Having been involved in some of the policy-making episodes quoted in the piece I can only agree on each and every point it makes.
Let me add that would not have been any chance that the hugely wasteful Superbonus scheme in Italy be implemented if the EU fiscal rules had not been suspended because of Covid. Even ‘stupid’ rules such as the 3 percent deficit limit are needed to prevent even more stupid policies.
The Draghi report does contain a strongly critical message on EU regulation, especially in the digital domain, and on the need to overcome market fragmentation including through radical means such as the 28th regime for innovative companies. It also has broadly the right message on competition policy as a spur not impediment to EU growth (apart from a misguided analysis on telecom consolidation). For some strange reason however Draghi himself is emphasising the macro recommendations on more borrowing, which have already attracted most of the public attention. This plays in the hands of those blaming all the economic ills affecting Europe on ‘austerity’.
Interesting article. Just a point to think about coming from Greece. Resilience also comes from the people and not only the economic/fiscal policies. Greeks have been leaving in extremely turbulent time for around 10 years of economic crisis. This has taken a toll on everybody but has taught the people to take nothing for granted and build resilience and become more susceptible to change
Good analysis in general, but one key point is missing: countries with consistently large BoP surpluses. Germany's 7% BoP surplus (a country with positive NIIP) is effectively suppressing domestic demand. Europe has the money, but invests it in US Treasuries.
Having been involved in some of the policy-making episodes quoted in the piece I can only agree on each and every point it makes.
Let me add that would not have been any chance that the hugely wasteful Superbonus scheme in Italy be implemented if the EU fiscal rules had not been suspended because of Covid. Even ‘stupid’ rules such as the 3 percent deficit limit are needed to prevent even more stupid policies.
The Draghi report does contain a strongly critical message on EU regulation, especially in the digital domain, and on the need to overcome market fragmentation including through radical means such as the 28th regime for innovative companies. It also has broadly the right message on competition policy as a spur not impediment to EU growth (apart from a misguided analysis on telecom consolidation). For some strange reason however Draghi himself is emphasising the macro recommendations on more borrowing, which have already attracted most of the public attention. This plays in the hands of those blaming all the economic ills affecting Europe on ‘austerity’.
Thanks!
Interesting article. Just a point to think about coming from Greece. Resilience also comes from the people and not only the economic/fiscal policies. Greeks have been leaving in extremely turbulent time for around 10 years of economic crisis. This has taken a toll on everybody but has taught the people to take nothing for granted and build resilience and become more susceptible to change
Great point. The Greeks have gone through a huge amount, and have proven their strength and their resilience. It is not just economic policy indeed.
Good analysis in general, but one key point is missing: countries with consistently large BoP surpluses. Germany's 7% BoP surplus (a country with positive NIIP) is effectively suppressing domestic demand. Europe has the money, but invests it in US Treasuries.