Föhrenbergkreis Finanzwirtschaft

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Posts Tagged ‘fiscal union’

A Fiscal Union for the Eurozone

Posted by hkarner - 28. September 2017

Date: 27-09-2017
Source: Foreign Affairs By Pierpaolo Barbieri and Shahin Vallée

The Only Way to Save the EU

The German election is finally behind us. In spite of headlines about the rise of the extreme right, Chancellor Angela Merkel is headed for yet another term in power with pro-European partners. This means there is finally a window to discuss eurozone reform in earnest. But what is the goal? It is increasingly popular to argue that the creation of a budget for the eurozone is, in the words of the Financial Times’ Martin Sandbu, mere “federalist utopia.” He and Bruegel’s Andre Sapir, to name a few, argue that Europe should pursue a more pragmatic solution. Their suggestion is to “complete the banking union” and transform the existing European Stability Mechanism (ESM) into a European Monetary Fund (EMF). Past and likely future German Finance Minister Wolfgang Schäuble seems to agree with them.

Such an EMF would exist to provide conditional crisis lending to sovereign nations in trouble, as the ESM does today. It would thus perpetuate our current system of asymmetrical adjustments decreed to bailout recipients who face no parliamentary accountability or scrutiny. It features men in dark suits who arrive with foreign reform dicta. It would also enshrine the deflationary bias of the current framework, in turn deepening the corrosive political dynamics of austerity. Den Rest des Beitrags lesen »

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Can Macron Pull it Off?

Posted by hkarner - 10. Mai 2017

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KRÖNUNGSTHEORIEN AM PRÜFSTAND

Posted by hkarner - 23. Februar 2017

Wilfried Stadler, FURCHE-Kolumne 209 23. Februar 2017Stadler CC

Es war keine unbeschwerte Geburtstagsfeier, zu der Jens Weidmann, Chef der Deutschen Bundesbank, anlässlich des 25. Jubiläums der Unterzeichnung des im Februar 1992 besiegelten Vertrages von Maastricht eingeladen hatte. Befürworter und Gegner der europäischen Währungsunion trafen zusammen, um Zwischenbilanz zu ziehen: Was hat funktioniert, welche der seinerzeitigen Warnungen waren berechtigt, wo soll die Reise hingehen?

Die Grundthese der Skeptiker von damals: erst wenn sich Volkswirtschaften in Bezug auf ihre Wettbewerbsfähigkeit aneinander weitgehend angeglichen haben, kann eine Gemeinschaftswährung als krönender Abschluss gegenseitiger Annäherung funktionieren. Deren frühzeitige Einführung würde hingegen zu noch größeren Ungleichgewichten und letztlich auch politischen Krisen führen, da der Verzicht auf Wechselkursschwankungen die außenwirtschaftliche Anpassung erschwert.
Die Anhänger dieser „Krönungstheorie“ unterlagen jedoch einer deutlichen Mehrheit von Ökonomen und Europapolitikern, die „Krönung“ ganz anders – nämlich politisch – definierten: sie sahen die Einführung des Euro als Voraussetzung einer schrittweisen realwirtschaftlichen und budgetpolitischen Annäherung der Teilnehmerstaaten, die eines Tages in einen europäischen Bundesstaat und damit auch eine „Fiskalunion“ münden sollte. Um bis dahin kein unkoordiniertes Nebeneinander zu riskieren, führte man die als „Maastricht-Regeln“ bekannten Grenzwerte für die Staatsverschuldung ein. Den Rest des Beitrags lesen »

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Avoiding another Eurozone Crisis while avoiding the Five Presidents‘ Report: Part II

Posted by hkarner - 10. Juni 2016

Mike Wickens 08 June 2016, voxeu

Professor of Economics, University of York and Cardiff Business School; CEPR Research Fellow; CESifo Fellow

