German macro: how it's different and why that matters. EPC Discussion Paper, May 2016

Do the macroeconomics of the German political establishment really differ from standard western macroeconomics? That question was the starting point for the seminar on ‘German macro: How it’s Different and Why that Matters’, which was held at Heriot-Watt University in December 2015, with financial support from the Scottish Institute for Research in Economics (SIRE) and the Money, Macro & Finance Research Group (MMF). This ebook, edited by George Bratsiotis and David Cobham, is the result of that exercise; six of the papers were presented at the seminar in earlier versions, and the editors sought some additional papers to complete the range of perspectives offered. The authors all sought out to discover whether or not there is something unique about German macroeconomics, and in what ways it differs from standard western macroeconomics; is it true that the former neglects demand management (although it may be quite interventionist in other ways), rejects debt relief and emphasises structural reform designed to improve competitiveness as the (only) key to economic growth? How much of whatever difference exists is due to a well worked out set of ideas in the form of Ordoliberalism? In what way does it relate to Germany’s own experiences in different periods? And how far is this the result of political preferences and how much do the idiosyncrasies of these German views matter, for the development of the Eurozone and indeed the health of the German economy?

The EU’s Self-Defeating Aid Policy towards Palestine. CEPS Policy Brief No. 343/May 2016

Motivated by the dual aims of strengthening the Middle East Peace Process and contributing to Palestinian state-building, the European Union and its member states have been the biggest donors of financial assistance to the Palestinians. This CEPS Policy Brief finds, however, that these efforts have not achieved the desired change, as the EU failed to develop a coherent strategy to address Israel’s violations of international humanitarian law and it has accepted practices that undermine its political objectives. Hence, the author, Brigitte Herremans, argues that the aid has not contributed to a strong Palestinian government that can contribute to the security of both Palestinian and Israeli civilians. She calls upon the EU and its member states to take more measures to ensure that aid is received by people in need and that illegal practices on the part of Israel do not hamper its effectiveness.