Policy Brief
- Policy Brief (eng)
Policy Brief (eng)
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20.- The reabsorption of financial imbalances and the resilience of the Spanish economy, 2008-2024: a long-range view
Spain is one of the European Union countries that suffer from excessive macroeconomic imbalances, although the emphasis on their severity has been diminishing of late. With respect to the country’s current account balance or net external borrowing, for example, the European Commission’s analysis in 2023 focused on the problems of countries with an overly negative IIP (Cyprus, Greece, Hungary, Latvia, Lithuania, Portugal and Slovakia), but made no mention of Spain (EC, 2023h). Spain’s absence from the list reflects the fact that the country, since 2021, has succeeded in sustaining foreign surpluses and deleveraging trends initiated over a decade ago. Overall, in May 2024, Spain achieved a degree of normality in relation to its excesses of internal and external debt that helps to explain the resilience of the country’s economy to the shocks experienced since 2020. The improvement, however, is partly asymmetrical. Against a reduction in private debt, there has emerged a high level of public borrowing at a time when the levels of both internal and external debt still need to fall.
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Date added: 13-11-2024
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19.- The Capital Markets Union in light of Next Generation EU
In the comparative analysis of financial systems, there is a widely held theory that the European (and, in particular, the Spanish) system displays a clear predominance of bank intermediation as the primary mechanism for financing economic activity, compared to the Anglo-Saxon (and, in particular, the US) model, in which capital markets play a far greater role in such financing.Based on this insight, the European institutional framework is clearly in favour of diversifying the sources of business finance, to reduce the excessive banking bias that currently prevails, especially in the eurozone. Along the same lines, many commentators are absolutely convinced that the different configuration of financing in the United States is one of the reasons for the country’s greater business dynamism and innovative mindset compared to Europe. This is obviously not the only reason, with the lower rate of entrepreneurship in Europe being another key factor.
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Date added: 28-09-2023
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18.- "Towards a new fiscal governance in the eurozone"
It has long been thought that a monetary union can only function well if its governance imposes extra fiscal discipline on the member countries of the union. I argue that the arguments for extra fiscal discipline in a monetary union are weak. The current Stability and Growth Pact (SGP) is broken. It has incredible complexity that has been built in over the years when it became clear that fiscal discipline based on the use of numerical targets does not work. As a result, it has lost credibility as a way to organize fiscal discipline. There is an urgent need of reform of the fiscal rules embedded in the SGP.In this paper I contribute to the debate by developing the principles that should guide this reform of the fiscal rules in the Eurozone. These principles are that the numerical targets should be replaced by sustainability analyses of each member countries’ budget and debt prospects. In addition, I argue that the reforms should prioritize public investments by making it possible for the latter to be financed by issuing debt. Finally, I argue that any fiscal sustainability governance should be integrated with the ECB’s policies regarding its holdings of government bonds. Decisions by the ECB to sell or not to sell these bonds affect the sustainability of public debts of the member countries of the union.
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Date added: 31-03-2023
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17. - "The Next Generation funds and their effect on the sustainability of the water cycle"
This brief aims to provide an analysis of the use of the Next Generation funds to achieve sustainable water management. To this end, the Spanish Government has drafted the Recovery, Transformation and Resilience Plan (RTRP). The document emphasizes the key role of water in the maintenance and restoration of good ecological status. The idea is based on the fact that environment-friendly water management is needed that guarantees the resource and the ecosystem services it provides. Therefore, for the future, integrated management of water in all its forms (inland, ground, fresh, brackish, transitional and coastal waters) is necessary. It is also crucial to take into consideration the relationship between aquatic systems and the land ecosystems that depend on them. This approach is proposed by Directive 2000/60/EC of the European Parliament and of the Council, of 23rd October 2000, establishing a framework for Community action in the field of water policy, known as the Water Framework Directive (WFD), approved over two decades ago.
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Date added: 22-09-2022
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16.- "Financial imbalances in the Spanish economy 2013-2019, the effects of COVID-19 and the impact of the intervention of the ECB"
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Date added: 26-04-2022
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15.- "Tackling the COVID-19 crisis: moving forwards towards European integration"
The response to the COVID-19 crisis may mark aqualitatively significant step towards accelerating the process of European integration. The battle is obviously not yet over and several obstacles still lay ahead. However, while the EU’s response to the turmoil caused by the Great Recession initially led to a step backwards, the response to the COVID-19 crisis is encouraging. As we have seen, it has paved the way for considerable progress towards fiscal union, with respect to the three pillars on which such a union is based: an EU budge tworthy of the name, a set of resources obtained directly in the form of taxes paid by citizens, and a treasury with the power to issue debt. The EU’s response to the pandemic may also facilitate a step towards the capital markets union, in so far as a new incontestable safeasset will come into circulation,in the form of bonds issued by the Commission. It also reinforces the role of the Commission and the Parliament, to the detriment of intergovernmental agreements. Most importantly, the EU’s response constitutes an unequivocal demonstration of the will to face adversities collectively.
