3. Delgado-Vega, Álvaro, and @bartonelee2.bsky.social. 2024. ‘When Growth Leads to Zero-Sum Conflict’. t.co/MjBZ9BUCI3

1/This is Transatlantic leadership! In historic move, German Chancellor Merz calls out US: “democracy is under pressure, freedom of expression is being questioned, and the independence of the judiciary is being repressed“. www.reuters.com/technology/g...

A new IMF study shows trade surpluses tend to raise incomes in surplus countries and lower them in deficit countries. doi.org/10.5089/9798...

🇫🇷's debt/GDP ratio is not "soaring." It is <lower> than in 2020, & it's borrowing costs are lower than in 2023. I know that The Narrative™️ cannot fail & everyone has their own political preferences over arbitrary debt levels (bsky.app/profile/mcop...), but don't print lies in the newspapers, etc.

For a (healthy?) dose of Euro-pessism, here is an interesting look by @codendahl.bsky.social on the economic policies of the far/hard right and what their increasing access to power might mean for Europe:

The EU's strategic foresight report 2025 is out and it rings the bell for a "change in the global order" "We're witnessing the erosion of the rules-based international order & fracturing of the global landscape... a return to the previous status quo seems increasingly unlikely"

Not sure that some in Germany understood that more issuance of their own would imply more market discipline on France. Not sure some in France fully realised that Germany's big fiscal experiment also has sharp downsides for them.

1/2 FT: "Developing countries are moving out of dollar debts and turning to currencies with rock bottom interest rates such as the Chinese renminbi and Swiss franc." www.ft.com/content/36f8...

German households hold €3.4 trillion in cash and low-interest bank deposits. www.ft.com/content/f1cb...

Does fiscal policy deliver more growth and convergence when it is financed and coordinated at the EU level, as opposed to being paid for and run nationally? www.sciencedirect.com/science/arti...

Germany inscribed austerity in its constitution. The “debt brake” is so rigid that The Economist has called it an instrument of “self harm”. Reform is overdue. I’m honored to be appointed by the Finance Ministry to serve on the expert commission in charge of fiscal rules.

Europe negotiated the EU-US deal from weakness—and it shows. The 15% tariff was already the de facto rate for the past few months (10% Liberation Day tariffs + ~5% MFN). It beats 25% on key sectors. But locking it in permanently? What was unthinkable a year ago is now the new baseline. 1/

I think European leaders - both national and in the EU - are underestimating what it will do to their publics to be humilated by Trump. Like the NATO summit and Rutte's 'Daddy' strategy, mabye the outcome could have been worse. But losing pride and being humilated is also a price that is paid.

The trade “deal” with the US is a missed opportunity for the EU to leverage the full extent of the regulatory and institutional capacity it has built in the past few years to exert economic influence on the world stage.

Ha-Joon Chang argues we need a more nuanced approach and to understand the economy not from a purely economic point of view, but also from political, social and psychological perspectives. #econ on.ft.com/4lLyt35 Economics teaching has become the Aeroflot of ideas

Global current account balances widened in 2024, reversing a narrowing trend. Our latest External Sector Report finds that 2/3 of this widening is excessive—driven by macroeconomic imbalances in China, the US, and the euro area. Read the full report a imf.org/en/Publicati...

The Commission proposal for the next long-term EU budget aka MFF just dropped. Its overall volume increases very moderately, but the proposal contains sweeping changes to the way the EU spends money and to budget's priorities. Here is my first quick take:

This is such an important contribution to our thinking about the EU’s future. I highly recommend it. Congrats @manuelamoschella.bsky.social & Luca Quaglia!

Pistorius’s rejection of Eurobonds reprises one of the oldest refrains in the EU fiscal debate - that joint borrowing creates moral hazard whereby risk-sharing weakens incentives to reform. By refusing to share borrowing costs, he is preserving “homework” incentives for national governments.

The letter Donald #Trump sent to Moldovan President, Maia Sandu, announcing 25% blanket #tariffs is full of typos, excessive capitalisation for no reason, stylistic inconsistencies, and awkward phrasing.

1/2 Very good essay by Gillian Tett. At the beginning of every semester I tell my PKU students that they are lucky enough (or unlucky enough) to be studying at a time, like in the 1930 or 1970s, when the world is undergoing a major shift... www.ft.com/content/762c...

Nice idea in principle, but dont fool yourself: All you’ll be doing is to shift the insurance against such events from the public budget to the creditors - who’ll charge you a premium (which will be excessive because of the uncertainty).

Other EU member states absorb only about a quarter of the exports of European firms • Data show how open EU economies are; trade flows represent 55% of EU GDP (vs. 25% of US's a 37% of China's) • Data also highlight how deepening the Single Market could help to support EU firms amid US tariffs

The Commission’s big EU budget proposal lands in two weeks. Now, the Polish government has published its position - and it offer an interesting glimpse into the negotiation drama ahead.

Every day, the EU actively seeks to enhance its global role to survive in the new global disorder. Yet, its (national) leaders face a tension between these pan-European ambitions and national interests, which continue to shape the bloc's political dynamics As highlighted by @fromtga.bsky.social

. @martinsandbu.ft.com argues that we’re entering a new era of financial repression and financial nationalism where governments are increasingly steering capital toward domestic priorities rather than leaving it to market forces. A 🧵 looking back on financial repression: on.ft.com/3TlujSW

Yevheniia Bondarenko, Vivien Lewis, @matthiasrottner.bsky.social, & Yves Schüler introduce a new indicator of geopolitical #risk tailored specifically to the euro area, based entirely on newspaper coverage from local sources. cepr.org/voxeu/column... #EconSky

A paper that should keep central bankers awake at night: "we demonstrate that traditional Taylor rules fail to stabilize inflation in both regimes [of persistent supply shocks]" Nice job @bde.es🇪🇸 ! repositorio.bde.es/handle/12345...