In the first column of this two-part series, I argued that a significant cause of the Eurozone Crisis was its one-size-fits all common monetary policy. In this second column I examine The Five Presidents’ Report, Completing Europe’s Economic and Monetary Union (European Commission 2015), which sets out new proposals for Eurozone fiscal and financial policy that are designed to supplement the common monetary policy and deal with its limitations. I also argue that a major contributory factor to the Eurozone Crisis was a failure of financial markets to price risk correctly and that the ECB, through its recent unconventional monetary policies, continues to undermine financial market discipline. Finally, I ask whether there might be an alternative solution that is market-based and does not need the additional control to be exercised by the Commission that is envisaged in the Report. Den Rest des Beitrags lesen »

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Schäuble bremst Frankreichs Drängen auf politische Union in Europa

Posted by hkarner - 27. Juli 2015

Deutsche Wirtschafts Nachrichten  | 

Wolfgang Schäuble kann den Wünschen Frankreichs und Italiens auf eine schnelle Umverteilung der Steuermittel in der Euro-Zone wenig abgewinnen: Geschickt hat er zu diesem Zwecke die Idee einer Euro-Steuer in Umlauf gebracht– wohl wissend, dass eine Finanzierung der gemeinsamen Währung über neue Steuern aktuell weder in Deutschland noch in einem anderen Euro-Staat durchsetzbar ist.

Schäuble Sapin CCZiemlich unterschiedliche Vorstellungen von der neuen EU: Bundesfinanzminister Wolfgang Schäuble und sei französischer Kollege Michel Sapin.

Bundesfinanzminister Wolfgang Schäuble hat am Wochenende mit der Idee einer „Euro-Steuer“ für alle Euro-Länder für eine kleine Diskussion in einigen Medien gesorgt. Der Spiegel hatte berichtet Schäuble sei nach bereit, langfristig deutsche Steuereinnahmen einen eigenständigen Etat der Eurozone abzutreten. Damit könnte ein möglicher neuer Finanztopf für einen künftigen europäischen Finanzminister gespeist werden. Möglich sei auch, dass der Euro-Finanzminister das Recht bekomme, einen eigenen Zuschlag auf Steuern zu erheben, berichtete das Magazin.

Im Bundesfinanzministerium sagte dazu der dpa: «Die langfristige Schaffung einer eigenen Fiskalkapazität für die Eurozone ist ein Vorschlag aus dem Fünf-Präsidenten-Bericht zur Weiterentwicklung der EU.» Die Diskussion darüber beginne erst. Einzelne Elemente müssten im Gesamtzusammenhang gesehen werden und setzten eine Vertragsänderung voraus: «Die Rede von einer Euro-Steuer führt in diesem Zusammenhang völlig in die Irre.» Den Rest des Beitrags lesen »

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Fiscal Arrangements in Federations: Four Lessons for Europe

Posted by hkarner - 27. Februar 2015

Posted on by iMFdirect

Martine GuerguilBy Martine Guerguil 

Does the European Union need closer fiscal integration, and in particular a stronger fiscal center, to become more resilient to economic shocks? A new IMF book, Designing a European Fiscal Union: Lessons from the Experience of Fiscal Federations, published by Routledge, examines the experience of 13 federal states to help inform the debate on this issue. It analyzes in detail their practices in devolving responsibilities from the subnational to the central level, compares them to those of the European Union, and draws lessons for a possible future fiscal union in Europe.

The book sets out to answer three sets of questions: (1) What is the role of centralized fiscal policies in federations, and hence the size, features, and functions of the central budget? (2) What institutional arrangements are used to coordinate fiscal policy between the federal and subnational levels? (3) What are the links between federal and subnational debt, and how have subnational financing crises been handled, when they occurred?

Federations have addressed these issues in many different ways, but four features stand out when comparing their practices to those of the European Union. Den Rest des Beitrags lesen »

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HSBC-Chefvolkswirt King: „Geldpolitik wird zum Schmerzmittel mit Suchtfaktor“

Posted by hkarner - 30. Juli 2013

von Saskia Littmann, Handelsblatt.com

25.07.2013, 10:21 Uhr

Stephen King, Chefvolkswirt der britischen Großbank HSBC, sieht schwarz. In Europa erwartet er King CCwirtschaftlichen Stillstand. Er warnt vor überzogenen Erwartungen und rechnet mit Blasen an den Finanzmärkten.

