The European Union post COVID-19: Preserving innovation's cutting edge and fostering social cohesion

Despite a long period of post-crisis recovery, the COVID crisis caught the EU in a precarious state. The policy and institutional innovations during the financial crisis tempered the macroeconomic imbalances that had caused the crisis. Nevertheless, the EU was left with a strong trend of divergence in economic and social performance because of the lack of sufficiently strong reforms at EU and national levels. But the lessons of the previous crisis were learned. This time around, the EU-level policy and institutional innovations were decisive. The fiscal capacities of the hard-hit countries were strengthened quickly. Green and digital transformation will require a major new wave of innovation in the corporate sector in the EU. This, in turn, critically hinges on improving the quality of public and private institutions and advancing with the implementation of major reforms at the EU level, such as the digital single market or Capital Market Union. Implementing these reforms fully, and preventing later reversals is a key to stemming the trend of economic and social divergence, thus strengthening the coherence of the EU.

Constraints to Economic Growth in South Africa

This chapter analyses the drivers and constraints on the rate of economic growth in South Africa from the 1950’s apartheid-era through to the democratic period post-1994. Key structural factors identified as impacting on the rate and composition of economic growth include the country’s history of racial injustice and exclusion, its industrial structure and linkages to the global commodity price cycle, the evolution of macroeconomic imbalances and related infrastructure investment failures, and the impact of weak state capacity and corruption. Thereafter, the chapter outlines a number of strategic policy interventions for overcoming constraints to inclusive economic growth in South Africa.

Tsoukalis and the Political Economy of European Integration

This chapter is a review study of Loukas Tsoukalis’ published work on the political economy of European integration. A reverse chronological order is followed, its benchmarks being provided by Tsoukalis’ books; his journal articles and chapters in edited volumes are also reviewed, albeit selectively. Tsoukalis’ main research interests lie with the issues of money, monetary unification, and macroeconomic policy in the EU (and the euro area). Tsoukalis has especially been concerned with structural asymmetries, macroeconomic imbalances, and economic and social inequalities frustrating the European project, while being also reinforced by European economic integration and globalization. Yet, he has never confined his research within the limits of conventional economic analysis. Tsoukalis has, instead, sought to make sense of the political perplexities inherent in European economic integration; and he has constantly looked at the bigger picture. At the methodological level, Tsoukalis has been rather sceptical of mainstream economic theory; and he has often set himself free from the rigours of formal methodology, while having adopted an empirical approach. Sometimes he has embraced a normative rather than strictly analytical perspective, thereby articulating policy suggestions—and feeding ideas into the European political discourse. Tsoukalis has, thus, been influenced by Keynes’ ideal stereotype of economists as men of affairs: philosophers, politicians, and pragmatists. Above all, Loukas Tsoukalis has unequivocally been making the case for European integration, while also taking into account objective constraints and subjective sensibilities—a European idealist and a realist at one and the same time.

Profit rates and assets-price inflation in the Spanish economy

The paper provides an in-depth analysis of profitability in Spain between 1995 and 2014, showing that behind the asset-price inflation of the growth period and its corresponding macroeconomic imbalances, an underlying problem of capital valorization can be found. For this purpose, a study of various measures of profitability is carried out based on the concept of productive labor and highlighting the role of finance (interest rates and indebtedness). The evolution of the profit rate in previous years is also shown , together with a comparison with countries in the Eurozone, both in the most advanced areas and in the periphery. The paper reveals the large extent of the underlying profitability crisis, with a huge fall of profit rates from the late sixties, during the period of the housing boom, and throughout the subsequent recession. In addition, this drop in profitability stands out in relation to other economies of the European periphery. Hence, the study puts the rate of profit at the center of the debate on the Great Recession in Spain, despite its absence in much of the economic literature.

Stabilność finansowa Unii Europejskiej: czy potrzebne są kolejne reformy?

The article deals with reforms aimed at strengthening the financial stability of the eurozone and the EU. First, it refers to the “original sin” of the eurozone and the errors committed during its construction in the early 1990s. Then, the lessons from the double crisis of 2007–2009 and 2010–2012 are analysed, and the four main dilemmas that the EU faces in the area of institutional reforms are formulated. The overview of the implemented reforms and their proven impact on the macroeconomic imbalances leads to the conclusion that – although the above-mentioned double crisis combined with the global pandemic crisis have already mobilised the EU to introduce many important changes – the reform agenda is still not finished.

Politicile sociale în perioada post-criză financiară: România încotro? Contribuția Semestrului European în dirijarea măsurilor de politică socială în domeniile ocupării și incluziunii sociale

After implementing one of the toughest austerity programs in the European Union during the financial crisis, Romania returned to continuous economic growth for eight years (2012−2019), not before concluding between 2011−2013 two preventive agreements with Troika to reduce its macroeconomic imbalances. This continuous economic growth was also reflected in the achievement of the national targets under the Europe 2020 Strategy. In order to better coordinate economic and budgetary policies, the European Union has launched the European Semester. Although the main objective of the latter was to coordinate Member States' efforts to implement fiscal budgetary policies aimed at preventing macroeconomic imbalances and controlling public finances, after 2015, the European Semester began to incorporate social policy objectives, especially in the area of employment and social inclusion policies. By using the index of commodification/ decommodification of social policies developed by Paul Copeland, I illustrate, by analyzing the National Reform Programs and Country Specific Reports, that half of the policies taken in the two areas were towards partial commodification or commodification, and other significant measures towards commodification and decommodification, e.g. types of policies addressed to vulnerable groups trying to (re)integrate them into the labor market, even if in conditions that do not necessarily lead to social inclusion. Keywords: social policies; European Semester; Europe 2020; de/comodification; neoliberalism.

Second Generation Reforms

Economic reforms include comprehensive and radical changes in the functioning of the economic system and its main rules. There is no clear and generally accepted classification of economic reforms in the literature. In this study, economic reforms are analyzed by classifying them as first-generation reforms and second-generation reforms. First-generation reforms are made in macroeconomics for the purposes of eliminating macroeconomic imbalances, ensuring stability, controlling inflation, ensuring fiscal and monetary discipline, reducing public debt. Second-generation reforms are microeconomic reforms, which include strengthening the infrastructure of the market economy, increasing efficiency, enhancing the competitive power, and strengthening the institutional infrastructure that creates competitive markets. The aim of this study is to examine the theoretical framework of first-generation and second-generation reforms in line with macroeconomic and microeconomic expectations and to explain and discuss the main areas of second-generation reforms.

Quantifying the Probability of a Banking Crisis and the Implications for Sovereign Risk

Identify and validate tools that anticipate the influence of macroeconomic indicators, whose history has indicated, at international level, episodes of economic collapse are the main objective of the paper. Using a logistic regression, I captured a model for quantifying the probability of banking crises, integrating indicators of the scoreboard on macroeconomic imbalances, as well as the sovereign risk premium for European countries. In this sense, the results show the premises underlying the elaboration of the analytical framework for the propagation of sovereign risk at the level of credit institutions.