Flashlight Europe N°2–September 2014: Is It Better To Be Alone Than Lonely Together? Scotland Is Voting On Whether Or Not To Become Independent

On 18 September 2014 the Scots are voting on whether or not to sever their ties with the UK. And the pro-independence camp is catching up fast. A survey conducted at the beginning of the month revealed that for the first time 51 percent of the Scottish electorate say that they will be casting a Yes vote, i.e. that they are in favour of independence. The outcome is now in the hands of the undecided voters, who are currently being heavily courted by the various parties. If the Scots vote in favour of independence, it is bound to cast doubt on the future of the government of David Cameron, the Conservative Party leader. Who is fighting on which side? What are the arguments? And what will happen if the Scots decide to opt out of the United Kingdom? Here are some of the things that are a distinct possibility.

Investment as the key to recovery in the euro area? CEPS Policy Brief No. 326, 18 November 2014

Investment has declined in the euro area since the start of the economic and financial crisis, but this does not mean that there is necessarily an ‘investment gap’, explains Daniel Gros in this CEPS Policy Brief. Investment was probably above a sustainable level due to the credit boom before 2007. Moreover, the fall in the euro area’s potential growth − due to a combination of a sharp demographic slowdown and lower total factor productivity (TFP) growth − should also lead to a permanently lower investment rate. Increasing the investment rate might thus be the wrong target for economic policy. The author advises that the aim of economic policy should be to increase consumption, rather than investment overall. Increasing infrastructure investment might be justified in some member countries, but it is not a ‘free lunch’ when efficiency levels are low, which seems to be the case in some of the financially stressed euro area countries.