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Date added: 21-04-2021
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14.- "Finances and the Environment"
El Policy Brief number 14 of europeG: "Climate change imposes a cost on future generations that the current generation has no direct incentive to fix, giving shape to what Mark Carney, President of the Financial Stability Board (FSB) and Governor of the Bank of England, has called the “Tragedy of the Horizon”. To address this paradox, and above all to engender the necessary incentives, what better course of action than to have the financial markets put a price on the objectives and commitments agreed to at the Paris Summit? However, to reach this point, providing greater information transparency has first to be achieved. And there are, unquestionably, major information deficiencies in the case of climate-related financial risks."Authors: Ángel Berges, Emilio Ontiveros y Ricardo Pedraz
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Date added: 09-04-2019
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13.- "Economic growth with an external trade balance: A new scenario for the Spanish economy"
Policy Brief number 13 of EuropeG focuses on: “Economic growth with an external trade balance: A new scenario for the Spanish economy”. By year-end 2017, the Spanish economy had posted three consecutive years of growth at a rate of more than 3% per annum while recording significant surpluses both in its current and capital account balances and in its balance of foreign trade in goods and services, the latter showing a tendency to increase in real terms. More significantly, the trade in goods deficit, a characteristic feature of Spain’s foreign accounts, is currently the lowest it has been in fifty years, equivalent to 1.9% of GDP in terms of current values.Authors: Rafael Myro (UCM) and Europe G
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Date added: 02-07-2018
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12.- "Spanish firm size and productivity. The forgotten resource of management quality"
Policy Brief number 12 of EuropeG focuses on "Size and productivity of the Spanish company, the forgotten resource of the quality of management". Its authors Emilio Huerta (Public University of Navarra), and Vicente Salas (University of Zaragoza) analyze the reality of SMEs in Spain, compare it with other countries of the European Union and conclude with the recommendation that productivity should star in the debate on growth and the business dimension.
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Date added: 29-11-2017
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11.- "Launching Europe’s banking union: adapting to the unexpected"
This document, elaborated by the economist Santiago Carbó, discusses in detail the banking union implementation framework in this first stage. Furthermore, compares its different application in Spain and Italy, while revealing other weaknesses related to the very environment of the European banking union, the absence of the deposit protection scheme and the emergence of the fintech competition.
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Date added: 18-07-2017
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10.- "The whys and wherefores of R&D+i policy. The situation in Spain"
EuropeG's Policy Brief number 10 was prepared by Martí Parellada, a member of EuropeG and Luis Sanz Menéndez, a CSIC researcher at the Institute of Public Goods and Policies, entitled "The whys and wherefores of R&D+I policy. The situation in Spain". It analyses in detail the impact of the crisis on investment in Research, Development and Innovation in the global and European context and asks what should be the applicable reforms so that the Spanish economy reaches at least the objective marked by the Spanish Government, of devoting 2% of GDP to R&D in 2020.
Version: 1908
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Date added: 07-06-2017
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9.- "Economic recovery and the persistence of fragilities: Spain’s domestic debt and foreign sector 2013-2016"
This Policy Brief is focus on two highly relevant issues: First, the role of international confidence in Spain’s ongoing recovery and, thus, indirectly, the role of internal reforms, specifically those affecting the governance of the euro and the activity of the ECB. In fact, this radical shift can be identified as the hinge that separates the second recession (2011-2013) from the growth stage (2014-2016), a diagnosis for which there is already broad consensus (European Commission, 2016c). Second, we examine the role being played by domestic and foreign debt in the recovery, given their importance in the origin of the problems underlying the euro crisis (European Commission, 2016A).
Version: 1980
Size: 1.68 MB
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Date added: 11-11-2016
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8.- "The eurozone banking system: a sector undergoing transformation"
This policy brief offers a description of the changes that the banking systems of the eurozone have been exposed to in recent years in terms of both their structure and regulatory framework, with particular attention to the European banking union, the most important project to have been initiated in the last thirty years. It then analyses the basic features that characterise these systems today and identifies the main challenges they face in the immediate future.
Version: 3444
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Date added: 10-05-2016
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7.- "The creation of macroeconomic stabilisation mechanisms in the eurozone"
The Great Recession has revealed, firstly, that fiscal stabilising instruments remain essential and, secondly, that these must be set up at eurozone level, given their limitations at national level. It is the absence of such stabilising instruments that accounts in part for the severity of the austerity policies applied in some countries. The creation of this European stabilising instrument is a priority issue, after the experience to the Great Recession, and its implementation could be a very significant first step towards a genuine fiscal union.
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Date added: 12-11-2015
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6- "Banking Union as a means of strengthening EMU"
The Banking Union must overcome the risks of perverse link between sovereign debt and banking stability so that taxpayers do not return to bear most of the costs of banking crises.
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Date added: 13-11-2014
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5 - "Key aspects in the adjustment of the Spanish economy 2012-14"
The Spanish economy is emerging from the tunnel of the second recession. The external financing situation has improved substantially, and the forecasts for activity and employment anticipate a new cycle, although its strength remains to be seen.
Version: 2508
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Date added: 07-06-2014
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4 - "University reform. A boost for the competitiveness of the Spanish economy"
Structural reforms are essential to ensure the competitiveness of the Spanish economy. Among them, the reform of university legislation to promote excellence, competitiveness and internationalization of the university system plays a key role.
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Date added: 02-12-2013
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3 - "Is the European Union really moving toward a Fiscal Union?"
The euro crisis has put progress toward a fiscal union at the centre of the European debate. At first reluctantly, then ever more clearly, a fundamental consensus seems to have been reached on the need to move toward this fiscal union and on the idea that there will be no monetary union if it is not accompanied by fiscal union.
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Date added: 26-12-2012
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2 - "Competitiveness and deleveraging in Spain: the challenges ahead"
The Spanish economy is immersed in a crisis which reflects the various effects of a series of shocks which have altered the behaviour of the supply and demand factors which drove Spanish GDP growth in previous years.
Version: 2992
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Date added: 10-07-2012
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1- "Towards a European Federal Union: monetary integration and political sovereignty"
The current eurozone crisis is the main threat to monetary union, to the single market itself and, probably, to the global economy as a whole.
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Date added: 15-03-2012