'The Sound of Economics' podcast continues with an instalment of the Deep Focus series, with Bruegel fellow Marek Dabrowski talking to Sean Gibson about the findings of his research paper on Russia's growth problems (co-written with Antoine Mathieu Collin). The Russian economy has weathered several crises in recent decades, most recently between 2014-16. Though this latest dip was relatively not so deep, growth has returned much more slowly this time around than in previous years. Some problems are age-old, while others are a product of recent political movements and developments. In this episode the conversation specifies some of Russia's institutional shortcomings and structural economic weaknesses, accounting for the country's efforts at macroeconomic management and the evolving demographic difficulties particularly concerning Russia's working-age population.  The discussion also reflects on the particular economic impacts of Russia's involvement in Ukraine, and looks ahead to the most vital and realistic possible remedial measures that could yet be taken. If you are interested in more of Bruegel's work on this topic, we recommend Marek Dabrowski's blog post on how Russia's foreign policy obstructs its attempts at economic modernisation. Also consider the same author's recent publication, 'Can emerging markets be a source of global troubles again?'

Bruegel fellows Rebecca Christie and Nicolas Véron discuss how the map of the EU's financial services industry has begun to change, and how it might eventually settle. The Brexit process has begun to unravel the supremacy of London as the financial centre of Europe, yet it remains unclear how the map of the EU's financial system will eventually be refigured. Several cities have emerged to compete not only for the business that is leaving the UK's capital but for new investment as well. This raises broader questions about whether it is more beneficial to have a single hub or to spread financial services across numerous locations. It also poses difficulties for firms that relocate, some of whose general staff may prefer a different destination to that desired by the lawyers and compliance officers. Brexit has set in motion events that will not be undone even if the UK were to throw the process in full reverse, and remain in the EU, and the idea has been mooted that Brexit merely accelerated a desertion of London that may have happened in any case. Still, the future landscape of the EU's financial services industry will still largely depend on the final shape of the UK's future relationship with the EU. Broadly, observers would expect a harder Brexit to yield a swifter and more seismic movement away from London. In this episode of the Bruegel Backstage podcast series, Bruegel visiting fellow Rebecca Christie and senior fellow Nicolas Véron discuss the early developments in this direction, and the likeliest areas of future progression. Each of the discussants made presentations at the Bruegel event 'The emerging new geography of financial centers in Europe', which was conducted under the Chatham House rule. For further reading, we recommend this article written by Nicolas Véron about the relocation of banking business from London to elsewhere in Europe in the wake of the Brexit referendum vote.

Maria Demertzis sits down with Bruegel senior fellow André Sapir to break down the news, discussing the events leading up to the renewed EU-US trade talks, and the likely future course. On 15 April 2019, the European Council approved mandates for the Commission to resume trade negotiations with the United States, which are to be centered around eliminating industrial tariffs. Although already a breakthrough, the talks are set to encounter many difficulties given their highly political nature. Bruegel's deputy director Maria Demertzis sits down with senior fellow André Sapir to assess the news, discussing the events leading up to the renewed talks and the likely future outcomes. A consistent theme in the making of any EU trade deal is the repeated declaration that it would only engage with countries that are signatories to the Paris Agreement. In 2017, the Trump administration announced the US' intention to withdraw from that agreement, which should in theory exclude the possibility of a trade deal. Maria and Andre discuss just how likely it is for the deal to come to fruition against this backdrop. Lastly, the discussants touch upon how the fractured EU-US trade relationship affects the multilateral trading system and, by extension, global economic growth. For further reading, we recommend the Policy Contribution of Uri Dadush and Guntram Wolff, which analyses how Europe can act in the interest both of itself and the multilateral system amid the ongoing global trade crisis. Similarly, consider Alicia García-Herrero's recent Working Paper on the the options available to the EU in the face of the US-China trade stand-off.

In this episode of the Director's cut, Guntram Wolff discusses with Alicia Garcia Herrero about the results of the 21st EU-China Summit.  The EU and China committed to further strengthen the EU-China strategic partnership at the 21st EU-China summit. Both sides agreed on a joint statement setting out the direction for EU-China relations in the years to come. Leaders expressed their joint support for multilateralism and rules-based trade. They reaffirmed their joint engagement to reform the World Trade Organisation. The EU and China agreed to work together to address industrial subsidies. They also discussed foreign and security issues in their respective neighbourhoods. Bruegel's director and Alicia Garcia Herrero comment on the joint declaration and the challenges for the next steps in this cooperation.  Further reading on Eu-China on Bruegel website

Bruegel director Guntram Wolff talks to Padmashree Gehl Sampath, a Berkman Klein fellow at Harvard University, on the consequences of ‘new manufacturing’ for European industrial policymaking. In this Director’s Cut of ‘The Sound of Economics’, Bruegel’s Guntram Wolff discusses Industry 4.0 with Harvard University Berkman Klein fellow Padmashree Gehl Sampath. Europe is yet to truly explore what interventions can and should be made with regard to the digitisation of industrial policy. But the ongoing development of technologies obliges the EU to examine how best to create a level playing-field for companies, and how to ensure that newly compiled sets of data can contribute positively to the welfare of its citizens. The deployment of Europe’s General Data Protection Regulation brought into focus the potential negative consequences of people’s data being amassed. Yet, as the discussants consider here, there are many potential works to which these data can be put that would serve a greater public good. But this will only follow once policymakers formulate fresh approaches tailored to the challenge, and propose how they will follow through on their aforementioned obligations. If you would like to read more on this topic, we recommend our blog post by Silvia Merler on machine learning and economics.

Bruegel director Guntram Wolff and senior fellow André Sapir discuss how potential WTO reform might position the organisation differently towards China. In this Director's Cut of 'The Sound of Economics', Guntram Wolff talks to Bruegel senior fellow André Sapir about his upcoming paper on the WTO reform, specifically what is necessary in order for the Chinese economic system to be compatible with the global multilateral trading system. China has recently been atop the European policy agenda, especially with President Xi's recent visits to Rome and Paris ahead of the EU-China Summit in April. The discussants here walk us through the main challenges in the EU's quest to position itself vis-à-vis China, including the issues of forced technology transfers and the behaviour of Chinese state-owned enterprises. For further reading, we recommend the Bruegel Policy Contribution by Uri Dadush and Guntram Wolff on how Europe should approach the unfolding crisis in global trade.

This episode of 'The Sound of Economics' features Bruegel senior fellow J. Scott Marcus in conversation with Lise Fuhr, director general, European Telecommunications Network Operators' Association (ETNO). The next wave of mobile network innovation is provoking great excitement in the industry. And indeed, there is substantial potential for improvement. However, the exact form of the technology and the appropriate policy support are still far from clear.  The next generation of mobile technology, 5G, is being developed along markedly different lines from previous generations. In the past, mobile generations were generally characterised by a core technology (or sometimes by two or more core technologies), and were designed to fulfil the requirements of a fairly small number of mobile voice and data applications. By contrast, 5G is being developed to fulfil the needs of multiple use cases. In this episode Scott Marcus and Lise Fuhr outline the challenges of 5G deployment in Europe, their policy implications, and the impact for the citizens.  For further reading we recommend the blog post by Scott Marcus High expectations for 5G confront practical realities. This podcast was recorded during the event Rethinking Industrial Policy in the Digital Age, an all-day conference held on 21 March 2019, about how the European policy-making will have to adapt to the digital transformation.

