NGEU

Isabel Schnabel: From laggard to leader? Closing the euro area’s technology gap

Retrieved on: 
Saturday, February 17, 2024
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This paper, by means of a DSGE model including heterogeneous firms and banks, financial frictions and prudential regulation, first shows the need of climate-related capital requirements in the existing prudential framework.

Key Points: 
  • This paper, by means of a DSGE model including heterogeneous firms and banks, financial frictions and prudential regulation, first shows the need of climate-related capital requirements in the existing prudential framework.
  • We further show that relying on microprudential regulation alone would not be enough to account for the systemic dimension of transition risk.

Piero Cipollone: The euro at 25: what next for Economic and Monetary Union?

Retrieved on: 
Tuesday, February 13, 2024

We document how gas price fluctuations have a heterogeneous pass-through to euro area prices depending on the underlying shock driving them.

Key Points: 
  • We document how gas price fluctuations have a heterogeneous pass-through to euro area prices depending on the underlying shock driving them.
  • Supply shocks, moreover, are found to pass through to all components of euro area inflation – producer prices, wages and core inflation, which has implications for monetary policy.

Press release - Deal on mid-term revision of EU’s long-term budget

Retrieved on: 
Wednesday, February 7, 2024

Following talks with EU member states, MEPs reached an agreement on the revision of EU’s long-term budget, addressing unforeseen challenges like Russia’s invasion of Ukraine.Committee on Budgets Source : © European Union, 2024 - EP

Key Points: 


Following talks with EU member states, MEPs reached an agreement on the revision of EU’s long-term budget, addressing unforeseen challenges like Russia’s invasion of Ukraine.Committee on Budgets Source : © European Union, 2024 - EP

Eurosystem staff macroeconomic projections for the euro area, December 2023

Retrieved on: 
Wednesday, January 3, 2024

In doing so, we provide a rare application of the NGFS climate scenarios to economic assessment through the lens of the macroeconomic modelling frameworks underlying the scenario construction (e.g.

Key Points: 
  • In doing so, we provide a rare application of the NGFS climate scenarios to economic assessment through the lens of the macroeconomic modelling frameworks underlying the scenario construction (e.g.
  • Full recycling through government investment yields the strongest output multiplier, whereas recycling through household transfers or reduced income taxes yields the lowest multiplier.
  • During the transition, euro area macroeconomic variables respond very similarly if two-pillar or price level-targeting monetary policy rules are followed.

Highlights - Members to discuss EU borrowing costs - 09.10.2023 - Committee on Budgets

Retrieved on: 
Wednesday, October 4, 2023

Members to discuss EU borrowing costs - 09.10.2023

Key Points: 
  • Members to discuss EU borrowing costs - 09.10.2023
    04-10-2023 - 14:57
    Following a workshop on ‘EU borrowing costs: drivers and dynamics - A comparative perspective’ for the Committee on Budgets took place on 22 May 20231, experts have estimated that yearly interest costs borne by the EU budget could increase quickly in the next few years to reach €10.8 billion.
  • Members requested the experts to deliver a follow-up briefing to provide detailed answers to a number of questions raised during the workshop.
  • The authors of the briefing will elaborate on the main takeaways of the briefings and provide:
    The authors of the briefing will elaborate on the main takeaways of the briefings and provide:
    - an update of the spreads between the EU and other major European sovereign issuers,
    - a projection of the total costs of the NGEU borrowing until 2058,
    - an assessment of the adequacy between such a projection and the second batch of own resources,
    - an evaluation of the savings resulting from a tentative tightening of the spreads,
    - additional recommendations to reduce and optimise EU interest rate costs.

Highlights - BUDG-CONT - Presentation of ECA Report on NGEU debt management - 19.07.23 - Committee on Budgets

Retrieved on: 
Wednesday, July 12, 2023

BUDG-CONT - Presentation of ECA Report on NGEU debt management - 19.07.23

Key Points: 
  • BUDG-CONT - Presentation of ECA Report on NGEU debt management - 19.07.23
    11-07-2023 - 12:11
    On 19 July 2023, Jorg Kristijan Petrovič, Member of the European Court of Auditors (ECA), will present the Special report 16/2023 "NGEU debt management at the Commission – An encouraging start, but further alignment with best practice needed" to the Members of the Committees on Budgets and on Budgetary Control.
  • This report finds that the new debt management system established for NextGenerationEU (NGEU) allowed the EU to borrow promptly from the capital markets, and provided the funds in good time.
  • The Court, however, calls on the Commission to better measure and report how it manages the EU's debt in order for NGEU to be in line with international best practices.

