Conjoncture
    Conjoncture - 06 February 2018
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    Numerous conditions have come together in 2018 to make it the year for jumpstarting European construction. Key political players have high ambitions, as a buoyant economic environment allows them to look further ahead than usual. This article addresses a series of issues to make it easier to understand the debates and the upcoming decisions.
    Capital Markets Union (CMU) aims to draw the best from the various financing channels, by expanding opportunities for saving and the availability of long-term financing, and to improve financial integration in the European Union. To this end, the European Commission has drawn up a lengthy but coherent list of actions, some of which have already been completed. Although the introduction of a more favourable legislative framework is essential, Capital Markets Union is a long-term process, whose success will depend above all on the behaviour of economic agents.
    Conjoncture - 30 November 2017
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    In May 2017, Donald Trump triggered a renegotiation of the North American Free Trade Agreement (NAFTA). Some proposals, 23 years after NAFTA came into force, aiming to introduce a chapter on the digital economy and strengthen the agreement’s current arrangements, have been generally welcomed. Others, such as a tightening of rules of origin and changes to trade remedies, have prompted concern.
    Conjoncture - 19 September 2017
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    Since the second half of the 1980s, France’s unemployment rate has never fallen below 8% for very long. This observation, more than the surge in unemployment during the crisis, serves as the starting point for the overhaul of France’s labour code. Labour market reform should have a positive impact in the medium term. In the short term, however, the question is harder to answer: economic literature indicates that the starting point matters most when evaluating the short-term impact of structural reforms.
    This article analyses the recent economic performances of the eastern countries of the European Union, specifically focusing on the so called Visegrad-6 group, comprising Poland, Hungary, the Czech Republic, Slovakia, Bulgaria and Romania. Long considered as the EU’s “junior partners”, their very strong macroeconomic performances in recent years suggest that they will soon catch up with their western EU counterparts. Are we about to witness the culmination of more than 10 years of convergence? Only if we ignore the structural challenges these economies are still facing.

On the Same Theme

Brexit, phase 2 2/14/2018
The European Council found that Brexit talks between the UK and the European Commission had advanced sufficiently to launch a new phase of negotiations. The definitive withdrawal agreement must include the terms for the transition period as well as a policy statement defining the framework for the future trade relationship between the UK and the EU. The EU wants a framework similar to its trade agreement with Canada, which reflects the UK’s desire to leave the Single Market. The UK wants a trade agreement that includes the services sector.
France-Germany: The roots of equity capital increases for NFCs (excluding valuation effects) 2/14/2018
Between 2012 and 2017, French non-financial companies (NFCs) generated 35% less value added than German NFCs, but net annual issues of equities and other share capital (i.e. after repurchases) were nearly five times higher on average (EUR 80 bn vs. EUR 17 bn). This shows that most companies have had no trouble raising funds in France. Moreover, this ranking can be seen regardless of the instrument under consideration (listed or unlisted shares, other share capital). In contrast, reinvested earnings (indicated here as gross savings) were almost twice as high in Germany (EUR 386 bn vs EUR 202 bn, or a spread of 190%), resulting in a much bigger annual increase in equity capital than in France (42% higher at EUR 403 bn a year vs EUR 283 bn). At a time when apparent earnings distribution rates are comparable (50% in France, 46% in Germany), the smaller increase in the equity capital of French companies can be attributed to their lower financial returns.
The challenges of Capital Markets Union 2/6/2018
Capital Markets Union (CMU) aims to draw the best from the various financing channels, by expanding opportunities for saving and the availability of long-term financing, and to improve financial integration in the European Union. To this end, the European Commission has drawn up a lengthy but coherent list of actions, some of which have already been completed. Although the introduction of a more favourable legislative framework is essential, Capital Markets Union is a long-term process, whose success will depend above all on the behaviour of economic agents.
The eastern members of the EU: catching up fast 9/19/2017
This article analyses the recent economic performances of the eastern countries of the European Union, specifically focusing on the so called Visegrad-6 group, comprising Poland, Hungary, the Czech Republic, Slovakia, Bulgaria and Romania. Long considered as the EU’s “junior partners”, their very strong macroeconomic performances in recent years suggest that they will soon catch up with their western EU counterparts. Are we about to witness the culmination of more than 10 years of convergence? Only if we ignore the structural challenges these economies are still facing.
European banks have reduced their debt securities outstanding maturing within 3 years 9/13/2017
According to ECB calculations, European banks have significantly reduced their debt securities outstanding due within 3 years over the past decade. While their share still stood at 50% of total debt securities outstanding in 2008, it accounted for 40% in august 2017. The major factors behind this change are the new regulatory context and the interest rate environment. The Liquidity Coverage Ratio (60%), which came into force in October 2015 and will be gradually increased until January 2018(100%), pushes banks to lower their net cash outflows by lengthening the residual maturity of their debt. Moreover, unsecured debt securities with a residual maturity over 1 year are eligible liabilities for banks loss absorption capacity (MREL for all EU banks since 2016 and TLAC for GSIBs – which will be introduced by an amendment to the MREL in the EU- from 2019). Banks also take advantage of the weakness of interest rates amplified by the ECB unconventional measures.
Eastern Europe: catching up rapidly 9/8/2017
What is behind the spectacular acceleration in Eastern Europe? What are the risks and challenges for tomorrow?
A new momentum for the European Union 6/2/2017
Europe’s momentum is picking up, not only in terms of economic performance but also as far as policy and vision are concerned, witness the agreement this week on simple and transparent securitisation and the publication of a reflection paper on the deepening of the economic and monetary union.
Deepening EMU: the necessity is proportional to the challenge 6/2/2017
European Commission releases reflection paper on deepening EMU. The necessity of the task seems proportional to the challenge of achieving it.
The European roadmap towards decarbonisation 5/17/2017
Globally, production should become less energy and carbon intensive in order to reduce greenhouse gas emissions and eradicate energy poverty worldwide. According to the EU Reference Scenario, the increase in prices for carbon emission allowances is crucial for reducing carbon intensity in the power and manufacturing sectors. More measures will be necessary to reach the European climate goals. In particular, more could be done in the transport sector, which is clearly lagging behind. The European environmental policy could be an example for the rest of the world. However, to convince the emerging countries, carbon emissions should be faster reduced.
EU: In-work poverty and unemployment 4/12/2017
Since the financial crisis, the risk of in-work poverty – i.e. having a job but receiving less than 60% of the median disposable income after social transfers – has risen in Europe. In 2015, about 9% of German workers were in this situation compared with 6% in 2009. Labour market reforms have succeeded in reducing the unemployment rate, but at the expense of an expansion of low paid jobs. In Germany, about 22% of employees earn less than 66% of median gross hourly earnings compared with only 8.8% in France (2014 data). In France, the in-work poverty rate amounted 7.5% in 2015, a 1-point increase since the crisis, but the unemployment rate rose to more than 10% from 8% in 2007. Is the trade-off between unemployment and in-work poverty ineluctable? Not really. Since 2011, Denmark has succeeded in lowering the unemployment rate in combination with a decline in the risk of in-work poverty.  

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