Bruegel's Maria Demertzis welcomes Yale Law School professor Yair Listokin to this Director's Cut of 'The Sound of Economics', to discuss how law might be deployed as a macroeconomic tool to counter financial crisis. In this episode of Director's Cut, Bruegel's deputy director Maria Demertzis talks to Yair Listokin, a professor at Yale Law School, about the effect law could have on achieving macroeconomic objectives. In his new book titled 'Law and Macroeconomics', Yair Listokin puts forward the idea that law has the ability to function as an instrument of macroeconomic policy. He argues that the time it took for private spending to recover after the 2008 financial crisis could have been cut, had legislation played a more vital role in the process. Here the two elaborate on these ideas, focusing particularly on the perceived trade-off between law's role in maintaining stability, and its potential to be used as a real-time response to economic shocks. They also discuss the applicability of this policy approach in the European reality of multiple legal frameworks and central banks struggling to stimulate aggregate demand at the zero lower interest rate bound. You can find more on macroeconomic policy in previous editions of the Director's Cut. First, we recommend Bruegel director Guntram Wolff's conversation about the growth and stability challenges facing the global financial system, with Tharman Shanmugaratnam, deputy prime minister of Singapore and chair of the G20 Eminent Persons Group, and Jean Pisani-Ferry, mercator senior fellow at Bruegel. Second, consider Maria Demertzis' discussion with Martin Sandbu of the Financial Times, on the topic of what the field of economics has learned in the decade since the financial crisis.

This episode of 'The Sound of Economics' features Bruegel visiting fellow Elina Ribakova in conversation with Marc-Olivier Padis and Jean-Paul Tran Thiet about the reform of the Common European Asylum System (CEAS). Asylum is a fundamental human right and an international obligation, first recognised in the 1951 Geneva Convention on the protection of refugees. Between 2013 and 2017, 4 million asylum applications were filed in the EU. This high number resulted in growing tensions between Member States, with some of them displaying non-cooperative behaviour. The migration crisis of 2015 revealed the inadequacies of European legal tools and, by extension, management of migration flows. In this context, Institut Montaigne jointly with Terra Nova have written a report which calls for a reform of the European asylum policy and for a rapid, unified response to the humanitarian emergency in the Mediterranean. In the context of recent rise of populism and nationalist tendencies in Europe, creating a binding mechanism for solidarity is a daunting task. Currently, the EU is in the process of reshaping the Common European Asylum System, but the negotiations have shown close to no progress. In this episode of Backstage, Elina Ribakova, a visiting fellow at Bruegel welcomes Marc-Olivier Padis, head of studies department at Terra Nova, and Jean-Paul Tran Thiet, senior fellow at Institut Montaigne, to make a case for this reform. Together, they discuss the key elements of the revised system, which include improved monitoring of the asylum process, as well as efforts for equitable burden sharing. For further reading, we recommend our blueprint “People on the move: migration and mobility in the European Union“, written by Uuriintuya Batsaikhan, Zsolt Darvas and Inês Gonçalves Raposo. Zolt Darvas also contributed to the debate on migration and refugees in Europe with two blogs on similar topics: “Beyond border control, migrant integration policies must be revived“ and “The challenge of fostering financial inclusion of refugees“. This podcast episode was recorded during an event Saving the right to asylum on March 5th, 2019.

This episode of 'The Sound of Economics' features Bruegel research fellow Simone Tagliapietra in conversation with Sir Philip Lowe and Alberto Pototschnig about the progress of the European energy transition as we prepare to enter the third decade of the 21st century.  In this episode of Backstage, Bruegel's Simone Tagliapietra welcomes Sir Philip Lowe, former director general at the European Commission, DG ENER, and Alberto Pototschnig, director at the European Agency for the Cooperation of Energy Regulators (ACER). Together, they elaborate on the main trends driving the European energy transition towards greater sustainability, energy security and economic competitiveness. They also assess whether the EU has the necessary institutions to ensure a smooth process for a rapidly growing and more integrated energy market. Among the key challenges is the effective management of an increasingly democratised energy sector, which requires – among many things – innovative solutions in energy storage and use of renewables. The discussants also touch upon the subject of distributional effect of climate policies, as the recent unrest in France shows that this issue will sit high on the agenda as new strategies are implemented over the coming years. For further reading, we recommend a Policy Contribution co-authored by Simone Tagliapietra on European automotive industry's place in the global electric vehicle revolution, as well as a Blueprint by Grégory Claeys, Gustav Fredriksson and Georg Zachmann on distributional effects of climate policies. This podcast episode was recorded during an event The European Energy Transition: A year ahead of the Twenties on February 19th, 2019.

Bruegel fellow Dirk Schoenmaker walks Sean Gibson and 'The Sound of Economics' listeners through his latest working paper, focusing on how to make monetary policy in Europe more climate-friendly In this episode of the Deep Focus podcast series, Bruegel's Dirk Schoenmaker explains his proposed greener alternative to the ECB's current 'market-neutral' approach to monetary policy. Elaborating on research contained within a recent Bruegel working paper, the author shows that significant strides can be made while remaining within existing constraints and with due considerations for the primary vital purpose of monetary policy. If you would like to learn more on this topic, we recommend Dirk Schoenmaker's blog post on greening monetary policy, published in conjunction with the aforementioned working paper.

In this episode of Director's Cut, Stephanie Segal of CSIS joins Bruegel's Guntram Wolff and Maria Demertzis for a conversation about the tension between free trade and national security issues, and the emerging threats to multilateralism. In a changing geopolitical order, with China on the rise, the linkage of economic and national security is more evident than ever. The boom of disruptive new technologies is accompanied by increasingly country-centric political tendencies, and the more and more antagonistic stance of the US towards the EU and China. Taken together, a unique setting emerges for dealing with pressing issues in economic security. Stephanie Segal, deputy director and senior fellow of the CSIS Simon Chair in Political Economy, joins Bruegel director Guntram Wolff and deputy director Maria Demertzis to discuss the looming challenges. They sketch out the approach taken by key global players to balance the continuous benefits of free trade against the need to safeguard national security interests. The new trade-restrictive measures – such as increased scrutiny over foreign direct investment – have obvious consequences for global economic growth and the rules-based multilateral trading system. The discussants elaborate on the importance of preserving multilateralism, and the role of international organisations in the process.  For further reading, we recommend an opinion piece by Jean Pisani-Ferry where he portrays the current international economic and geopolitical order as increasingly reminiscent of chess, as well as an economic blogs review by Bowen Call on the impact of recent US mid-term elections on the world economy.

