Current publications

Catalonia's Lessons for a European Fiscal Union

Catalonia’s Lessons for a European Fiscal Union

Friedrich Heinemann

Spanish cohesion is currently facing a severe test in the chaotic conflict surrounding the referendum on Catalan independence. Of particular importance is the fiscal dimension of the issue. A highly influential argument of the independence movement has pointed to the financial burden placed on the region combined with Catalonia’s limited budgetary autonomy. This is an experience that Europe should pay close attention to, given the ambitious reform proposals currently discussed for the EU and the euro area many of which point to greater centralisation.

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The Commission's View on Strenthening the Euro Area: Barking Up the Wrong Tree?

The Commission’s Views on Strengthening the Euro Area - Barking Up the Wrong Tree?

Daniel Gros

Juncker’s proposals on the euro area are lacking in substance and coherence. His starting point was that the euro should be considered the currency of the Union, not just the currency of some Member States. From a formal point of view this is correct, as the euro is indeed designated in the European Treaties as the currency of the Union. The countries that are not part of the euro area are considered to have a temporary derogation. Network member David Gros, Director of CEPS, says that the reality is,  however, different and explains why small, concrete steps aimed at strengthening financial stability would have been more useful. 

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Cover EconPol Working Paper 04 2017

The Case for Co-Financing the CAP

Friedrich Heinemann

The Common Agricultural Policy (CAP) was set up in a time when the memory about post-war food shortage was fresh, Europe was a large net importer of agricultural products, agricultural production was still highly labour-intensive, food was a major item in a typical consumer basket and significant shares of the work-force received their major income from the agricultural sector. Today, agricultural production is capital-intensive with a low share of total labour employed and food spending. Read in this paper by network member Friedrich Heinemann/ZEW why CAP in its current size is still part of the problem and which conclusions should be drawn.

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Cover EconPol Working Paper 03 2017

Firm Responses to an Interest Barrier: Empirical Evidence

Jarkko Harju, Ilpo Kauppinen and Olli Ropponen

Finnish VATT economists Jarkko Harju, Ilpo Kauppinen and Olli Ropponen have studied the interesting effects of an interest barrier that was introduced in Finland to restrict the profit-shifting opportunities of multinational enterprises (MNEs). They employed full population data of Finnish, Swedish and Danish MNEs and a difference-indifferences methodology, where Swedish and Danish MNEs serve as a control group.

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Europe at the interdependence war

Europe at the Interdependence War

Roberto Tamborini

The EMU has been founded on the exclusive national responsibility doctrine, except for monetary sovereignty devoted to a single bank. Italian economist Roberto Tamborini, Università di Trento, speaks out on why the strong interdependent linkages among the Partner countries impair the national responsibility notion and make the country-by-country approach of the EMU policicies so dramatically harmful.

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Cover EconPol Policy Brief 2

Why are Macroeconomic Imbalances so Important for the European Monetary Union?

Roberto Tamborini

Are convergent growth rates a sine-qua-non condition for a monetary union? Is there any economic tendency towards this outcome? Economist Roberto Tamborini, Università di Trento, says: "Higher growth across Europe is a valuable aim but is the devotion to pro-growth and convergence policies and to the formalisation of the convergence process in Europe's Economic and Monetary Union the correct answer?

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How to Reduce Agricultural Subsidies From EU Funds

Friedrich Heinemann

“EU agricultural policy seems anachronistic. There is no justification for its dominant position in the EU budget,” says Professor Friedrich Heinemann, head of ZEW’s Research Department “Corporate Taxation and Public Finance” and author of the new ZEW study in cooperation with Bertelsmann Stiftung. The new ZEW study recommends reducing the costs of agricultural subsidies through significant national contributions to agricultural support. “If the Member States wish to privilege their farmers over other economic sectors, they should do so without passing the burden onto European taxpayers,” explains Friedrich Heinemann.

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 Cover EconPol Policy Report 02 2017

The German Current Account Surplus: Where Does It Come From, Is It Harmful and Should Germany Do Something about It?

Gabriel Felbermayr, Clemens Fuest and Timo Wollmershäuser

In the international economic policy debate Germany is criticized heavily for its current account surplus. This paper describes the factors that have led to the surplus and discusses the policy implications. The current account surplus is mainly a result of higher savings, driven by an ageing population. The claim that the German surplus causes economic damage either in Germany or in other countries is not well founded. But Germany faces growing political pressures related to the threat of protectionism, the risk that a growing creditor position may lead to political backlash, and the fact that European Macroeconomic Imbalances Procedures imply that current account surpluses should not exceed six percent of GDP. To reduce the surplus Germany should focus on a corporate tax reform to boost private investment.

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