A fresh interview offered to PROFIL (Austria) on why SYRIZA’ s proposals for Greece and for Europe are radical only to the extent that they are rational and therapeutic for the Eurozone as a whole. CLICK HERE (in German only I fear)
In an article entitled “ECB should fire up its helicopters“, Clive Crook comments positively on this proposal for QE by the ECB taking the form of massive purchases of EIB bonds. The article also surveys other important ideas that would, if the political will were to be found, be helpful in the fight against misanthropic, unnecessary, stagnation. Click here or read on… Continue reading
Regular readers need no introduction to Stuart Holland; co-author of The Modest Proposal, former British MP and aid to Jacques Delors, responsible for starting the conversation about the Eurozone’s need for eurobonds (in… 1993), creator of the European Investment Fund and a staunch advocate of the need to turn the European Investment Bank into the Eurozone’s pillar of growth (wi the ECB remaining the pillar of monetary stability). Here he is writing, in muffled exasperation, about the frightful Juncker so-called recovery proposal. [Readers may also take an interest in Stuart’s latest book Europe in Question: And what to do about it.] Continue reading
On 30th October I was invited to address a meeting of German, Austrian and Swiss pension fund managers on how they should make sense of the Eurozone’s current state of play. In this keynote (click below for the audio and the accompanying slides) I present an explanation of the causes underlying the impossible dilemmas pension fund and fixed income managers are facing in Europe today. Plus a proposal of what the ECB ought to do to make a substantial difference.
For the keynote’s audio click below and, once its starts, open Zurich Powerpoint (and click to change slides when you hear the gong in the background)
The ECB’s recent dalliance with QE-light is macro-economically irrelevant. For a long while we have been arguing (see Policy 3 of the Modest Proposal) that it is high time that the ECB buys en masse EIB bonds, thus enabling the EIB to issue new bonds as part of a European Recovery Program; an investment drive that will mobilise the glut of idle savings, neither adding to public debt nor inflating financial assets (or, indeed, the fear of fiscal transfers from the core to the periphery). It is the optimal strategy for defeating deflation and whipping up growth without inflating asset prices. It was with pleasure that we recently read Guntram Wolff’s article which seems to endorse this proposal. Continue reading
[This post was later published by Open Democracy]
Behind the European Union’s official ‘line’ that the worst of the Euro Crisis is behind us, a flurry of proposals for institutional changes reveal a deep-seated anxiety about the Eurozone. Indeed, in recent weeks, even the German finance minister, Mr Wolfgang Schäuble, went public with an op-ed in the Financial Times (1st September 2014, co-authored with Karl Lamers), presenting a proposal for a Eurozone Parliamentary chamber that would legitimise, and stand behind, a new office of Euro ‘Czar’ with the capacity to veto member-states’ budgets.
In Whither Europe? The Modest Camp vs the Federalist Austerians James Galbraith and I attempted to chart the evolution of various plans to save the Eurozone. In that survey, we juxtaposed a Modest Camp (that includes our own Modest Proposal), whose philosophy is to promote a minimalist agenda for stabilising the Eurozone and ending its socio-economic crisis before Europe’s future can be discussed cooly and properly, against federalist plans (like those of the Piketty and Glienecker Groups) for political union. Our argument (also augmented here) was that the prescribed federalist moves are, by definition, austerian in logic and, thus, ultimately detrimental to Europe’s integrity and even its… soul. Most recently, Frances Coppola and Simon Wren-Lewis, at the behest of Open Democracy (who published our original paper), responded to our musings. Here are their responses:
Jean Claude Juncker had a good idea but looked in the wrong place for funding it. His good idea was to promote a sizeable investment program (€300 billion) that would help Europe end years of crisis, stem deflation and return the continent to growth. Unfortunately, Mr Juncker thought it a good idea to tap the European Stability Mechanism’s unused borrowing capacity in order to fund his investment program. Soon after putting forward this idea, Germany smacked it down. Why was Mr Juncker badly mistaken to suggest the ESM as a funding source? And what should Mr Juncker have proposed instead? Read on…
As Europe seems resigned to the perpetuation of the Euro Crisis, with its authorities in a state of permanent paralysis (with only the ECB trying, and failing, to stem the debt-deflationary vortex), it seems more pertinent than ever to keep the debate on the Modest Proposal going. If only as a reminder to the powers-that-be that there are immediately implementable policies whose implementation would stem the crisis without breaking any of the existing rules, without having the core countries pay one euro for the debts and losses of the periphery, and without any further diminution of national sovereignty. Can all this be possible? Is the Modest Proposal genuinely capable of delivering such much-needed relief at no cost and without bypassing any of the existing rules? We, the authors of the Modest Proposal, think so. Of course, sceptics have every right to pose questions and challenge our hypotheses. In this post, one such sceptic asks pertinent, probing questions about each of the Modest Proposal’s four policies. Which we do our best to answer. [(*)For earlier Q&As on the Modest Proposal, raising many of the same issues, click here and here.) Read on… Continue reading
ON THE MODEST PROPOSAL’S POLITICAL, CONSTITUTIONAL AND ETHICAL DIMENSIONS
This article is a sequel to an earlier piece entitled ‘Why is Europe not coming together in response to the Euro Crisis?’ and is best read in conjunction with this article (co-authored with James K. Galbraith) that compares our Modest Proposal for Resolving the Euro Crisis with alternative proposals for defeating the Euro Crisis. In what follows below , I argue that, as things stand, ‘political union’, ‘more Europe’, calls for a ‘Eurozone economic government’, or for a ‘Euro Chamber’ within the European Parliament, are not preludes to a democratic federal Europe. Instead, they are steps towards a postmodern European feudalism that is, in fact, the very antithesis of a democratic federation. The article concludes with an analysis of why our Modest Proposal offers Europe a rare chance to prevent the creation of a European iron cage in which what is left of our democracies must suffocate. Unlike all moves that are currently heralded as ‘baby-steps’ towards federalism, the Modest Proposal’s emphasis on ‘Europeanised Decentralisation’ is perhaps Europe’s best shot at a future consistent with the basic principles of a constitutional democracy.
FRIENDS OF EUROPE, an official publication of the EU, kindly commissioned me to write a short article on the State of the Union after the European Parliament elections, in the run up to the magazine’s 9th October conference of the same theme. You can read the article on the FoE’s website or just continue below
Faced with deflationary forces in its core, and a lasting depression in the periphery, the Eurozone requires a major investment drive. One of the Modest Proposal’s policy recommendations is that the European Investment Bank (along with the European Investment Fund) embarks upon a massive investment drive (up to 8% of Gross Eurozone Product) without any national co-funding. These investments could be funded through 100% issues of EIB-EIF bonds, with the European Central Bank purchasing, in secondary markets, sufficient quantities of these bonds to ensure that their yields stay well below 1.5%, thus making a European New Deal not only possible but also self-financing – and off the books of national budgets. Continue reading
In this Q&A with a Greek journalist, on the occasion of the launch of the Greek translation of the Modest Proposal, James K. Galbraith argues that Italy and Greece can play an important role in changing the terms of the European ‘conversation’, so that rational, minimalist solutions like the Modest Proposal can have a chance of saving the Eurozone. He also explains that the Greek implosion was always a political choice by Berlin and Frankfurt; and that if the troika squeeze is lessened, it is due to SYRIZA’s success – not to the success of the austerity program. Finally, he answers an important question on the Chinese government’s investment strategies in Greece and in the rest of the Eurozone.