The Sound of Economics

The deepening and enlargement of Europe’s capital markets has long been a policy target for the EU – indeed, it is a flagship priority of the current Commission. Many legislative proposals have been forwarded, and there is widespread agreement on the necessity of the Capital Markets Union (CMU) project, but few tangible measures have been formally adopted.Joining Bruegel director Guntram Wolff for this week’s Director’s Cut of ‘The Sound of Economics’ is Valdis Dombrovskis, vice-president of the European Commission, overseeing the department of Financial Stability, Financial Services and Capital Markets Union.The Bruegel director met Vice-President Dombrovskis at the informal meeting of the EU’s Ecofin Council in Sofia, where the former presented a research paper (co-written by André Sapir and Nicolas Véron) advocating significant steps forward in the CMU project.The vice-president here expounds on the Commission’s own planned measures to have significant initial elements in place before the end of the current term in 2019.

The EU's transport sector is now a significant burden in the context of commitments made under the Paris Agreement to reduce carbon emissions. Transport is the only sector in which Europe's CO2 emissions are now higher than in 1990.Countermeasures are imperative, but it is not a simple challenge to abandon car-friendly policies; policymakers are not blind to economic benefits brought about by the automotive industry in the past.In this episode of 'The Sound of Economics', Bruegel fellows Simone Tagliapietra and Georg Zachmann discuss the findings of a Policy Brief that they have co-written containing policy prescriptions for cleaning up Europe's transport sector.Utilising taxation, as well as funds already allocated within the current multiannual financial framework, the EU can incentivise change not only in the habits of Europe's citizens but its industry leaders too, promoting the policy discussion at country- and city-level where locally appropriate plans and changes can be introduced. Though the EU's research and development funding for transport is dwarfed by that of the continent's automotive sector, there are fields in which the EU can take the lead – fields which private money would otherwise leave undeveloped.

As global trade war continues to unfold, Bruegel director Guntram Wolff is joined for this Director's Cut of 'The Sound of Economics' podcast by Bernd Lange MEP, chair of the Committee on International Trade (INTA), to discuss Europe's options.Increasingly it appears that the EU will have to choose between standing strong with the established laws of the World Trade Organisation (WTO), or striking a deal for a permanent reprieve from the US trade tariffs.There is no question that the tariffs have significant implications for European industry. Indeed, as the US and China brandish lists of further products on which they would consider imposing tariffs, the full scale of the potential future damage to EU exporters is unclear. Yet there remains some hope that the EU could align with other nations to use the WTO to bring US President Trump back on side.To discuss what opportunities as well as threats this current stand-off presents to the EU, Bernd Lange - member of the European Parliament and chair of the Committee on International Trade (INTA) - joins Bruegel director Guntram Wolff in this instalment of '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.