The Sound of Economics

In this week’s Director’s Cut of ‘The Sound of Economics’ podcast, Bruegel director Guntram Wolff talks with Nicolas Véron, senior fellow at Bruegel, about the implementation of a European Deposit Insurance Scheme (EDIS), one of the three pillars needed for the completion of banking union. Significant progress has been made on European banking supervision and resolution schemes, but the debate on a common framework for deposit insurance has remained stuck since the first consistent proposal in 2012. Member States are currently enjoying their own deposit insurance system, an example of financial fragmentation through the various national differentiations of policy instruments. The Cyprus case highlights the flaws of a national-level system, based only on a presumption of financial assistance between Member States in case of bail-out. The financial crisis has proven this is not sufficient. Referring to his own research, Nicolas Véron, senior fellow at Bruegel, recommends strengthening trust by setting up a fully integrated, country-blind deposit insurance system to break the vicious circle of the linkage between banks and sovereign debt. In this episode of ‘The Sound of Economics’, Nicolas Véron joins Bruegel director Guntram Wolff to debate the implementation and advantages of such a common system, aiming in the long-term at the completion of a harmonised banking union.

Proponents of blockchain see it as the future – but when might it become the present? In this latest episode of ‘The Sound of Economics’ we welcome Julio Faura, global head of innovation at Banco Santander, and Johan Pouwelse, associate professor at Delft University of Technology, to help illuminate the blockchain concept and where it could be taking us. The development and implementation of blockchain networks is meant to give everyone an opportunity to participate in a market that is not controlled by a central body. Questions remain, however, over the practicality of blockchain networks; how to transition from proof-of-concept to real-world usefulness, how to integrate with and provide benefits for the world economy, and where the greatest benefits of such decentralisation might lie. Shining a light on the brave new blockchain world in this latest episode of ‘The Sound of Economics’ is Julio Faura, the global head of innovation at Banco Santander, and Johan Pouwelse, associate professor at Delft University of Technology and found of the Tribler peer-to-peer service. Both Julio Faura and Johan Pouwelse participated in the Bruegel event ‘The implications of blockchain platforms’, video and audio recordings of which can be reviewed on our events page. 

In this week’s Director’s Cut of ‘The Sound of Economics’ podcast, Bruegel director Guntram Wolff hosts a discussion with Bruegel fellows Alicia García-Herrero and André Sapir on where Europe will position itself between the two major trading powers of China and the United States if relations continue to cool. Bruegel director Guntram Wolff begins his regular Director’s Cut of ‘The Sound of Economics’ podcast with a broad assessment of the recent fomentation of global trade tension, joined in conversation by Bruegel fellows Alicia García-Herrero and André Sapir. Amid escalating trade tensions, Europe is still working out where it stands between China and the United States. Reprieved – for now at least – of inclusion in the US tariff on steel and aluminium imports, the EU remains regretful of the prospect of global trade war. China, and Asia more broadly, faces a range of difficulties in the event of a tariff tit-for-tat. Some countries will have to choose where they align themselves; other countries will not have the option to choose. For a more in-depth look at global trade balances, consider Nicolas Moës recent Bruegel blog post data on bilateral trade, services, investment and protectionism between Asia, Europe and the US in recent years. Meanwhile, Francesco Chiacchio has written another blog post identifying which sectors would be most vulnerable to any deterioration in relations between the EU and the US.

Ongoing negotiations over the next multiannual financial framework represent an opportunity for the EU to support its new priorities, such as increased investment in border control and defence. However, new investment necessitates either an expansion in the size of the budget or cuts to other sectors – each a difficult sell to different Member States. Brexit compounds the problem of finding funds for the seven-year framework, which will run from 2021-27. The Common Agricultural Policy (CAP) accounts for a sizeable portion of the current budget, and Bruegel director Guntram Wolff here elaborates on the possibility of freeing up more space in the budget by freezing funding for CAP – either in real or nominal terms – based on a research paper he has co-authored with Bruegel senior fellow Zsolt Darvas. Joining the conversation in this episode of ‘The Sound of Economics’ is Lars Hoelgaard, former deputy director general at the Directorate-General for Agriculture and Rural Development, who explores specific options for reforming the CAP.

In this episode our senior fellow, André Sapir discusses with Uri Dadush, non-resident scholar here at Bruegel about President Trump's announcement to apply a 25% tariff on all steel and a 10% tariff on all aluminium imports into the United States.

