The Effects of Ultra-Loose Monetary Policies on Inequality. Bruegel Policy Contribution Issue 2015/09, June 2015

Highlights • Low interest rates, asset purchases and other accommodative monetary policy measures tend to increase asset prices and thereby benefit the wealthier segments of society, at least in the short-term, given that asset holdings are mainly concentrated among richest households. • Such policies also support employment, economic activity, incomes and inflation, which can benefit the poor and middle-class, which have incomes more dependent on employment and which tend to spend a large share of their income on debt service. • Monetary policy should focus on its mandate, while fiscal and social policies should address widening inequalities by revising the national social redistribution systems for improved efficiency, intergenerational equity and fair burden sharing between the wealthy and poor.

The limitations of policy coordination in the euro area under the European Semester. Bruegel Policy Contribution 2015/19, November 2015

The European Semester is a yearly process of the European Union to improve economic policy coordination and ensure the implementation of the EU’s economic rules. Each Semester concludes with recommendations for the euro area as a whole and for each EU member state. We show that implementation of recommendations was poor at the beginning of the Semester in 2011, and has deteriorated since. The European Semester is not particularly effective at enforcing even the EU’s fiscal and macroeconomic imbalance rules. We find that euro-area recommendations with tangible economic goals are not well reflected in the recommendations issued to member states. Finally, we review various proposals to improve the efficiency of the European Semester and conclude that while certain steps could be helpful, policy coordination will likely continue to have major limitations.

Belarus at a crossroads. Bruegel Policy Contribution Issue 2016/02 January 2016

Highlights: • Since the collapse of the Soviet Union in 1991, Belarus has maintained a largely non-market economic system. This did not prevent rapid growth of its economy over a sustained period up to 2011. However, the period of economic growth in Belarus seems to be over.The factors that underpinned Belarus’s growth, mainly the beneficial external environment, have gradually disappeared. As a result, the country is confronted by the need to start the far-reaching programme of market-oriented economic reforms and macroeconomic stabilisation which it tried to avoid for so long. Reform will not be easy, economically and politically. • The potential hardship facing Belarus could be at least partly cushioned by external assistance, in the first instance from the International Monetary Fund and the World Bank. However, the IMF has relatively fresh memories of the failure of its 2009-10 Stand-By Arrangement (SBA) with Belarus, which provided substantial balance-of payments support, but which was derailed by its too-narrow focus on monetary and fiscal quantitative performance criteria, and by insufficient reform commitment on the Belarusian side. Other donors, such as the European Union, might be reluctant to offer assistance as long as Belarus does not improve its poor human rights record and start some political reforms.

One market, two monies: the European Union and the United Kingdom. Bruegel Policy Brief Issue 2016/01 January 2016

Access to the single market is one of the core benefits of the United Kingdom’s membership of the European Union. A vote to leave the EU would trigger difficult negotiations on continued access to that market. However, the single market is not static. One of the drivers of change is the necessary reforms to strengthen the euro. Such reforms would not only affect the euro’s fiscal and political governance. They would also have an impact on the single market, in particular in the areas of banking, capital markets and labour markets. This is bound to affect the UK, whether it remains in the EU or not.

Maastricht 2.0 - Proposed reform of EU sovereign debt rules. Policy Brief #2012/05

The European Union’s regulations governing sovereign debt are based on the principle of equal treatment of all member states. The recommendations we make here concerning changes in European Union sovereign-debt reduction rules take account of national particularities, but are by no means arbitrary in nature. According to the calculations we present here, such reformed regulations would do far more to promote economic growth than would be the case under the Fiscal Compact’s European debt brake. By 2030, real gains in growth will amount to more than 450 billion euros more than the outcome that would presumably be obtained under the European debt brake.

Sustainability and solidarity – basic ideas of new financial structures. Policy Brief #2012/07

Federal financial structures which include fiscal equalization between the states are and will remain to be indispensable. Such structures are required to equalize the significant regional economic differences which exist within the federal republic and to ensure sufficient funding for the responsibilities of the public sector across the nation. The current federal financial structures have a number of structural flaws which regard both the criteria for tax distribution, the design of the debt brake and the role of municipalities. The financial structures will have to be revised beginning in 2020. The objective is to consolidate in the long term the budgets of federation, state and municipal governments and to safe-guard a modern welfare state.

Social Policy Reforms in the EU: A Cross-national Comparison. Social Inclusion Monitor Europe (SIM) – Reform Barometer. Pilot Study

European countries are losing momentum for social policy reforms: The results of the SIM Europe Index report on social justice, published in September 2014, suggested a growing social divide among the member states. Assessing six policy areas of social inclusion, the data revealed the deteriorating social situation since 2009 across the EU. The report stressed, in particular, the difficulties southern EU member states were having in coping with the effects of the financial and economic crisis. This second report, the SIM Europe Reform Barometer, takes up these results and delivers two tasks: to impartially assess the extent of problem awareness of governments, and to ask whether they have enacted concrete social policy initiatives to tackle these challenges and to counterbalance the growing divide. Southern European member states, especially, did not or have not been able to pursue reforms to limit their withering levels of a socially inclusive society. In almost all key dimensions of social inclusion, those member states most affected by the implications of the protracted economic and fiscal crisis in the EU have been least able to confine the ongoing ‘internal devaluation’ in terms of socially balanced governmental activity. By contrast, some northern member states have legislated acts which seem well-suited to at least stabilise or even increase their level of social inclusion.