Bruegel senior fellow J. Scott Marcus joins Sean Gibson for this episode of Deep Focus on the 'The Sound of Economics', elaborating on a Bruegel study for the European Parliament into the progress made with the Commission's Digital Single Market Strategy since 2015. In a study for the European Parliament, Bruegel senior fellow J. Scott Marcus (together with co-authors Georgios Petropoulos and Timothy Yeung) has reviewed the gains delivered so far by these new measures, insofar as they can yet be determined. The authors also look at what the next legislative term might deliver, what realistic progress can be expected and what business remains unfinished regarding measures implemented by the current Commission. Speaking to Bruegel press officer Sean Gibson in this episode of the Deep Focus podcast series, Scott Marcus specifies some of the real achievements that the DSM can - and, indeed, has begun to - deliver for both consumers and producers. More broadly, the DSM is put in the context of efforts to digitise European society, specifically how well policies towards the former are keeping pace with the latter.  We invite you to review the research paper in question in this episode, but also recommend consulting Scott Marcus' testimony before the European Parliament Committee on the Internal Market and Consumer Protection (IMCO).

Bruegel fellows Alicia García-Herrero and Uri Dadush join Guntram Wolff for this Director's Cut of 'The Sound of Economics', focusing on the progress made by China's Belt and Road Initiative, how it will continue to develop, and the reactions it has stirred across the world. China’s Belt and Road Initiative (BRI) is a trade and development strategy proposed by Xi Jinping in 2013. It aims to enhance development prospects via infrastructure, trade, and investment on a trans-continental scale, and is hence often referred to as 'the 21st century's Silk Road'. Five years after its launch, how well has the BRI been received and how much potential does it still hold? Two Bruegel scholars, Alicia García-Herrero and Uri Dadush sit down with Bruegel's director Guntram Wolff to discuss their analyses of the initiative. In a recent Policy Contribution, Uri Dadush and Michael Baltensperger reflect on the background and context of the BRI, and critically assess the project's potential for future performance. In this podcast episode, Uri points to the worrisome aspects of the initiative, particularly the lack of transparency and due diligence concerning the issue of debt trap, as well as China's poor regard for the possible environmental impact. In a newly released Working Paper, Alicia García-Herrero and Jianwei Xu analyse large amounts of data to identify the trends in the global perception of the BRI. In this episode Alicia lets us in on their findings. For example, she explains why – despite the generally positive image of the initiative – it is the Central European countries, which benefited from substantial assistance from China, that have a relatively negative perception of the initiative. For further reading, you may consider Simone Tagliapietra and Shivali Pandya's blog post on Chinese investment in European maritime ports, as well as a piece by Alicia García-Herrero and Jianwei Xu discussing what the Belt and Road Initiative means for EU trade.

This episode of The Sound of Economics features Bruegel senior fellow Zsolt Darvas in conversation with Maurizio Bussolo and Bernadette Ségol about income inequality in Europe and Central Asia, and the policy principles underpinning a possible new social contract.  Although income distribution in Europe and Central Asia reaches a fairly egalitarian standard relative to the rest of the world, the current levels of inequality among individuals and households are a major cause of dissatisfaction. In the time of globalisation and rapid technological change, when income inequalities heavily affect people's security and well-being, the demand for a new social contract (and hence welfare state) is apparent. But what would a renewed social contract look like? In this episode of Bruegel Backstage, senior fellow Zsolt Darvas talks to Maurizio Bussolo, the lead economist for Europe and Central Asia at the World Bank, and Bernadette Ségol, the former secretary general of the European Trade Union Confederation. The document that brings them together is the recently published World Bank report, “Towards a New Social Contract: Taking on Distributional Tensions in Europe and Central Asia”, co-written by Maurizio Bussolo. It highlights the shortcomings of the current systems both for taxes and transfers and for labour-market regulation. The report sketches out the policy principles to guide a potential new social contract, principles that assume universal social assistance and insurance, labour protection, and more progressive taxation. If implemented, the report suggests, these measures would improve mobility and flexibility, helping to overcome the inequality traps and provide a broader, more just access to opportunities. For further reading, you may consider Zsolt Darvas' blog post on the EU income inequality decline, as well as a publication on the hardships of achieving the EU's poverty target by the same author. This podcast was recorded following a Bruegel event, "Towards a new social contract" on January 24th 2019.

Bruegel director Guntram Wolff is joined by senior fellow Zsolt Darvas to rake through the possibilities and probabilities inherent in a no-deal Brexit scenario, covering trade, the Irish border, citizens' rights and the EU budget. Bruegel senior fellow Zsolt Darvas joins Guntram Wolff for this Director's Cut, to discuss the economic fall-out of a no-deal Brexit. While the UK remains without an agreement on the nature of its relationship with the EU beyond March 29th 2019, the possibility of a no-deal Brexit - and its bundle of complex permutations for each sector - is still on the table. What would a WTO-based trade relationship between the EU and the UK look like in reality? Beneath surface-level tariffs, the value chains that would be broken by a hard border in the English Channel could have far-reaching consequences. And in Ireland, the more innovative border solutions remain mostly unsubstantiated, and at the very least would require a long implementation period - the time for which has long since passed. A no-deal Brexit also has implications for the EU budget. Our calculations specify the gap to be filled if the UK were to stop contributing immediately, as well as the spread of the additional burden across the EU's member countries. For further reading on this subject, consider Guntram Wolff's Policy Contribution on how well prepared the EU might be for a no-deal Brexit scenario, as well as Zsolt Darvas' full breakdown of the implications for the EU budget of the UK 'crashing out' of the union.

Bruegel fellows Reinhilde Veugelers and Simone Tagliapietra elaborate on the recent Policy Contribution they co-authored on the European automotive industry in the light of the global electric vehicle revolution. Electrification is a key trend transforming the global automotive industry, especially in the light of increased decarbonisation efforts. The speed at which the technology is being developed and the decreasing production costs make for a rather optimistic prognosis for future global deployment of electric vehicles (EVs). The automotive sector is undoubtedly an important one for the EU economy, yet it has lagged behind in terms of both EV manufacturing and deployment. In this episode of Deep Focus, Sean Gibson interviews Reinhilde Veugelers and Simone Tagliapietra, the co-authors of a recently published Policy Contribution on the EU automotive industry and the global EV revolution. European manufacturers have extensive experience, robust R&D projects and a large internal market, but can they make the switch to EVs sufficiently fast to remain competitive? To answer that question, Reinhilde and Simone outline the current picture of China's industry and point to the lessons that can be learnt from their electrification success story. While Europe cannot and should not adopt the centrally planned policy measures, a more comprehensive policy framework combining both demand- and supply-side instruments is necessary to bring the industry back up to speed. The research discussed in this episode is available in full in the Bruegel Policy Contribution, "Is the European automotive industry ready for the global electric vehicle revolution?", by Gustav Fredriksson, Alexander Roth, Simone Tagliapietra and Reinhilde Veugelers. For further reading, we recommend a blog post on low carbon technology exports by Georg Zachmann and Enrico Nano.