What comes next for the euro area? Europe has emerged from crisis, and progress has been made with banking union; but more can be done to reform the EU budget and improve the public perception not only of EU money but of the Union itself. Gideon Rachman, chief foreign affairs correspondent at the Financial Times, and Manfred Weber, chair of the EPP Group in the European Parliament, discuss their thoughts on current state and future direction of the euro area alongside Bruegel director Guntram Wolff.  Guntram Wolff, Gideon Rachman and Manfred Weber enjoyed a lengthier debate on this same topic at the third Bruegel-Financial Times Forum earlier this week.

Bruegel senior fellow André Sapir clarifies the UK's options for a new relationship with the EU in the wake of Brexit. The UK's position relative to the European Union following Brexit remains undecided. With negotiations ongoing, Bruegel senior fellow André Sapir explains the UK's options, and explores the scope for a new kind of relationship between the two parties. This latest episode of 'The Sound of Economics' considers what it might mean, in reality, for the UK to remain in a customs union with the EU but to leave the single market, as well as what the examples of Turkey and Norway can indicate about the UK's potential future dealings with the EU. André Sapir has also co-authored a blog post with Bruegel deputy director, Maria Demertzis, elaborating on the various paths open to the UK in phase two of the Brexit negotiations. Maria Demertzis has more recently considered in a blog post why a positive Brexit outcome matters not just for the UK, but for the EU too.

Bruegel director Guntram Wolff frames the two debates that will dominate the upcoming meeting of the European Council on 23 February 2018 – the shape of the next EU budget, and the method by which a new European Commission president will be appointed. Major questions still hang over the next EU budget, or multiannual financial framework (MFF), and not just because of Brexit. The next budget, another seven-year MFF that will run from 2021 through to 2027, will likely reflect Europe’s developing priorities in sectors such as defence, border control and fighting climate change. Other sectors may face a cut in spending, particularly given the shortfall left as a result of the UK’s departure. Elsewhere, the European Council and European Parliament have still to reach agreement over the future of the Spitzenkandidaten process, by which the appointment of current European Commission president Jean-Claude Juncker was decided in 2014. These topics are lead items on the agenda for the European Council meeting on February 23. Bruegel director Guntram Wolff features in this episode of ‘The Sound of Economics’, highlighting the key considerations and likely deciding factors in the debates still to be had.

Bruegel fellow Georg Zachmann joins Richard Tol, professor in the Department of Economics at the University of Sussex, and Pieter-Willem Lemmens, head of analysis at the climate policy think-tank Sandbag, for this episode of 'The Sound of Economics', to discuss the impact of Brexit on climate and energy policy in the European Union Britain's departure from the European Union poses questions not only for the EU energy market, but the bloc-wide climate-change targets and emissions trading system. Presented by Sean Gibson, edited by Giuseppe Porcaro In the energy context, Brexit not only marks the separation of Britain from the EU but also places Ireland in a uniquely difficult position, having previously utilised infrastructure in Britain to connect to the rest of the EU. On the matter of climate change, the loss of Britain might make it more difficult for Europe to meet current targets, and set further ambitious goals for the future. In this episode of 'The Sound of Economics', senior Bruegel fellow Georg Zachmann joins the conversation with Richard Tol, professor in the Department of Economics at the University of Sussex, and Pieter-Willem Lemmens, head of analysis at the climate policy think-tank Sandbag. Georg Zachmann co-authored a research paper in November 2017 for the European Parliament’s Committee on Industry, Research and Energy, about the impact of Brexit on the Irish energy system - also writing a Bruegel blog post on the same topic. More recently Georg has written an opinion piece on how climate-change policies risk increasing social inequality.

The final document on the German coalition agreement will have significant consequences for the European Union and the Eurozone. Bruegel director Guntram Wolff gives his assessment of the agreement's key features in this episode of 'The Sound of Economics' The negotiations to form the next German government have been a significant factor in European affairs for months now. With an agreement finally struck, this episode of 'The Sound of Economics' sees Bruegel director Guntram Wolff analyse the document of the agreement and what it means for the EU. In short, there is a lot of continuity: the Bundestag remains in charge of the European Stability Mechanism, and the EU's fiscal rules are praised; there will be money for the EU budget, too. More significant is the will to move towards a common tax base and minimum tax rate for corporate taxation. Overall, this is not a breakthrough for Europe. Further reading: What has driven the votes for Germany’s right-wing Alternative für Deutschland? - by Alexander Roth and Guntram B. Wolff SPEAKER: Guntram B. Wolff, Director, Bruegel. PRODUCTION: Sean Gibson & Giuseppe Porcaro