EconPol Opinions

Cover of EconPol opinion

How Corporate Debt Burdens Threaten the Economic Recovery After COVID-19 and Why Planning for Debt Restructuring Should Start Now

Bo Becker (Stockholm School of Economics, CEPR & ECGI), Ulrich Hege (EconPol Europe, Toulouse School of Economics, ECGI), Pierre Mella-Barral (Toulouse Business School)

EconPol Europe's Ulrich Hege (Toulouse School of Economics, ECGI) and co-authors Bo Becker (Stockholm School of Economics, CEPR & ECGI) and Pierre Mella-Barral (Toulouse Business School) discuss the economic risks of COVID-19 and the increasingly plausible steep protraction, examine the mitigating support programs governments are putting into place for households and firms, and explain why planning for debt structuring should start now.

This article first appeared on VoxEU.org https://voxeu.org/article/corporate-debt-burdens-threaten-economic-recovery-after-covid-19

... Details
Cover of EconPol Opinion

This Time is Different

Daniel Gros (EconPol Europe; Director, CEPS)

A recession is now inevitable, says Daniel Gros (CEPS, EconPol Europe), but it can be followed by a vigorous recovery. The memory of the financial crisis of 2008/9 is fresh enough to ensure the combined efforts of central bankers and governments can keep financial markets working and prevent mass bankruptcies. Policymakers at every level are using every lever at their disposal to avoid a repeat of the freezing of financial markets, which was so damaging ten years ago. The lesson was learned and is now being applied at a vast scale throughout Europe and the US. Containing the virus and protecting public health is where Western societies have to learn and adapt quickly.

... Details
Cover of EconPol opinion

Challenges of Negotiating a Free Trade Agreement Between the UK and the EU

Clemens Fuest

EconPol Speaker Clemens Fuest has called for the UK Government to abandon its plan to complete the Brexit transition by the end of 2020. Prof Fuest describes the UK’s decision to rule out a customs union and pursue its own trade policy as ‘regrettable’, highlights fears from both the UK and EU over the potential lack of a “level playing field”, calls tax policy “a minefield of disagreement” and says climate policy “poses a further challenge to the free trade agreement.”

... Details
Cover of EconPol opinion

Green Government Debt for the ‘Green Deal’?

Friedrich Heinemann

The ‘Green Deal’ in its objective is highly ambitious and will absorb substantive financial resources, and it is not surprising that the potential role of higher public debt is being discussed. The European Central Bank is increasingly requested to provide green finance through its asset purchase programmes and similar suggestions are being made in national debates. But does an ambitious climate policy really provide compelling arguments for higher public debt? Friedrich Heinemann (EconPol Europe, ZEW Mannheim) argues that fighting climate change is not a convincing justification to open new loopholes in European debt rules and fiscal or monetary institutions.

... Details
Cover of EconPol opinion

Assessing the Cost of Uncertainty Created by Brexit

Fabien Tripier (EconPol Europe, CEPII, Université Paris-Saclay)

The uncertainty surrounding Brexit is costing the UK economy £16 billion per year, according to calculations from EconPol researcher Fabien Tripier (Professor of Economics at the Université Paris-Saclay and scientific advisor at the CEPII). The cost is based on the level of political uncertainty, the effect of that uncertainty on the economy, and the comparative trajectory in the absence of uncertainty.

... Details