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German Federal Constitutional Court Chews on Role of European Central Bank
Verdicts from Karlsruhe usually serve as pacifiers for the German public and, more recently, for the eurozone as a whole. Remember the ruling on the ESM and the Fiscal Compact, which the German Federal Constitutional Court concluded was reconcilable with the country’s basic law, or Grundgesetz, in September 2012. What a relief this announcement was…
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Reckless Spending and Excessive Wage Growth: Myths Debunked
If I were to pinpoint the two most harmful and most often repeated myths at the core of the orthodox account of the euro crisis, these would surely be, first, that the public debt crisis across the eurozone was solely or mostly caused by reckless government spending; and second, that the fundamental competitiveness problem of…
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The Commission and the European Semester: is the Fox Guarding the Chicken?
2013 is a pivotal year for Commissioner Rehn, the European Semester and the Commission. All three have had to prove their legitimacy regarding economic governance. Rehn’s credibility and that of the European Semester centre on the reputation of the Commission and that of DG EcFin in particular. Given the importance of the European Semester, it…
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Frau Merkel and the ‘C-Word’
Both the European Commission and the International Monetary Fund (IMF) have just published findings about the performance of the German economy and the state of structural reforms. While there is plenty of discussions in Berlin about what ‘the others’ (in particular France) are not getting right, there is not much of a debate on what…
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Will France Become like the Netherlands or the Netherlands like France?
To understand the euro project we need to go back to 1989 and the frustrations over exchange rate adaptations under the European Exchange Rate Mechanism (ERM). France was frustrated by the hard Deutsch Mark and, occasionally, lost billions on aligning the FF to the DM. Mitterrand used the German unification as a lever to get…
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Help the Bruised French out of the Corner!
There has been a lot of bad news last week: the Eurozone is further contracting, France is moving into recession and the EU has been dramatically losing support all across Europe according to figures published in a Pew poll. Watching President Hollande’s Élysée address one year into his presidency one saw a cornered head of…
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Dangerous Fantasies and Really Existing ‘Adjustment’
It has been two years to the month since the original Memorandum of Understanding (MoU) was signed between the ECB-EC-IMF Troika and the Portuguese Government. Elections followed shortly after, bringing into power a new conservative coalition government, which proceeded to implement the structural adjustment programme with unbridled enthusiasm. In the words of Prime Minister Passos…