With 2018 drawing to a close, and the dawn of 2019 imminent, Bruegel's scholars reflect on the economic policy developments we can expect in the new year – one that brings with it the additional uncertainty of European elections. These elections will be a bellwether for the continent-wide rise of populist politics that has been a defining characteristic of the year past. The results will certainly have profound consequences for all policy debates within the EU, but also for the bloc's relationship with external partners. The shifts in the geopolitical landscape have borne a trade war, prompting renewed talk of closer ties between China and the EU, the potential internationalisation of the euro, and how the multilateral trading system might be saved, reformed, or left behind. Meanwhile, 2019 promises fierce debate of the next EU budget for 2020-2027, not entirely separate from the mooted euro-area budget and the ongoing efforts at euro-area reform and expansion. The upcoming elections will be pivotal in determining the complexion of these discussions as the year progresses. Speakers:  Maria Demertzis Jean Pisani-Ferry Francesco Papadia Elina Ribakova André Sapir Nicolas Véron Thomas Wieser Guntram Wolff

Bruegel senior scholar Zsolt Darvas speaks about his review of systematic errors in ECB forecasting, in another instalment of the Deep Focus podcast on 'The Sound of Economics' channel In this episode of the Deep Focus, Sean Gibson speaks with Bruegel senior scholar Zsolt Darvas about his research on European Central Bank forecasting. Zsolt has analysed that, over the past five years, ECB forecasts have proven to be systematically incorrect: core inflation remained broadly stable at 1% despite the stubbornly predicted increase, while the unemployment rate fell faster than predicted. Such forecast errors, which are also inconsistent with each other, raise serious doubts about the reliability of the ECB’s current forecast of accelerating core inflation, and necessitates a reflection on the inflation aim of the ECB. You may also be interested in this blog post by Zsolt Darvas, which contains charts illustrating just how erroneous the ECB's forecasting on inflation and unemployment has become in recent times.

Bruegel fellow Georg Zachmann talks through a Bruegel Blueprint he has co-authored, looking into the potential distributional effects of climate policies, in another episode of the Deep Focus series. Climate change is one of the big questions of this century, and mitigating its effects remains an enormous challenge. Decarbonisation will require a massive shift in our economies. Heating, transport, electricity and industry will have to transition to a world without fossil fuels. Agriculture and industry will have to find new ways to reduce emissions. This aim – as ambitious as it is essential – necessitates intrusive climate policies. In this episode of Deep Focus, Sean Gibson interviews Georg Zachmann, a co-author of a recently published Blueprint on distributional effects of climate policies. They untangle the complicated picture of said effects, which may vary depending on the policy tool and its design, the sector addressed and the initial socio-economic conditions in the country. Some policy tools such as carbon taxes may leave low-income households worse off, while policies such as taxes on aviation may leave them better off relative to high-income households. Others, like public investment and agriculture policies, still have unclear effects. One thing is for certain: whatever distributional effects climate policies may have, they constitute no argument against their implementation. Climate change would leave everyone worse off and disproportionately hit the poorest part of the population. It is therefore essential to design policies in a way that minimises the adverse effects on those most vulnerable. For further reading, you might consider an opinion piece by Simone Tagliapietra and Georg Zachmann on what the “gilets jaunes” movement tells us about environment and climate policies, as well as their blog post on the EU energy industry transformation.

In this episode of the Backstage series, Bruegel's Non-Resident Fellow Dirk Schoenmaker welcomes Molly Scott Cato, a Green party MEP for South West England, for a conversation on the EU's plan to transition towards sustainable finance. To achieve the EU's 2030 targets agreed in Paris, such as a 40% cut in greenhouse gas emissions, in May 2018, the Commission announced its action plan on sustainable finance. Its aims are, among others, to facilitate sustainable investment and improve the availability of information on investments carbon footprint.   Molly Scott-Cato in conversation with Dirk Schoenmaker outlines the details of the plan and elaborates on the steps necessary for the transition from brown to green finance, from vast investments into public infrastructure to the introduction of carbon tax on aviation.  While it is important to introduce dynamism to the discussion, we have to keep in mind to balance the sense of desperate urgency to avoid a systemic crisis. For further reading, you might consider a policy contribution by the same author Sustainable investing: How to do it. This podcast episode was recorded during the event How to speed up sustainable finance? on the 28 of November

Bruegel's director Guntram Wolff looks at north Africa's economic growth in the light of the region's trade agreements with the EU, welcoming Karim El Aynaoui and Uri Dadush to the Backstage series on 'The Sound of Economics'. In this episode of Backstage, Bruegel's director Guntram Wolff welcomes Uri Dadush, a non-resident scholar at Bruegel and a Senior Fellow at the OCP Policy Center, as well as Karim El Aynaoui, managing director at the OCP Policy Center. Together, they look at north Africa's economic growth in the light of the region's trade agreements with the EU. This podcast episode touches upon a Policy Contribution co-authored by Uri Dadush, which provides an economic assessment of the EU-north Africa trade agreements. While their performance is not spectacular, the agreements' common view often appears too harsh, especially bearing in mind the unfavourable domestic and international environment in which they came into force. Despite the visible misallocation of capital and insufficient job creation, some sectors in the region – such as the automotive, pharmaceutical and aeronautical industries in Morocco – are doing exceptionally well, both in terms of performance and integration. The question remains about the potential direction the region may wish to take when moving forward with its growth plan. To ensure strengthened EU-north Africa value chains, we have to move beyond the blanket-approach and instead reward the best performance. For further reading, you might consider an opinion piece on the China-Africa economic relationship written by Alicia García-Herrero, as well as a blog post by Marek Dabrowski and Yana Myachenkova on the difficult task of achieving free trade in Africa. This podcast episode was recorded during the third edition of the "Platform for Advanced & Emerging Economies Policy Dialogue", which focused on the core theme of “Policy Responses for an EU-MENA shared future”.

In this episode of the Director's cut, Bruegel's director Guntram Wolff hosts a conversation with Danièle Nouy, the first chair of the European Single Supervisory Mechanism. On the eve of the end of her mandate she traces the legacy of her five years and the prospects for the future of banking supervision in Europe.

In November 2008, the first G20 summit at the leaders' level took place amid the global financial crisis. The admittedly ambitious undertaking has since played its role in stabilising the global economy throughout the aftershocks of the crash. Today, the global order looks much different to the one in which the G20 found itself 10 years ago. How has the institution evolved and is it still equipped to create a supportive political environment for strong national and global actions? In this episode of Bruegel's Deep Focus series on 'The Sound of Economics', Suman Bery reviews the G20's performance over the past decade to identify the challenges for the future. After the initial success, he identifies a sense of complacency that has seemingly crept into the global forum. Moreover, the emerging and developing economy members have remained observably passive, which may reflect their discomfort at their perceived systemic importance despite lower levels of income. A further challenge for the G20 arises from Donald Trump assuming the US presidency in 2016, and the following tendency to drift away from multilateralism in favour of bilateral trade. The upcoming summit in Buenos Aires may be revealing in terms of just how much the G20 depends on American leadership. Another question remains about what potential the EU has as a future leader within the institution. One thing is certain: to champion a comprehensive approach, the G20 must conceive a set of rules that closer reflects the changing world. For further reading we suggest not only the Policy Contribution written by Suman Bery – 'The G20 turns ten: what’s past is prologue' – but also the blog post of Jim O'Neill and Alessio Terzi, outlining a proposal for a reformation of the G7.

