@andrewwatteu
General Director, European Trade Union Institute @etui.bsky.social Formerly www.imk-boeckler.de EU economic governance, comparative political economy, European integration, socio-ecological transition, wage bargaining Deutschland-Versteher Vietnam
www.theguardian.com/business/202...
This is a big deal. $130bn, plus interest, is ~half a % point of GDP. That wouldnt always matter so much, but given the level and trajectory of US govt deficits and debt there will be a noticeable additional burden on bond markets.
And don't mention the war.
The Austrian finance minister shows how it can and should be done. Picks up arguments against inheritance tax. And shows, in tweet length, why each is wrong.
No overdramatising. No finger pointing or badmouthing. Facts. Arguments in simple language. Clear normative orientation.
Making your budget match your priorities.
So important.
Monitoring and early interventions to limit hikes in strategic prices before they spread through the economy and into nominal wages are vital, as @isabellamweber.bsky.social has shown.
Wage policy must tread a fine line, maintaining incomes and aggregate demand, avoiding perpetuating the shock.
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giftarticle.ft.com/giftarticle/...
With energy and fertiliser prices sharply up and food set to follow, a renewed inflationary shock is imminent. Policymakers must learn from the last one.
Interest rate hikes are hugely costly.
Incomes of vulnerable households should be protected.
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The old debate is conclusively resolved. Nature wins over nurture. The investment genius of the father is passed on through his genes to the son.
What other explanation could there possibly be?
🙃
www.socialeurope.eu/european-sov...
In parallel with developing strategic autonomy on the world stage, Europe needs to develop further its economic and social model, building on its strengths.
Update
Some interesting reflections on the prospects in Iran and the implications for Europe, from the always-insightful @guillaumeduval.bsky.social
institutdelors.eu/en/publicati...
Update
It gets even worse.
Now EU High Representative Kallas issues a statement that doesn't even mention the United States or Israel.
bsky.app/profile/toby...
EU strategic autonomy?
Defending the rules-based order?
Not the most important when people are dying, but higher oil prices & freight costs will push up inflation again. Low energy & import-price inflation has helped Europe's tepid economic recovery, creating space for real wage increases & low interest rates.
bsky.app/profile/econ...
Tailwind->headwind
This is highly unlikely to work.The regime will circle the wagons and can justify repression. Civilian casualties like the atrocious killing of more than 100 primary schoolgirls will delegitimise opposition activity.
EU leaders should be clearly distancing themselves from the adventurism of Trump and Netanjahu, two politicians desperately trying to avoid electoral defeat.
There seems to be no plan except deploying air power and calling on the Iranian opposition to take over.
Here is the DE FR UK statement
www.bundesregierung.de/breg-de/aktu...
Apart from international law, the leaders are also ignoring domestic US criticism of Trump for bypassing Congress.
By failing to call for an immediate cessation of hostilities and openly backing Trump and Netahjahu's attack on Iran, European leaders (von der Leyen, Merz, Macron, Starmer) undermine the case for international solidarity with Ukraine.
German wages rose last year by 4.2% in nominal and 1.9% in real terms, as inflation has subsided. This follows 2.9% in 2024. This will underpin consumption & growth in DE and EU this year.
The other side of the €coin: the wage level is only back to its 2019 pre-covid level.
bsky.app/profile/tage...
bsky.app/profile/robi...
The explosion of German (not just military) exports to countries neighbouring Russia after Russia's invasion of Ukraine paints a similar picture. #re-routing
Whereby here the recent decline is quite limited in most cases.
#econsky
An interesting paper coming out on the 4th anniversary of the Russian invasion.
The title is a bit misleading, though, the evidence the authors have collated shows that military sanctions have been very (albeit it not 100%) successful for the last two years. Evasion a major problem 2022 & 23.
Yes. But contrary to what the title and subtitles suggest, looking at fig. 1, it seems sanctions have been very (albeit not completely) effective since around the start of 2024, two years ago. Clearly there were loopholes before that, and military exports "only" fell to around 1/5 of former levels.
Countdown clock on the Brussels town hall in the colours of Ukraine. Premonition of War.
Four long years ago we awoke to news that war in Europe had started.
💔
Brussels stands with Ukraine.
Presumably this is a mix of genuine substitution and redirection/transiting.
Lots of uncertainty. But the new legal base covers him for 150 days.
So far the impact of tariffs on EU exports to the US has been limited, partly bc EU compeitors were harder hit still. But now, in relative terms, EU exporters will suffer a considerable disadvantage, meaning additional pain for some exporters.
giftarticle.ft.com/giftarticle/...
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Politically the US Supreme Court striking down Trump's IEEPA tariffs is a big deal.
Yet Trump's decision to impose a global 15% tariff, using a different legal base, means an even higher tariff wall for EU exporters. Meanwhile, competitors incl China & benefit from cuts.
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Maybe AI is a superior form of intelligence, after all 🤔
There is a case for simplifying EU legislation. But it's not key to gaining competitiveness. And the so-called omnibus process does not allow proper consideration of the costs and benefits of regulation.
Now employers want an omnibus process for important elements of EU social & employment leg'n.
🚨
A plausible explanation is that the AI capex boom has overdetermined the negative impact of Trump's policies (some of which, like the attack on educational institutions and renewables will only impact in the longer run).
Flying on the one engine of AI is, of course, a vulnerability.
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With tariff turmoil and government shutdown, US GDP figures have been hard to interpret. The best guess is that the US economy is spluttering along at a respectable rate, policy shocks notwithstanding.
Certainly not Trump's "best ever" economy. But not the stagflation I & others had expected.
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probably both, indeed.
Suggested interpretation: The tariff chaos last year explains the "economic emergency chatter". As it recedes (and the damage of the tariffs is apparently more limited than feared), sentiment is improving again.
Also: the emergency chatter comes in handy for those pushing a deregulation agenda.
I scream!