Team
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ifo Viewpoint 224: Central Bank Swerving from Its Path
The Executive Board of the European Central Bank (ECB) wants to make monetary policy “greener.” Hardly a week goes by without the topic being promoted by one of the board members. In addition to the visible effort to make the traditionally dry seeming monetary policy appear practically helpful and close to the people, the ECB’s activities in the matter itself amount to a further significant expansion of its competencies. This involves, first, independently assessing the environmental friendliness of projects financed by corporate bonds; and second, giving preference to positively rated projects in various securities transactions.
ifo Viewpoints 225: Europe in Competition with China and the US: More Strategic Autonomy, but Not More Autarky!
Europe’s share of the global economy may be declining, but the EU remains a major economic power with strong ties to the rest of the world. If its pursuit of strategic autonomy devolves into a push for protectionism or even autarky, it risks losing that status – and becoming more vulnerable than ever. When it comes to economic growth, Europe has been lagging behind the world’s other major economic powers – the United States and China – for some time. No surprise, then, that the old continent’s relative weight in the global economy is declining fast. How vulnerable does this leave the European Union – and what should EU leaders do about it? When the Iron Curtain fell in 1989, the countries that comprise today’s EU, plus the United Kingdom, accounted for 27.8% of global GDP (in terms of purchasing power parity). For the US, that share was 22.2%. China, with a share of 4%, still hardly registered as an economic power. Thirty years later, the EU, together with the UK, accounted for 16% of global output, still slightly ahead of America’s 15%. The big shift was in China’s position, which had surpassed its Western counterparts with a share of 18.3%.