This episode of the Director’s Cut features a conversation between Bruegel’s director, Guntram Wolff and Maha Yahya, the director of the Carnegie Middle East Center, where her research focuses on citizenship, pluralism, and social justice in the aftermath of the Arab uprisings. Yahya is the author of numerous publications, including most recently “Unheard Voices: What Syrian Refugees Need to Return Home” (April 2018); “The Summer of Our Discontent: Sects and Citizens in Lebanon and Iraq” (June 2017); and “Refugees and the Making of an Arab Regional Disorder” (November 2015).  For further reading, we recommend our blueprint "People on the move: migration and mobility in the European Union", written by Uuriintuya Batsaikhan, Zsolt Darvas and Inês Goncalves Raposo. Zolt Darvas also contributed to the debate on migration and refugees in Europe with two blogs on similar topics: Beyond border control, migrant integration policies must be revived and The challenge of fostering financial inclusion of refugees.

Think-tanks play a critical role in developing and promoting policy solutions, particularly in times of extreme disruption and change. However, these organisations now operate in information-rich societies where facts, evidence and credible research are often ignored – and where disinformation can gain a footing. In this edition of the Bruegel Backstage podcast series on ‘The Sound of Economics’, Bruegel secretary general Matt Dann welcomes senior thought leaders from research centres around the world, to discuss a range of strategies and best practices for transforming public policy and institutions in an era of digital and political disruptions as well as increased social and economic turbulence. Speakers Matt Dann, secretary general at Bruegel James McGann, director of the Think Tanks and Civil Societies Program at the Lauder Institute, University of Pennsylvania Milena Lazarević, programme director and co-founder of the European Policy Centre in Belgrade, Serbia Edward Kofi Anan Brown, senior director for research and policy engagements at the African Center for Economic Transformation in Ghana Credits Produced by Giuseppe Porcaro James McGann, Milena Lazarević and Edward Kofi Anan Brown participated in the Global Think Tank Summit 2018, hosted by Bruegel in Brussels.

The final act of the Brexit negotiations is upon us, with many questions still seemingly unresolved and the future relationship between the EU and the UK yet uncertain. The EU remains unyielding on compromising the integrity of the single market, with the UK struggling to propose an agreement suitable both for the EU as well as its own nuanced internal political situation. With the numbers delicately balanced in the UK’s House of Commons, whose MPs have to ratify the final deal, the subtlest shifts in positions and proposals have the potential to constitute serious stumbling blocks on the road to an agreement. Joining Bruegel’s Maria Demertzis for this Director’s Cut of ‘The Sound of Economics’ is Robin Niblett, director of the Chatham House institute in London. Together they run through what has already been agreed, what sticking points remain to be got past, and how the two sides might yet reach a deal that suits them both. For further reading, we recommend our blog post, written by Maria Demertzis and André Sapir, outlining the basic options for the future relationship of the EU and the UK, how they might be negotiated upon, and which would suit each side the best.

Bruegel senior fellow Nicolas Véron joins Sean Gibson to delve into the recent Policy Contribution on how to better the European Union anti-money laundering (AML) regime, a paper he has co-written with Joshua Kirschenbaum. The study offers a response to the evident flaws of the present system, exemplified by a series of banking scandals in multiple European Union countries, and amplified by changing geopolitics. The shortcomings of the current legal framework are identified by the authors as systemic in nature – the combination of an enforceable single market and national supervision of banks fails to meet the AML objectives. In their analysis, the authors propose a new European AML authority that would work on the basis of deep relationships with national authorities such as financial intelligence units and law enforcement agencies. For further reading, you might consider a blog post by Isabel Schnabel and Nicolas Véron discussing the need to "complete the banking union" by breaking the bank-sovereign vicious circle.

Bruegel senior fellow Zsolt Darvas welcomes Sayuri Shirai, professor at Keio University, visiting scholar at the Asian Development Bank Institute and former Member of the Policy Board of the Bank of Japan (BOJ), for a discussion of the Japanese monetary policy outlook. Japan is often portrayed in the economic circles as a country facing decades of loss, as it has long been experiencing slow economic growth and sluggish underlying inflation, despite numerous attempts at boosting it. The ambitious plan designed to do just that is known as ‘Abenomics’, a macroeconomic package advocated by Japan’s Prime Minister Shinzō Abe, based upon the ‘three arrows’ of monetary easing, fiscal stimulus and structural reforms. To evaluate the outcomes of the Abe’s policies and explore the challenges facing Japanese economy, Bruegel senior fellow Zsolt Darvas welcomes Sayuri Shirai, professor at Keio University, visiting scholar at the Asian Development bank institute and former Member of the Policy Board of the Bank of Japan. The discussion touches upon the reasons why target inflation is so hard to achieve, including the issue of stagnant wages and low labour productivity, especially in the context of Japan’s aging society. It also reflects on the Bank of Japan’s monetary easing normalisation, and whether it is feasible for it to tamper its massive government bond purchases. For further reading, you might consider a blog post by Akio Egawa on the third arrow of Abenomics – a growth strategy. We can also recommend our recent round up of economists’ opinions on the past years of Abe’s policies.

Bruegel director Guntram Wolff is joined by Tharman Shanmugaratnam, deputy prime minister of Singapore and chair of the G20 Eminent Persons Group, and Jean Pisani-Ferry, mercator senior fellow at Bruegel, for a conversation about the growth and stability challenges facing the global financial system, and how the system can be better equipped to deal with the significant and novel problems of the future. In this Director’s Cut of ‘The Sound of Economics’ Guntram Wolff is joined by Bruegel’s mercator senior fellow Jean Pisani-Ferry, and by Tharman Shanmugaratnam, deputy prime minister of Singapore and chair of the G20 Eminent Persons Group. A report from the Eminent Persons Group looks into how the global financial system can adapt to meet the sizeable challenges the future will pose, with particular reference to growth and financial stability. Small episodes of growth scarcity accumulate to make for a significant reduction worldwide, and the current model is not going to achieve the necessary uptick in growth in the next decade. Meanwhile, financial stability remains elusive, despite the positive changes made – particularly in the banking sector – since the most recent crisis. But the report from the G20 Eminent Persons Group is not without hope, and in fact sees a practical way forward by which the gaps in the current system can be plugged before new foundations are laid for the future. For further reading, we recommend Jean Pisani-Ferry’s Bruegel Policy Contribution on the question of whether we should give up on global governance in such turbulent times.

Amid the Asia-Europe Economic Forum on the fringes of the 12th ASEM Summit, Bruegel senior fellow hosts a conversation on developing global trade relations, with guests Moonsung Kang, professor as Korea University, and Michael G. Plummer, director at SAIS Europe – Johns Hopkins University, for an episode of the Bruegel Backstage series on ‘The Sound of Economics’. With Bruegel hosting the two-day Asia-Europe Economic Forum in the same week as the Asia-Europe Meeting takes place in Brussels, André Sapir takes the opportunity to talk about the quickening changes to the global trade landscape in conversation with Moonsung Kang, professor as Korea University, and Michael G. Plummer, director at SAIS Europe – Johns Hopkins University.  Led by President Donald Trump, the US has begun to challenge the multilateral trade system. Meanwhile, Europe has been busy securing free trade agreements – most recently with Japan, previously with Canada and others. With the US appearing to withdraw, and abdicate its leading role in the global trading system, Asia’s moves to improve relations with Europe make sense; the EU seems to have better appreciated the shift of the gravitational centre of world trade towards Asia. The question remains how closely Asia and the EU will agree to cooperate in the years to come, and whether the US political narrative will develop in a way that leads them back towards free trade, or even further down the road of bilateral agreements.  If you are interested in reading more on this topic, we can recommend the research paper on the EU-Japan agreement that Bruegel has submitted to the European Parliament, by André Sapir, Sonali Chowdhry and Alessio Terzi. Consider also the Bruegel Backstage podcast episode on the developing EU-China relationship in the face of rising global trade tensions.

