Some Eurolinks

Christian Gros gets, I think, to the heart of the matter:

The key to ensuring the future of Europe’s social-security systems, and thus its social model, is faster growth. And, again, it is difficult to see how more Europe would improve the situation. The obstacles to growth are well known, and have existed for a long time without being removed. The reason is quite simple: if there were a politically easy way to generate growth, it would have been implemented already

The question isn’t whether more policy areas are moved to the Commission (or in practice the ECB) or not, it’s what the policy is. Foreign Policy argues that Christine Lagarde has changed it:

She directed her chief economist, Olivier Blanchard, to publish new estimates showing that the fiscal multipliers — a measure of the impact of budgetary tightening on economic growth — on which the IMF had based its financial support programs in Greece, Ireland, and Portugal were excessively low. The new estimates put the fiscal multipliers between 0.9 and 1.7 — up from the 0.5 that had been previously assumed. In other words, the damage done by budget tightening was likely to be two to three times as bad as the IMF had previously estimated.

Armed with these estimates, Lagarde has pushed back against the ECB and EC [ed: we think they mean the Commission], arguing that by deepening the recession, excessive budget tightening can be counterproductive in stabilizing a country’s public finances. This has led her to recommend that Ireland, Portugal, and Spain not be subjected to another round of belt tightening if their economies continue to falter. Instead, she has argued that they should delay meeting their final budget deficit targets to allow domestic economic recovery to take hold.

Corporate Europe lives.

European operators have not talked about creating a single network with competition authorities, according to a Reuters, although they have expressed an interest in greater consolidation.

A Financial Times report earlier this week said leading operators had discussed with Joaquin Almunia, the EU’s competition chief, the idea of creating a pan-European infrastructure. The aim would be to offer better integration between Europe’s national telecoms markets.

However the later report, quoting unnamed sources, says the meeting had focused on whether the number of operators in Europe could shrink through mergers and takeovers, a process requiring regulatory scrutiny…

I can’t really comment on this, but I’m suspicious of the blue and yellow jacket round the bad whisky.

This entry was posted in A Fistful Of Euros, Economics, The European Union by Alex Harrowell. Bookmark the permalink.

About Alex Harrowell

Alex Harrowell is a research analyst for a really large consulting firm on AI and semiconductors. His age is immaterial, especially as he can't be bothered to update this bio regularly. He's from Yorkshire, now an economic migrant in London. His specialist subjects are military history, Germany, the telecommunications industry, and networks of all kinds. He would like to point out that it's nothing personal. Writes the Yorkshire Ranter.

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