King money runs outHerr King, in Ihrem neuen Buch „When the money runs out“ stellen Sie die gewagte These auf, dass die Volkswirtschaften Europas und auch die Wirtschaft der USA in den nächsten Jahren kaum noch wachsen werden. Warum so pessimistisch?
King: Der Westen erlebte seine goldenen Jahre von den Sechzigern bis Ende des letzten Jahrtausends. Vor allem die Globalisierung und der damit verbundene zunehmende Welthandel sorgten für Wachstum. Nach dem Ende des Kalten Krieges kam dann der Handel mit dem Osten hinzu, wieder profitierten Exportnationen wie Deutschland. Zwar werden die weltweiten Handelsströme weiter wachsen, Europa und auch die USA werden aber nicht die größten Profiteure sein.

Warum nicht? Schließlich gehen Sie davon aus, dass aufstrebende Märkte wie Asien oder Südamerika in Zukunft weiter stark wachsen werden. Davon müsste doch auch der Westen profitieren?

Nein, diesmal werden aus meiner Sicht andere die größten Stücke vom Kuchen bekommen. Der zusätzliche Handel wird sich hauptsächlich zwischen Asien, dem mittleren Osten, vielen afrikanischen Ländern und Lateinamerika abspielen.

Aber warum sollte eine exportorientierte Volkswirtschaft wie die deutsche nicht von der wachsenden Wirtschaftskraft der Schwellenländer profitieren?

Einerseits hat Deutschland bereits vom Aufschwung der Schwellenländer profitiert, insbesondere durch das Wirtschaftswachstum in China sind die Exporte deutlich gestiegen. Andererseits passen unsere Produkte nicht zu den Bedürfnissen einer neu entstehenden Käuferschicht. In Ländern wie Indien oder Peru sind vermutlich gerade zu Beginn des Wachstums weniger die deutschen Oberklasse-Luxuslimousinen gefragt, sondern einfache und vor allem günstige Autos. Die werden dann im Land selber produziert oder eher aus China importiert als aus Deutschland. Den Rest des Beitrags lesen »

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The Things That Draghi Didn’t Say in His Milan Speech

Posted by hkarner - 18. November 2012

Author: Paolo Manasse · November 16th, 2012 · RGE EconoMonitor

On Thursday, November 15, ECB head Mario Draghi gave an interesting speech in Milan, at the Bocconi University’s ceremony for the new academic year. Interesting both for what he said and for what he didn’t say. The narrative of the crisis was more or less as follows.

In the past few years, markets underestimated the consequences of the irresponsible economic policies (fiscal policies in Greece, Italy, Spain and Ireland credit) and lack of structural reforms (Greece, Portugal, Italy) in many Eurozone countries, but now the chickens have come home to roost and markets have freaked out: interest rates reflect the expectation that the peripheral countries will leave the Euro. This has fragmented the inter-bank market in Europe and prevented the ECB’s low interest rates policy to be transmitted to households and businesses in the peripheral countries. The ensuing credit crunch in these countries has triggered a vicious circle of reduced consumption, investment, GDP, tax revenue, higher deficits and further increases in interest rates. This spiral occurred, according to Draghi, despite the budgetary consolidation and structural reforms that were implemented in many countries. Den Rest des Beitrags lesen »

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Don’t expect too much from EZ fiscal union – and complete the unfinished integration of European capital markets!

Posted by hkarner - 13. November 2012

Professor of International Trade and Finance at the Department of Economics, University of Zurich

Mathias Hoffmann, 9 November 2012

How do members of existing monetary unions share risk? Drawing on a decade of research, this column argues that fiscal transfers in fact make a limited contribution to economic coherence. In the context of Europe’s current crisis, the evidence suggests that unfinished capital market integration must be completed if we wish to see adequate and effective risk sharing.

The sovereign debt crisis apparently suggests that Eurozone economies should now move substantially closer towards fiscal union. Current policy discussions revolve much more around how such a fiscal union should be designed than whether fiscal union can solve Europe’s underlying problems of economic coherence. What can we expect from a fiscal union? Aren’t private capital markets better suited to economic coherence? Even within well-established monetary unions, such as the US, it is clear that fiscal transfers make a limited contribution to economic coherence compared to private capital markets. Europe needs better capital market integration.