In this episode of Deep Focus, Bruegel research fellow Simone Tagliapeitra explains how the nature of cross-Mediterranean energy relations needs to change, not only in line with new climate-change targets but also to meet the burgeoning energy demand outside Europe. Oil and gas dominated Euro-Mediterranean energy relations in the 20th century, but with the turn of the 21st century came a new focus on renewable sources. The new ventures were less successful than those of old, and both institutional and commercial plans failed to achieve the same level of fruitful cooperation. With electricity demand sky-rocketing in the Middle East, future efforts must differ from those of the past in providing much more supply for the countries outside Europe. The EU can play a key role in ensuring that both they and the countries on the southern side of the Mediterranean Sea benefit from such a spike in energy demand, with a strategy in-keeping with agreements already reached on cutting greenhouse gas emissions. In this episode of Bruegel’s Deep Focus series, Simone Tagliapietra explains how the regulatory and financial constraints on renewable energy projects can be overcome. European institutions have the capability to back the sizeable upfront investment in renewables that will propel such projects towards their long-term pay-offs. But funding must be conditional on reform that promotes private investment and removes archaic bias towards fossil fuels. The research discussed in this episode is available in full in the Bruegel Policy Brief, ‘The Euro-Mediterranean energy relationship: a fresh perspective’, by Simone Tagliapietra. This scholar has also collaborated with Bruegel senior fellow Georg Zachmann on a study of Europe’s failure to clean up its transport sector, which we recommend as further reading.

In this Director’s Cut of ‘The Sound of Economics’, Guntram Wolff welcomes Bruegel research fellow Grégory Claeys to assess how the new Italian budget proposals measure up against the existing EU fiscal rules. Italy’s new budget proposals, together with projected deficit levels for the coming years, have put the EU as well as bond-market investors on alert. In the context of Italy’s already-high ratio of public debt to GDP, the coalition government’s plan to increase the budget deficit has prompted concerns that the country risks running afoul of the EU’s fiscal framework.  What are the means by which the EU can monitor and, if need be, administer sanctions on Italy, in the event of any contravention of its fiscal rules? Bruegel director Guntram Wolff takes this opportunity to discuss all the options facing the European Commission and Council, as well as the specific details of the Italian case and the forecasts underpinning the budget’s figures, with Bruegel research fellow Grégory Claeys.  For further reading, we recommend our full break-down of the EU’s options for response to Italy’s fiscal plans, written by Grégory Claeys and Antoine Mathieu Collin.  You can also hear more on Italy’s economic and political outlook in another of our podcasts, featuring Bruegel affiliate fellow Silvia Merler in discussion with Marcello Minenna, PhD lecturer at the London Graduate School and head of quants at Consob, and Lorenzo Codogno, visiting professor at the London School of Economics and Political Science. 

Bruegel senior fellow André Sapir welcomes Tamotsu Nakamura, dean of Kobe University’s Graduate School of Economics, and Maria Åsenius, head of cabinet to European trade commissioner Cecilia Malmström, for a discussion of the EU-Japan economic partnership in the context of heightening global trade tensions. The EU and Japan have signed a landmark trade deal this summer that will create the world’s largest open economic area. The economic partnership agreement will be the biggest bilateral trade agreement the EU has ever signed, permitting not only the dropping of tariffs but also regulatory cooperation, as well as a special focus to promote the interests of SMEs.    The trade-positive nature of this agreement goes against the grain of the numerous challenges made to the global multilateral system in recent times, best represented by the tariffs and counter-tariffs imposed by the US and China upon one another. To explore how this accord suits the EU and Japan, in terms of both the domestic and international interests of each side, Bruegel senior fellow André Sapir welcomes two guests for this edition of the Bruegel Backstage series – Tamotsu Nakamura, dean of Kobe University’s Graduate School of Economics, and Maria Åsenius, head of cabinet to European trade commissioner Cecilia Malmström.    If you are interested in reading more on this topic, we can recommend the research paper on the EU-Japan agreement that Bruegel has submitted to the European Parliament, by André Sapir, Sonali Chowdhry and Alessio Terzi.   You might also consider our previous podcast on EU’s options in the event of global trade war, featuring Bruegel director Guntram Wolff with Bernd Lange, member of the European Parliament and chair of the Committee on International Trade.   Tamotsu Nakamura and Maria Åsenius participated in one session of the Bruegel conference on international trade and the EU-Japan agreement.

Bruegel deputy director Maria Demertzis welcomes Financial Times commentator Martin Sandbu to explore the journey taken by the field of economics since the financial crisis struck 10 years ago, and discusses what new tools economics has now that it didn’t have then. In this Director’s Cut of ‘The Sound of Economics’, we trace the journey upon which the field of economics has embarked since the financial crisis, what lessons it has learnt and what it can do differently now with the benefit of hindsight. Economists and financial specialists failed to identify the burgeoning threat of financial imbalances, excessive risk-taking and housing bubbles that led to the crisis that first broke a decade ago. Can economics provide answers to the right questions – and in good time? Bruegel deputy director Maria Demertzis is joined by Martin Sandbu of the Financial Times to look at what new tools and approaches can help economists make a difference in the event that any similar such crisis strikes again. For further consideration we recommend another edition of the Director’s Cut podcast series, featuring a discussion between Maria Demertzis, Nicola Viegi – South African Reserve Bank professor of monetary economics at the University of Pretoria – and Frank Smets – director general of economics at the European Central Bank – on the topic of macroeconomics’ post-crisis reinvention and the flourishing of new models. FURTHER READING Rebuilding macroeconomics: Initial reflections on a major theory project The DSGE Model Quarrel (Again) Tales from a crisis: diverging narratives of the euro area

Guntram Wolff welcomes Bruegel affiliate fellow Silvia Merler to evaluate the Italian government’s planned budget for 2019, in this Director’s Cut of ‘The Sound of Economics’ Six months after its election, Italy’s coalition government reached an agreement on public spending. The key tenets of its first budget include a spending increase that will drive the budget deficit to 2.4% of GDP, tax cuts, a proposal for a minimal income for the unemployed, as well as cancellation of the plans to increase retirement ages. Though the new deficit budget fits into the EU’s limit of 3%, Italy’s debt of €2.3 trillion makes for a difficult case to increase spending. The news comes as a blow for the finance minister Giovanni Tria, who pushed for a more fiscally responsible budget, trying to limit budget deficit to 1.6% of GDP. The decision also received disapproval from Brussels, with EU Economics Commissioner Pierre Moscovici criticising Italy for “flouting the rules” and disregarding its large debt.  To discuss the potential consequences, Guntram Wolff welcomes Bruegel affiliate fellow Silvia Merler to this Director’s Cut of ‘The Sound of Economics’. For further reading, we recommend Guntram Wolff’s opinion piece on how to overcome the hurdles obstructing Italian growth, as well as Silvia Merler’s note comparing the capital flight from Italy in 2018 with similar such scenarios witnessed in 2011 and 2016.

