Future is Blue

Is the recovery strong enough? Are the EU Next Generation programs robust enough to keep the recovery momentum? How concerning is inflation? To get some answers we are joined by Jean Pisani-Ferry, Tommaso Padoa Shioppa chair of the European University Institute and Senior Fellow at Bruegel think tank, and Raymond Torres, Funcas Europe Director.

After an expansion of 5.5% in 2021, driven mostly by consumer spending a spike in investment and trade in goods above pre pandemic levels, global output is projected to grow by only 4% in 2022 and 3.5% in 2023.

There are a number of concerning factors for policymakers, such as the spread of new variants, persistent labour market and supply chain challenges, rising inflation…. Now, can any of this trigger a major crisis?

The current rules were born in the 90s and, in a nutshell, they mandate Member States to keep public debt below 60% and public deficits below 3% of GDP. Fiscal rules were suspended last year so that Member States had fiscal margin to fight an unprecedented crisis. Now everyone seems to agree that we need a new framework. 

In this episode we cover why the EU needs different fiscal rules and why a green golden rule may be a good idea. We also discuss the potential obstacles for reform.

Don't miss this episode if you want to know what are the key takeaways of the UN COP26 Glasgow summit.
We also take a look at how economic recovery can be affected by green transition plans. Is Europe doing enough to fight climate change? Can the green agenda be challenged by a cold and expensive winter? These are some of the questions driving the conversation between María Mendiluce and Raymond Torres.

There are not enough workers. Businesses are struggling to hire all the workers they need. As of the first quarter of 2021, the eurozone´s active workforce remained 2.6 million below pre-pandemic levels, while the US labour force still has almost 2 million fewer people. 
What can policymakers in both side of the Atlantic do about it? 

Olaf Scholz, the SPD candidate has come first with a very small margin. Presumably, he will try now to form a coalition with the Green Party and the liberals of FDP. This would be the so-called traffic light coalition (red, green and yellow). A Jamaica option is also on the table (with the CDU joined by Greens and Liberals).
Worth noting as well that in both traffic light and Jamaica option, the Greens would be positioned as the second partner. This should be important for the EU economic agenda, according to Peter Bofinger 

Raymond Torres in conversation with Carlos Carnicero Urabayen analyse the key economic risks for the rest of 2021.
Recovery is well under way and unemployment keeps falling in most EU countries. Pre-pandemic jobs levels are expected in the next few quarters. However, there are a few concerns to keep a close eye on over the next few months. Inflation, high levels of public debt and the capacity to combine economic life with a persistent pandemic are key economic concerns these days.