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A dose of inflation would help the eurozone medicine go down
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Everyone accepts that persistently high inflation can damage economic growth and arbitrarily punish some groups in society while benefiting others. But in Europe at least, the risks of excessively low inflation are often ignored. In the face of chron...
Commission should move to structural reform of the ETS
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The EU regularly describes the ETS as the centrepiece of its climate policy. This centrepiece is currently a failure. Climate change is already killing hundreds of thousands of people each year, and costing the global economy hundreds of billions of...
NATO and the costs of star wars
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Over the last decade, the US has spent tens of billions of dollars constructing a shield to stop nuclear missiles from North Korea or Iran reaching its soil. So far, the shield does not work. Fortunately for the Americans, neither Pyongyang nor Tehra...
European austerity: Turn or TINA?
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Will European governments reverse the austerity course that has done so much to damage their already enfeebled economies? With the revelation of mathematical errors in the work of two Harvard economists, Carmen Reinhart and Ken Rogoff – who had...
Is the euro crisis responsible for populism?
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Populists and extremists are on the rise across Europe. Even Germany is now seeing the rise of a eurosceptic party. The euro crisis is the reason for growing political risk in the eurozone. Or is it? True, populist parties are more important in sever...
Out of range, out of mind: Is there a role for Europe in the Korean crisis?
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From London or Brussels, the situation on the Korean Peninsula can appear – in the words of former British Prime Minister Neville Chamberlain – a "quarrel in a far-away country between people of whom we know nothing". On one side, a mad d...
The EU's Rubik's cube: Who will lead after 2014?
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Next year, EU leaders will decide who will succeed Herman Van Rompuy, José Manuel Barroso and Catherine Ashton as, respectively, the next president of the European Council, president of the European Commission and high representative for forei...
Germany’s plans for treaty change – and what they mean for Britain
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Last year, German leaders talked of the need to strengthen the eurozone through changing the EU’s treaties. One person who listened carefully was David Cameron. The British prime minister may have assumed that what Germany wants in the EU these...
Could Cyprus reignite the eurozone crisis?
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Each of the crisis-hit eurozone countries shares some responsibility for its predicament. Italy used membership of the single currency as an excuse to go slow on pushing through much-needed structural reforms of its economy. The Irish and Spanish wer...
Two cheers for Beppe Grillo
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The Achilles heel of the euro has always been democracy. Although the euro is unlikely to break up, that risk cannot be entirely excluded: one day, voters may choose a government committed to policies that are incompatible with the conditions set by...
In Mali, now comes the hard part
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Last month, French military forces freed the main population centres in northern Mali from jihadist control. Progress on the military front has created new political momentum as Malians plan to go to the ballot box this summer, ending 15 months of in...
Freeing the transatlantic economy – prospects, benefits and pitfalls
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In mid-February, the EU and the US agreed to launch negotiations aimed at sealing a Transatlantic Trade and Investment Partnership (TTIP). Like Yogi Berra, cynics might be tempted to dismiss the project as déjà-vu all over again. After...
Why British prosperity is hobbled by a rigged land market
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The British have the least living space per head, the most expensive office rents and the most congested infrastructure of any EU-15 country. Thanks to a rapidly growing population – the result of a healthy birth-rate and immigration &nda...
Time to bite the bullet on European defence
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Europe’s military spending is in free fall. As highlighted during a seminar organised by the CER in December as part of the FR-UK Defence Forum, the EU countries combined have reduced defence spending from €200 to €170 billion since t...
Eurozone slump derails Britain's economic strategy
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The British government's attempt to rebalance the UK economy has failed. In 2012, the deficit on the country's current account (the broadest measure of foreign trade) was larger than in any year since 1990. Britain's problem is not its trade performa...
Has the ECB done enough to save the euro?
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On July 26th 2012, European Central Bank President Mario Draghi told a London conference of bankers: “the ECB is ready to do whatever it takes to save the euro”. He paused, somewhat theatrically. “And believe me, it will be enough.&...
Cameron’s optimistic, risky and ambiguous strategy
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David Cameron has promised that if the Conservatives win the next election, they will renegotiate the terms of Britain’s EU membership and then hold an in-out referendum before the end of 2017. In his long-delayed speech on Britain and the EU,...
Europe places too much faith in supply-side policies
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Supply-side thinking now dominates European economic policy. Most governments, and the European Commission, argue that attempts to boost demand would be counterproductive, achieving little but a delay to the necessary consolidation of public finances...
How can the EU influence China?
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For the EU, China matters more than any other emerging power. Two-way trade in goods between them amounted to €429 billion in 2011. Diplomatically, the Europeans and the Chinese meet in scores of summits, dialogues and working groups. Yet the EU an...
Sound public finances require more than low budget deficits
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The European Commission and the European Central Bank like to compare the eurozone's budget deficit and overall level of public indebtedness favourably with the US and the UK. Senior policy-makers from both institutions cite the allegedly superior fi...