Bruegel senior fellow Scott Marcus welcomes former European Regulators Group chairman Kip Meek to explore the consequences of Brexit for ICT policy-making in Europe. The divorce of the UK from the European Union will have far-reaching consequences for all sectors, but what will be the balance of continuity and disruption in the sphere of ICT regulation? With the terms of separation and the nature of the UK’s future relationship with the EU yet to be finalised, there are still many variables that could affect the final outlook. Nevertheless, we can explore the industry’s broader regulatory inclinations, as well as the areas that are most vulnerable to any serious disruption.  Reflecting on the most essential problems that Brexit will pose to the ICT industry, Bruegel senior fellow J. Scott Marcus is joined in conversation by Kip Meek, former chairman of the European Regulators Group.  For further reading, we recommend a blog post written by Scott Marcus on the question of whether mobile roaming arrangements can be maintained between the UK and EU post-Brexit.  Kip Meek appeared as a panellist at an International telecommunications Society conference in Trento, Italy in August 2018, in a session moderated by Scott Marcus.

Following a conference at Bruegel, at a critical moment for the global economic system, Bruegel director Guntram Wolff is joined by Zhang Weiwei, director at The China Institute of Fudan University, together with Bruegel senior fellow Alicia García-Herrero, for a discussion of EU-China trade relations. With the United States pursuing a policy of imposing trade tariffs on its international partners, the geopolitical landscape is poised for change. What room is there, then, for closer economic ties between China and Europe in a world where a multilateral trading system cannot be taken for granted? There are many points, political and economic, on which European and Chinese approaches diverge; nevertheless, there remains the opportunity to focus on common ground, establish a more mutually beneficial relationship, while also standing up for the multilateral system. US trade tariffs have driven China and Europe together more quickly than they might have met otherwise. How prepared China and Europe actually are for building closer ties remains an essential debate. This conversation assesses what problems still prevent a smoother integration of interests in both the Chinese and the European spheres. We invite you to peruse the audio and video recordings of our sessions from the event, ‘Perils and potential: China-US-EU trade relations’, where Bruegel welcomed a number of Chinese and EU trade experts. For further reading, consider the Bruegel research paper looking into European and Chinese trade competition in Latin America, written by Alicia García-Herrero with Thibault Marbach and Jianwei Xu. Also note our blog post analysing data on bilateral trade, services, investment and protectionism between Asia, Europe and the US in recent years, determining whether the nature of the global economy is Transatlantic, Transpacific or Eurasian.

Immigration is one of the most contentious policy matters currently facing the EU. In this Director’s Cut of ‘The Sound of Economics’ Bruegel director Guntram Wolff welcomes Ana Palacio, member of the Spanish council of state and former foreign affairs minister, as well as Bruegel visiting fellow Elina Ribakova for a constructive discussion as to which approaches will yield the best results. Joining Bruegel director Guntram Wolff for this Director’s Cut of ‘The Sound of Economics’ is Ana Palacio, member of the Spanish council of state and former foreign affairs minister, and Elina Ribakova, Bruegel visiting fellow at Bruegel, to discuss the exact nature of the migration challenges currently troubling the EU.  Previous agreement upon the creation of disembarkation centres on the north African coast constitutes only a policy step rather than a resolution. Still very little has been done to draw up a common European migration policy and consensus remains difficult while Member States continue to operate their own independent, broadly disparate policies. Separating the concept of migration and refugees is also key to improving the general understanding of the challenges; likewise, being clear that the number of arrivals in the EU is now significantly lower than in 2015.  There is also progress to be made in accepting that integration is a two-way street, and that legitimate concerns should not be written off without a hearing.  For further reading, consider the Bruegel Blueprint publication ‘People on the move: migration and mobility in the European Union’, which contains a wealth of research on the various challenges that immigration poses to Europe’s policymakers.  Also recommended is this blog post by Zsolt Darvas which illustrates that Europe’s population growth would now be negative if it were not for the inflow of immigrants.

In the first episode of the new Backstage series on ‘The Sound of Economics’, Bruegel senior fellow Nicolas Véron takes time out from the Bruegel Annual Meetings to discuss the immediate future of European banking and capital markets union with Jörg Kukies, state secretary at the German ministry of finance. The euro-area reform agenda hopes to prevent the repetition of problems that arose during the crisis at the beginning of this decade – to provide better protection for taxpayers and depositors and to avoid any perception of privilege for the banks of one country over those of another. Although there appears to be consensus on the necessity of completing banking union, the question remains open as to which elements are still missing.  On the matter of capital markets union (CMU), though the current European Commission has given great emphasis to progressing with the project, we are still quite far from consensus on the exact shape that a more integrated supervisory framework should take. This discussion gets into the details of the immediate challenges and the particular sticking points in negotiations over banking and capital markets union. For further reading, consider the Policy Contribution on making a reality of Europe’s capital markets union, co-written by Nicolas Véron, André Sapir and Guntram Wolff. Meanwhile, in a previous edition of the Director’s Cut podcast, Nicolas Véron discusses the importance of developing deposit insurance as a part of Europe’s broader banking union aspirations.

Bruegel senior fellow Zsolt Darvas joins Sean Gibson on ‘The Sound of Economics’ to expound on the themes of a Policy Contribution on the macroeconomic implications of healthcare systems, which he has co-written with Nicolas Moës, Yana Myachenkova and David Pichler. This episode is the first in a new Bruegel podcast series, ‘Deep Focus’, looking specifically at Bruegel research and elaborating on the insights contained therein, in conversation with the authors.  The effects that healthcare systems can impose upon economies are pronounced and far-reaching. The health sector alone accounts for a significant portion of output and employment in the EU, even before we look at the pharmaceutical companies conducting research and development towards healthcare. From a fiscal point of view, health is one of the most expensive items on a government’s list of expenses.  In this analysis, the scholars measured the efficiency of each EU healthcare system – and of several from beyond the EU’s borders. The results illustrate that improving healthcare outcomes is not as simple as investing more and more money in the system. In this podcast, we discuss some of the areas where real differences can be made both to the health of the general public and to the cost incumbent upon governments. For further reading, consider our blog post digging into the details of the ongoing lack of German public investment, written by Alexander Roth and Guntram Wolff.

Bruegel director Guntram Wolff welcomes Brad Setser, senior fellow at the Council on Foreign Relations, and Jean Pisani-Ferry, mercator senior fellow at Bruegel, to discuss the deterioration of Turkey's economy. Although a recent souring of relations with the US has provided the immediate prompt for Turkey's current crisis, the country's underlying economic malaise is more deeply rooted.  Headlines have tracked the plummeting value of the lira, while the trust of external investors has been challenged by recent policy decisions. Though Turkey's case bears some of the hallmarks of a textbook emerging-market meltdown, there are key divergences. Meanwhile, President Erdogan's previous refutation of IMF policy recommendation does not bode well for potential assistance in the event that Turkey needs help brokering extension agreements with its creditors.  In conversation with Brad Setser, senior fellow at the Council on Foreign Relations, and Jean Pisani-Ferry, Mercator senior fellow at Bruegel, Guntram Wolff assesses not only the nature of the crisis in Turkey but how the country might navigate its way back to safer economic waters. For further reading, consider the recent blog post written by Grégory Claeys and Guntram Wolff discussing how the EU might respond to the currency crisis unfolding in Turkey, including options for the EU to help Turkey in the absence of any agreed IMF assistance programme.