The limits of fiscal transfers

Fiscal transfers help countries maintain their standard of living in regional recessions; the fallout from shocks, such as those which have recently hit Greece and Spain, could be cushioned if such countries receive transfers from other countries that are doing better. The need for such ‘fiscal smoothing’ mechanisms was, from the very outset, at the heart of the debate about the creation of a monetary union in Europe (cf. literature surveyed in Commission of the European Communities 1990). Early evidence suggested that fiscal smoothing is the main mechanism alleviating economic asymmetries in the US (cf. Sala-i-Martin and Sachs 1992; von Hagen 1992). Some academics have also drawn attention to the potential for additional smoothing that could come from the integration of private capital markets (cf.Atkeson and Bayoumi 1993). But this early literature could not provide a conclusive, quantitative answer to the question of what the relative roles of private capital markets and fiscal smoothing are likely to be in a monetary union. Yet, this question is of paramount importance for understanding the future of the Economic and Monetary Union (EMU). The current debate largely overlooks the empirical fact that the role of fiscal transfers is dwarfed by the role of capital markets in established monetary unions such as the US. Den Rest des Beitrags lesen »

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The Evolving Euro

Posted by hkarner - 13. September 2012

Authors: Andris Strazds & Thomas Grennes · September 12th, 2012 , RGE EconoMonitor

Andris Strazds is a senior economist at Nordea Bank and a part-time faculty member at the Stockholm School of Economics in Riga, Latvia. More ›

In a previous post we argued that the current fiscal relationships in the euro zone are not sustainable as the members have moved away from the „no bailout” system by implicitly accepting collective liability for a part of the debts while strict conditionality has not always followed. We also claimed that there are only two ways to move to a stable fiscal relationship either to 1) move towards a tighter fiscal union with the member states giving up more of their fiscal sovereignty while the EFSF/ESM and the ECB would offer temporary support or 2) to explicitly move back to the „no bailout” system by letting the weakest members default. Finally, we stated that we felt that the move towards a tighter fiscal union was the less risky alternative as defaults might be followed by exits from the EZ and political turmoil and that might ignite a process of disintegration in the EU that would risk running out of control.

Now the EZ has taken several further steps towards a tighter fiscal union. The European Commission has outlined its plan to create a common supervisor for all EZ banks. The German constitutional court has allowed ratification of the European Stability Mechanism and rejected complaints against it as largely unfounded. The European Central Bank last week offered its support to governments that would enter into a macroeconomic adjustment program with the EFSF/ESM and accept strict conditionality with respect to bringing their fiscal houses in order and implementing structural reforms. While the EZ might now be closer to turning the corner, there are several important issues that remain untackled or insufficiently addressed, both with respect to designing Eurozone 2.0 and dealing with the current emergencies.

Fighting the fires of debt overhang and youth unemployment

A key issue in the EZ going forward is how to reignite growth. While the Compact for Growth and Jobs adopted by the European Council on 29 June outlined a number of steps such as continuing structural reforms and raising the lending capacity of the European Investment Bank, there is still insufficient attention to several key issues impacting growth.

One of them is the overhang of public debt. Even if further increase in debt to GDP ratios in the EZ is soon halted, in several problem countries the debt to GDP levels will be above the 77-90% range beyond which the public debt burden has been shown to have significant negative effect on growth (see e.g. Caner et al. and Reinhart and Rogoff). This means that the public debt levels have to be brought down by means of either sizeable privatization of state and municipal assets, which could be a condition in the macroeconomic adjustment program, or by way of debt restructuring, although the latter is exactly what the European leaders have so far been trying to avoid with the sole exception of Greece. However, debt restructuring does not necessarily have to happen on the state level, it can also take place on the municipal level.

The other key area that we believe is insufficiently covered is dealing with youth unemployment. Here among other things it should be possible to learn more from the dual system of vocational training in Germany where apprenticeships in companies are successfully combined with formal vocational school education. Another policy option is temporarily (for example, for up to a year) exempting young people with limited or no previous full-time work experience and their employers from making social security contributions when hiring them, thereby significantly lowering the marginal cost of employing a young person who has just finished school. Den Rest des Beitrags lesen »

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