Monetary and fiscal policies in the EU. Is there a difference between EMU and non-EMU members?

The COVID-19 crisis has put the European Union's (EU) ability to respond to external challenges to test. It is not a new issue that has arisen due to the current crisis. The global economic crisis of 2008, and, in particular, the sovereign debt crisis of 2010, highlighted the need for institutional, policy and political reform to ensure the stability and long-term sustainability of the EU project. The EU's asymmetric degrees of integration, in terms of Economic and Monetary Union (EMU) and non-EMU members, resulted in a diverse response to the crisis and, more importantly, mixed-effects from monetary and fiscal policies. This study aims to research the impact of monetary and fiscal policies between 2007 and 2015 on economic growth and employment. The findings show that loose monetary policies at the EU, EMU and non-EMU levels boosted economic growth and development. On the other hand, restrictive fiscal policy had favourably influenced GDP and employment by reducing inflationary pressures produced by expansive monetary policy. However, fiscal policy had a greater impact in the non-EMU countries, demonstrating that this policy can act as a stabilizing force in the face of an overly expansive and common monetary policy. In order to respond effectively to the current and future crises, the EU government should overhaul the way monetary and fiscal policy is conducted and coordinated.

Choosing the Optimal Tool for Fiscal Adjustment or Living under Fiscal Constraints: Panel Evidence from Selected OECD Countries

This article examines the long-run two-way causal relationship between government revenues and spending and their interaction with the yearly change in public debt for eighteen OECD countries by using annual data for 1976-2017 period. The empirical literature has mainly focused on the long run relationship between government expenditure and revenues or other single country time series while only a few studies have used panel causality analysis and none have investigated the link with the evolution of public debt ratios. The purpose of this paper is to present a dynamic model identifying the underlying relationships constituting the fiscal policy set-up in sample countries. We apply a robust dynamic panel causality methodology based on SUR systems and Wald tests with country specific bootstrap critical values. The study also aims to provide the basis for recommendations on the policy response to public finance challenges stemming from exogenous shocks like the global pandemic that began in 2020. By developing an enhanced analysis of the long-term causal relationship between taxation, spending and their interaction with changes in public debt, the study not only provides fresh insights into the sustainability and optimal design of fiscal adjustment efforts but also offers a country-specific schematization as a guide for policymaking.

Real estate risk, yield modelling and market sentiment: the impact on pricing in European office markets

Purpose>The financial and economic turmoil that resulted from the Global Financial Crisis (GFC), included a marked increase in the volatility in real estate markets. Property asset prices were impacted by the real economy and market sentiment, particularly concerning the determination of risk. In an economic downturn, the perception of investment risk becomes increasingly important relative to overall total returns, and thus impacts on yields and performance of assets. In a recovery phase, and particularly within an environment of historically low government bonds, risk and return compete for importance. The aim of this paper is to assess the interrelationships and impacts on pricing between real estate risk, yield modelling outcomes and market sentiment in selective European city office markets.Design/methodology/approach>This paper specifically considers the modelling of commercial property pricing in relation to the appetite for risk in the financial markets. The paper expands on previous work by determining a specific measure of risk pricing in relationship to changing financial market sentiment. The methodology underpinning the research specifically examines the scope for using national and international risk pricing within specific real estate markets in Europe.Findings>This paper addresses whether there is a difference between the impact of risk on the pricing of real estate in international versus regional cities in Europe. The analysis, therefore, determines which city centre office markets in Europe have been most impacted by globalisation including the magnitude on real estate prices and market volatility. The outcome of the paper provides important insights into how changes in risk preferences in the international capital markets have driven and continues to drive yield movements under different market conditions.Research limitations/implications>The paper considers the driving forces which have led to the volatile movements of yields, emanating from the GFC.Practical implications>This paper considers the property market effects on pricing of commercial real estate and the drivers in selected European cities.Originality/value>The outcome of the paper provides important insights into how changes in risk preferences in the international capital markets have driven and continue to drive the yield movements in different real estate markets in Europe.

Die Europäische Union in der Corona-Krise

ZusammenfassungDie Corona-Krise hat alle Mitgliedstaaten der Europäischen Union getroffen — allerdings einige früher und härter als andere. Nun soll ein immens großer Rettungsschirm aufgespannt werden, über dessen Finanzierung, Konditionen und mögliche Auflagen die EU-Mitglieder noch streiten. Auch die Ebenen, auf der die Maßnahmen organisiert werden sollen, sind noch nicht ausbalanciert. Welche Bedeutung kommt dabei der nationalen, welche der supranationalen Ebene zu? Geht es vor allem um die Europäische Währungsunion oder um die gesamte EU? Solidarisches Verhalten gebietet nicht allein die europäische Idee, sondern auch die ökonomische Notwendigkeit, da die Mitgliedstaaten über Lieferketten stark miteinander verflochten sind.Alternate :The Coronavirus crisis has affected al of thel member states in the European Union — but some earlier and harder than others. A large rescue package is to be set up, the financing, conditions and possible requirements of which are still being disputed by EU members. The levels at which the measures are to be organised have not yet been established either. What is the importance of the national level or the supranational leves? Is it primarily about the European Monetary Union or about the EU as a whole? Solidarity is not only required by the European idea, but also by economic necessity, since the member states are strongly connected by their supply chains.