More than two months after the Italian elections and its turbulent political negotiations, Italy finally has a new government. While this has had a calming effect on the financial markets, Italy's medium and long term economic outlook is yet to be determined. Bruegel affiliate fellow, Silvia Merler, is joined by Marcello Minenna, PhD lecturer at the London Graduate School and Head of Quants at Consob, and Lorenzo Codogno, LSE visiting professor, to examine the different ways the country can move forward. Starting off this Sound of Economics, Silvia examines the new government's policy priorities and discusses the message of uncertainty it sends to financial markets and investors. Indeed, the way in which the government will finance its promises is still uncertain, thus leaving room for unpredictability. In the short and medium term, Lorenzo puts forward the proposal that the new government should tread carefully by introducing policies gradually in order to maintain fiscal stability and discipline. The three guests address the widely discussed topic of Italy's euroscepticism. Italy's relatively stagnant economic growth over multiple generations is seen as a key factor in the country's present-day skepticism towards the single currency. They agree that, although an 'Italexit' is an unlikely scenario, it is nonetheless an important one to consider. Moreover, Marcello points out that Italy's situation is also a testament to ongoing issues at the European level, requiring a reform of the eurozone's policies and a tough look at its current functioning.

Bruegel director Guntram Wolff and Ashoka Mody – visiting professor in international economic policy at Princeton University – explore subjects addressed in the latter’s latest book, Euro tragedy: a drama in nine acts. Kicking off this Director’s Cut of the 'The Sound of Economics', the two explore the historical development behind the EU's creation. Ashoka Mody argues that the adoption of the euro as a single currency has exacerbated economic divergences between EU Member States as some do not have the institutional maturity or capabilities to fully adopt monetary policy measures. Guntram Wolff points out that in the view of Helmut Kohl, the adoption of the euro was a means to further reunite the continent and support peace-building. They also discuss the role of social democracy in the drama on the future of Europe. The conversation from this episode explores the development of the EU from its early history until its present-day situation. Member States’ commitments to the European project from a political and economic point of view are touched upon, with a particular focus on Germany's role within the whole debate. For a more in-depth discussion on the subject, be sure to play back the full recording of the Bruegel event chaired by Maria Demertzis and featuring Ashoka Mody and Guntram Wolff.

According to Annamaria Lusadi, academic director at the Global Financial Literacy Excellence Center, financial literacy requires both a knowledge of financial concepts and the confidence to make effective financial decisions in order to maximise one's well-being. Financial literacy is not only limited to knowledge of monetary calculations, but is also measured by the extent to which individuals understand their financial rights and obligations, in addition to their ability to educate themselves on financial matters. People are increasingly expected to have the appropriate skills to manage their own financial decisions; however, the rapidly shifting financial environment often proves to be extremely complex to understand and, thus, leaves many with poor financial literacy abilities. The young, the elderly, women, and people with low-education levels are particularly susceptible to the negatives effects of low financial literacy. The consequences of the situation are harmful both for the individual and at a national level. Just as reading and writing skills are a part of the educational curriculum, Annamaria Lusadi believes that financial literacy courses should now be a requisite part of school programmes. Moreover, the adult population should also have access to workplace and public financial education programmes. All in all, good financial literacy skills have long-term beneficial effects; sound financial decisions take today's resources and invest them in the future. As a result, policy-makers should redouble their efforts in this area. Maria Demertzis has co-authored a Bruegel Policy Contribution with Uuriintuya Batsaikhan on financial literacy and inclusive growth in the European Union. Annamaria Lusardi previously made a presentation at the Bruegel event, ‘The importance of being financially literate’.

Paul Tucker, former deputy governor of the Bank of England, joins Bruegel director Guntram Wolff to discuss the thesis of his new book, as well as the current tensions within current models of central banking governance. On the agenda is the contention that there is, and even should be, a limit to the level of responsibility that a central bank can reasonably be expected to shoulder. Some decisions have such far-reaching consequences that we might prefer they be made by elected, rather than appointed, officials. Paul Tucker presented his book in an event at Bruegel in May 2018, with Bruegel deputy director Maria Demertzis hosting a debate between Paul Tucker, Joanne Kellermann, former member of the Single Resolution Board, and Jean Pisani-Ferry, mercator senior fellow at Bruegel. For further reading, consider 'Central Banking in Turbulent Times' - a book co-written by Bruegel senior fellow Francesco Papadia with Tuomas Valimaki, launched at a Bruegel event in April 2018. Additionally, we recommend reading Silvia Merler's collation of economists' opinions on the current state of central banking in an age of populist politics.

Technological advancements continue to drive change in every industry. In a recent working paper co-written with Francesco Chiacchio and David Pichler, Bruegel research fellow Georgios Petropoulos has explored the impact of the increasing number of robots on employment and wages in Europe. The introduction of robots constitutes only one industrial advance among many, and each automated technology has different impacts on employment. The impacts across social strata can also be disparate. In this episode of ‘The Sound of Economics’, Georgios Petropoulos discusses the findings of his study, which focuses on six EU countries (Finland, France, Germany, Italy, Spain, Sweden) that account for 85% of robots in the EU market. Specifically this work sought to answer the question of whether robots have a positive or negative effect on EU employment and wages, and to place its conclusions in the context of other studies of automated technologies and their consequences for labour. The research pertinent to this podcast can be found in our publication: ‘The impact of industrial robots on EU employment and wages: A local labour market approach’. Meanwhile, Georgios Petropoulos has previously detailed the specifics of the growing presence of robots in EU industries in a Bruegel blog post. He has also written an article questioning whether we understand the impact of artificial intelligence on employment. Elsewhere, a number of Bruegel scholars have collaborated on our Blueprint book of research: ‘Remaking Europe: the new manufacturing as an engine for growth’. This comprehensive study looks at how well European firms are responding to new opportunities for growth, and in which global value chains they are developing new activities.

The coalition agreement between Italy’s Five Star Movement and the League puts the country’s new government on a potential collision course with the European Union, and has prompted fears that the country could nosedive out of the euro zone. Markets have already born witness to investor nervousness over the coalition’s proposed agenda, and the new government’s priorities run counter to the prevailing fiscal and monetary policies of the euro area. If Italy were to follow through on its new plans for spending, the expected reaction in among bond-buyers would make it very difficult for Italy to finance its already-significant amount of public debt. Any discussion of a possible default necessarily involves the euro area – as Bruegel’s database of sovereign bond holdings illustrates. Just how exposed are the other members of the currency bloc, and what paths might be taken in order to avert a crisis? In this week’s Director’s Cut, Bruegel senior fellow Francesco Papadia joins Guntram Wolff to assess the problems that currently occupy both Italy and the EU. For further reading, note Guntram Wolff’s article on why Europe needs a strong Italy, whoever is leading the government. Also consider looking at Jean Pisani-Ferry’s opinion piece on the opportunity that such political upheaval might offer Italy to overcome its longstanding internal issues.