Despite the experience of the ongoing sovereign debt crisis, European banks continue to hold large amounts of bonds from their home governments. This ties the fates of the sovereign and the banks together, leading to the disruptive self-reinforcing feedback loops that brought the euro area to...

Two of the four macroeconomic adjustment programmes, Portugal and Ireland’s, can be considered a success in the sense that the initial expectations in terms of adjustment, both fiscal and external, were broadly fulfilled. A rebound based on exports has taken hold in these two countries, but a...

The theme of this contribution is how Europe will evolve over the next decade. The key message is that over this decade Europe will be busy digesting the 12 members that joined in 2004 and 2007. Digesting in the context means that the new members will only gradually be incorporated and...