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Giuseppe Pagano

  • Mardi 2/6/2020
    Giuseppe Pagano

    The consequences of the present corona-crisis are disruptive and unprecedented since1929.  GDP is expected to go down by approximatively 7 % in Belgium and 7,5 % in the Euro Area, with alarming effects on unemployment and public debt.


    The economic authorities have reacted with great vigour. The ECB has ensured the market liquidity, and the governments have increased their deficits. However, one should wonder about the limits of such policies. The monetary policy of the ECB could be questioned if inflation were to exceed the 2 % threshold. Moreover interference by national agencies such as the German Constitutional Court is to be feared. Yet, the limit of public indebtedness is to be found in the availability of lenders at a reasonable rate, which is narrowly linked to the rate and liquidity policy of the ECB. Moreover the cost of the debt has now proved to be more important than the debt ratio as such.


    Finally, one can try to identify the “winners” and the “losers” of the crisis. Among the former are the governments, the collective health systems and research. Among the latter are uncontrolled international exchanges and unlimited delocalizations. De-growth, in its most radical sense, is also to be ranked along the losers. The fate of taxpayers is rather unclear; however it can be hoped that the crisis  would encourage fiscal authorities to privilege the fight against big tax evasion, the taxation of financial transactions and the introduction of a general carbon tax. At last, the reaction of the European Union seems to to get closer to what would be most useful. It is especially the case with the project of common loans set forth by Germany and France. Moreover the new types of taxation mentioned hereabove could be an ideal opportunity for Europe to show how useful she can be.

  • Jeudi 19/9/2019
    Giuseppe Pagano

    This paper provides insight into what the European Union or Euro Area policy could look like if it were more directly inspired by Keynes’s views. It starts from the disappointing results of the EU-EA as far as employment, inequalities or environment are concerned. It also addresses the role of rules and sanctions vs discretion in the decision process, showing that budget rules have often been violated and the corresponding sanctions have never been applied. It suggests that at least 6 policy objectives - employment, price stability, economic growth, trade equilibrium, inequalities and environment - should receive equal priority. Ultimately, it advocates policies that could trigger public investments and create a real solidarity mechanism at the EA level. Drawing on Keynes’s The long run is a misleading guide for current affairs. In the long run, we are all dead, 27 years after the Maastricht Treaty, the paper claims that the long term, ... it’s now.