With Germany planning a ~€1 trillion fiscal package, Bund scarcity is gone. As a result, 10yr Bund yields climbed from near zero to around 2.5%, mechanically narrowing spreads with periphery Eurozone countries. on.ft.com/4l3BAm8 Era of Bund scarcity is over, says German debt chief

Striking back hard at MAGA's Miran/Bessent plans, @steffenmurau.bsky.social and I propose a SUERF User's guide for euro internationalisation (based on our recent JEPP article) www.suerf.org/publications...

My operating hypothesis is that this’ll be successful on the margin. Europe will expand trade ties, the ECB (maybe) its repo/swap lines, and a stronger military will buttress alliances - all euro boosts. But the jury’s out on deep domestic reforms, capital market deepening let alone more Eurobonds.

Markets are betting on more fiscal cooperation in Europe, visible in shrinking spreads between peripheral country bonds and German bunds. As the US pulls back from European security, a future with more "eurobonds" seems possible. The euro's int'l potential is rising www.ft.com/content/aed1...

The @ecb.europa.eu released its 2025 International Role of the Euro Report. A big development in 2024 was the sharp rise in international issuance of euro-denominated debt and loans, which surged by over 40% to the level since the global financial crisis. www.ecb.europa.eu/press/other-...

🇷🇴 Romania deficit: Today, the Commission recommended to the Council to adopt a decision that establishes no effective action has been taken by Romania to correct its excessive deficit. This is the first country for which the EDP is being stepped up under the new economic governance framework.

Many across the EU were undoubtedly relieved when the result of the Romanian presidential election was announced two weeks ago. But while Bucharest offered reassurance, Warsaw may now be heading in the opposite direction. #Poland

1/ The EU wants to bundle R&I funding into a new Competitiveness Fund (ECF). The idea: less fragmentation, more strategic focus. The ambition is right. But whether the ECF delivers will depend entirely on how it's designed. Here are four principles that should guide it. bst-europe.eu?p=38401&prev...

#Romania election results thread: Dan (Liberal/ Independent) won the Romanian presidential election with a big lead domestically. Even though the diaspora vote had favoured Simion, it wasn’t sufficient to swing the results.

💥Viktor Orbán made one of his biggest mistakes by praising anti-Hungarian far-right candidate George Simion. 🇭🇺 In Hungary, he hurt his “nationalist” credibility, angering many right-wing voters. 🇷🇴 In Romania, the Orbán-loyal Hungarian diaspora voted most heavily against Simion. 👎And Simion lost.

I didn’t want to jump the gun, but it’s now safe to say #Romania dodged a massive bullet. Today, Romanians chose Europe, chose freedom, and change for the better. In a moment filled with anger, fear, and fatigue, we didn’t let our darker nature define us. 🇷🇴 🇪🇺

Trade wars are fuelling appreciation of Asian currencies vs US dollar • US tariffs should normally fuel depreciation of foreign currencies vs US dollar, but opposite is happening • Appreciation of foreign currencies vs US dollar reflects investor concerns re: US unpredictability & greenback's future

The Commission just published the 2025 In-Depth Review as part of our macroeconomic imbalance procedure. In Romania's IDR, I wrote a short analysis on the import content of final demand and industrial output in Annex 2. A thread on the findings: economy-finance.ec.europa.eu/publications...

‼️🤯 Viktor Orbán backs far-right, pro-Kremlin Romanian presidential hopeful George Simion—once a rabid anti-Hungarian nationalist—despite strong opposition from Romania’s ethnic Hungarian community and the UDMR party. Critics say Orbán is (again) serving Russian, not Hungarian interests here.

We’ve just published a new report, based on our annual economics conference. It distils the big policy debates on the European economy post-Draghi, drawing on the brainpower around the table. Some journalist friends convinced me it’s worth sharing — so here’s a thread. 1/x

🇷🇴 elections crisis: The structural drivers of the far-right vote in Romania seem rooted in geographies of discontent, regions where people feel left behind by growth and lack opportunities. Counties that lag behind in economic performance consistently register higher shares of far-right support.

The rise of AUR among Romanians abroad illustrates how nationalism and frustration can mobilise a dispersed community. Demographically, many in the diaspora come from disadvantaged backgrounds. They left a corrupt, stagnant system and now live between two worlds. www.politico.eu/article/roma...

🇷🇴 Election crisis: Romania’s Social Democrats (PSD/ S&D) have withdrawn from the governing coalition after the joint candidate of the Social Democrats, National Liberals and the Hungarian minority failed to advance to the second round of the presidential elections, sparking a political crisis.

Michel Aglietta died earlier this week. He spent his career thinking about economic growth and monetary theory over the long run and argued that economies are not just markets, but networks of rules, institutions, and social relations that shape how production, consumption, and accumulation happen.

Join us on May 1 @uwmadison.bsky.social for our 2025 Jean Monnet 🇪🇺 Center Symposium, "Europe Amidst Uncertainty." We have <a lot> to discuss & a 💯 lineup of local scholars & Europe-based experts to discuss democracy, geopolitics, & the global economy. Program/info: europe.wisc.edu/event/keynot...

Folks, @smerler.bsky.social's idea is excellent. But the euro is not replacing the dollar anytime soon. The scope & scale of things the 🇪🇺 would need to do to make that happen is enormous & is going to require wholesale change in 🇩🇪/🇪🇺 that isn't remotely close to happening: bsky.app/profile/mcop...