Press release - EU revenue: a new start for EU finances, a new start for Europe

Retrieved on: 
Wednesday, May 10, 2023

The Commission has already proposed a first batch of new own resources in 2021.

Key Points: 
  • The Commission has already proposed a first batch of new own resources in 2021.
  • Background
    In 2020, along with the current long-term EU budget (multi-annual financial framework 2021-2027), the EU institutions agreed on a legally binding roadmap introducing new sources of EU revenue.
  • On that basis, the plastics own resource, introduced in 2021, was the first new source of EU revenue since 1988.
  • The Commission has confirmed that it will, as agreed in the roadmap, propose another basket of new own resources still this year, earlier than stipulated in the roadmap.

Highlights - Debate on impact of increasing NGEU borrowing costs on the 2024 EU budget - 17.4.23 - Committee on Budgets

Retrieved on: 
Tuesday, April 18, 2023

Debate on impact of increasing NGEU borrowing costs on the 2024 EU budget - 17.4.23

Key Points: 
  • Debate on impact of increasing NGEU borrowing costs on the 2024 EU budget - 17.4.23
    14-04-2023 - 14:53
    The draft report describes the increasing pressure on the EU budget resulting from increased borrowing costs associated with the European Union Recovery Instrument.
  • It underlines that the current borrowing costs, driven by a high interest rate climate, are exhausting resources intended for the budget to respond to emerging needs and jeopardising investment through agreed programmes in the EU's long term budget (multiannual financial framework - MFF).
  • The report was drawn up by the BUDG Chair in conjunction with the 2024 and 2023 General Budget Rapporteurs and the Negotiating Team for the Multiannual Financial Framework 2021-2027 and Own Resources.
  • The report was drawn up by the BUDG Chair in conjunction with the 2024 and 2023 General Budget Rapporteurs and the Negotiating Team for the Multiannual Financial Framework 2021-2027 and Own Resources.

Spain Construction Industry Report 2022: Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Size, Trends and Forecasts to 2026 - ResearchAndMarkets.com

Retrieved on: 
Thursday, January 26, 2023

The "Spain Construction Market Size, Trends and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2022-2026" report has been added to ResearchAndMarkets.com's offering.

Key Points: 
  • The "Spain Construction Market Size, Trends and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market Analysis, 2022-2026" report has been added to ResearchAndMarkets.com's offering.
  • Despite this growth in 2022, output in real terms is still around 13% lower than in 2019, reflecting the industry's struggles to bounce back from the COVID-19 disruption.
  • The short terms outlook is also fairly gloomy, with the Spanish construction industry expected to shrink marginally by 0.3% in 2023, owing to headwinds caused by rising interest rates and high energy and construction material costs.
  • According to the Eurostat, the average construction cost index rose by 13.8% YoY in the first seven months of 2022.

The safe asset potential of EU-issued bonds

Retrieved on: 
Saturday, January 21, 2023

The lack of euro-denominated safe assets and the fragmentation of the market are problematic.

Key Points: 
  • The lack of euro-denominated safe assets and the fragmentation of the market are problematic.
  • In the absence of a supranational euro-denominated safe asset, a flight to safety would entail capital flowing out of vulnerable countries and into safe havens.
  • Both initiatives were proposed in the context of the EU’s response to the recession in the wake of the coronavirus (COVID-19) pandemic.
  • As of December 2021, the amount of outstanding EU bonds had grown to €215 billion in total.
  • The first SURE bonds were issued in October 2020, while the first NGEU bonds were issued in June 2021.
  • By 2028 NGEU volumes are foreseen to reach €800 billion, more than twelve times the level in December 2021.
  • Including the approved funding for other smaller programmes, the total available amount of EU bonds is set to exceed €1 trillion by 2028.
  • This stability of EU yield spreads does not mean that EU bonds will automatically become a supranational euro-denominated safe asset.
  • A safe asset is traded in liquid markets.
  • Market liquidity ensures that investors can sell their asset at any time without causing a major change in the market price.
  • (2022) we also argue that a safe asset’s market liquidity should be sufficiently high to accommodate central banks’ monetary policy operations.
  • Finally, the perception of EU bonds as safe assets also hinges on the continuation of their favourable regulatory treatment.
  • For such an instrument to be viable, a deep and liquid repo market would need to evolve first.