was
Economic recovery in the Eurozone is not delayed. It is non-existent. The Financial Times for the first day of October carried several articles assessing the European economies, written as if a prize would go to the most pessimistic — stagnation and decline of EU manufacturing, the European Central Bank initiates asset purchases to prevent deflation […]
Europe’s Austerity Disaster
“If the facts don’t fit the theory, change the theory,” goes the old adage. But too often it is easier to keep the theory and change the facts – or so German Chancellor Angela Merkel and other pro-austerity European leaders appear to believe. Though facts keep staring them in the face, they continue to deny […]
The Social Atlas Of Europe
Should we conceive of Europe as a collection of individual states or as a group of distinct cities and regions which are part of a larger whole? Dimitris Ballas, Danny Dorling and Benjamin Hennig present figures from their new ‘Social Atlas of Europe’, which provides a new way of illustrating the key social and geographic features across European countries. They […]
Charting Decline In Europe
Two years have passed since Mario Draghi promised to do “whatever it takes” to save the euro. The bond markets have calmed down but the crisis of the euro zone has not yet abated. Isolated pieces of positive information do not automatically imply a sustained recovery let alone justify triumphalism. While improving marginally, the rate of unemployment […]
Why The ‘Poundzone’ Is As Sub-optimal A Currency Area As The Eurozone
One of the arguments frequently made against the euro is that the Eurozone represents a ‘non-optimal’ currency area. This derives from the notion that the variations between regions within the Eurozone are simply too large for them to share a single currency without encountering problems. Waltraud Schelkle assesses this argument by comparing the experience of the Eurozone […]
Germany And Europe’s Surplus Of Stagnation
While the rest of the world recovers from the Great Recession of 2008-2009, Europe is stagnating. Eurozone growth is expected to be 1.7% next year. What can be done about it? One solution is a weaker euro. Earlier this month, the chief executive of Airbus called for drastic action to reduce the value of the euro against the dollar […]
Inequality is Falling Globally! (And Similar Nonsense)
I bet you think that the rich are getting richer and the poor poorer. A few well-known facts might lead you to this conclusion. For example, in the United States income after tax per household is now over 100% greater than forty years ago (1972), while average weekly earnings in the private sector are 14% […]
The Social Investment Package And The Europe 2020 Policy Agenda
The European welfare state and the European Union (EU) find themselves caught up in a double bind in the aftermath of the global financial crisis. On the one hand, domestically, EU members are politically bound by widely cherished national social contracts on welfare provision, which in hard economic times are especially difficult to renege upon. […]
Europe Does Not Understand Deflation And Wages
Led by the IMF, the main body of mainstream economists is now aware of the danger that debt deflation is raising for several Euro Area member states. This awareness is surely a good thing. However, what is conspicuously absent in this discussion is the link with wages. It is as if ‘lowflation’ (as the IMF […]
Changing Course Towards A Social Europe
Joseph Stiglitz, who won the Nobel Prize in 2001 for his work on how markets work inefficiently was once asked about his opinion on austerity measures. “It reminds me of medieval medicine,” he said. “It is like blood-letting, where you took blood out of a patient because the theory was that there were bad tumours. And very often, […]
Social Europe In A Climate Of Austerity
The Need For Social Dialogue To Improve Distribution Eurofound stands for Improvement of Living and Working Conditions through social dialogue. Currently, in the midst of high unemployment and increasing inequality, living and working conditions for ordinary people are worse than in 2007. But recession is not the only problem. Even when countries are recovering, the […]
It’s Time To Stand Up To Troika Austerity (Part II)
In the first part of this article I looked at the mounting evidence against austerity by organisations as varied as Caritas, the ILO, the Council of Europe and the IMF. So why is the European establishment pushing for more of the same? Social and economic misery and despair, growing inequality, dwindling public services, loss of hope and […]
It’s Time To Stand Up To Troika Austerity (Part I)
In my book, The Battle for Europe: How an Elite Hijacked a Continent – and How We Can Take It Back, published some months ago by Pluto Press, I argued that the austerity policies imposed on European member states (especially those of the periphery) by the Berlin-Brussels-Frankfurt ‘axis of rigour’ and by the troika were […]
Failing Union Of Capitalism And Democracy Fuels Rise In Inequality
Recent weeks have been all about elections and broken promises: from early April to mid-May, half-a-billion Indians went to the polls in what many described an astonishing display of democratic prowess. Later, millions of European citizens elected their representatives to the often-criticised and never much-loved European Union parliament. Meanwhile, Australian prime minister Tony Abbott decided […]