Monetary policy and the over-investment cycle: China as an extreme case. CEPS Commentary, 27 August 2015

Against the background of the severe turbulence that is hitting global stock markets, Daniel Gros examines the looming slowdown in the Chinese economy in this CEPS Commentary, which he attributes to an underlying ‘real’ domestic investment/savings imbalance. Given the magnitude of this imbalance, Gros thinks it is unlikely to be solved by monetary policy and that the best that can be hoped for is that the central banks will manage to ‘paper over’ some of the unavoidable symptoms in credit markets.

Between continuation and adaptation: The Baltic states’ security policy and armed forces. OSW COMMENTARY 190/23.11.2015

The Baltic states have responded to the annexation of Crimea and the increased Russian military activity in the Nordic and Baltic region by taking measures to strengthen their own military potential. At the same time, they have intensified efforts to have the USA and NATO step up their military presence on their respective territories. Changes concerning the security policies and the armed forces of Lithuania, Latvia and Estonia have included increases in defence spending, the number of soldiers and members of volunteer Territorial Defence Forces, speeding up modernisation programmes, and – in the case of Lithuania – the reintroduction of conscription. In the coming years the Baltic states will focus on developing those of their military capabilities directly related to the defence of the country’s territory. However, Lithuania, Latvia and Estonia will not stop participating in the foreign missions of NATO, which is the guarantor of their security. The extent to which these plans can be implemented will depend primarily on the economic and demographic situations of Lithuania, Latvia and Estonia.