EconPol Opinions

Illustration EconPol Opinion 8

How to exit the euro in a nutshell – ‘Il Piano Savona’

Daniel Gros

Paolo Savona will now become Minister for EU affairs in the new Lega/5 stars government. He has been the main author of a plan for Italy’s exit from the euro. This Plan, which has now been made public, is briefly analysed here to shed some light on the strategy that has apparently been adopted by the Lega Party which has insisted on his participation in the government.

... Details
Illustration EconPol Opinion Series

Trade Wars in a ‘Winner-takes-all’ Economy

Daniel Gros

Trump’s trade follies have attracted the attention of policy makers and markets across the world. This is only natural given that the US has switched from being a major underwriter of the global multilateral trading system to its number one enemy. But dramatic changes like this rarely happen without some deeper undercurrent that enables erratic politicians to overturn long-established structures and mechanisms. A closer look at the key issue between the US and China reveals that today’s ‘trade war’ is taking place in a different economic framework than in the past.

... Details
Cover EconPol Opinion blanco 2018

A Trumpian Turn in EU Trade Politics and the Silence of Germany

Gabriel Felbermayr

On December 5, 2017, the European institutions - Commission, Council, and Parliament - reached political agreement on reforming the EU’s trade defense instruments. This “modernization” of anti-dumping legislation is, in fact, an attempt to provide the EU with stronger tools to tackle the allegedly “unfair” practices of its trade partners. On its website, the Commission advertises that the deal will enable the EU to impose higher duties on dumped products. Does Germany’s position signal a new and worrying stance toward free trade?

... Details
Sustainable Fiscal Policy Calls for More Restrictive Debt Rules for Eurozone

Sustainable Fiscal Policy Calls for More Restrictive Debt Rules for Eurozone

Clemens Fuest

In view of loud complaints over alleged austerity policy in Europe, the call for tougher debt ceilings seems untimely. It is claimed that the current rules are too restrictive and will hamper public investment. The next German federal government's position on reforming European Monetary Union is one of the main issues on the table in the coalition negotiations and it is highly controversial. ifo President Clemens Fuest is convinced that a serious application of the existing concepts for ensuring sustainable fiscal policy would call for stricter, not softer debt rules. This Opinion explains why Europe needs stricter debt rules and should not follow in Japan’s footsteps.

... Details
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.

... Details