• The ECB, the ESM and Stability Bonds: a way out of the crisis. Note for the European Parliament's Commitee on Economic and Monetary Affairs, Directorate General for Internal Policies, Policy Departement A: Economic and scientific policies, Part of the compilation PE 464.463 for the Monetary Dialogue. December 2011.
  
  Abstract: The Euro Area is on the brink of a melt down unless urgent action is taken. The paper looks at the constraints on the EFSF and for ECB interventions, which limit the capacity to bail out Member States. The issue of Eurobonds could solve some of these issues, although the Commission’ Stability Bonds may take to long for their realisation. A transition proposal is made, that would give both the EFSF and the ECB a constructive role in overcoming the crisis.
  
  
• European Monetary Policy under Jean-Claude Trichet. Note for the European Parliament, Directorate General for Internal Policies, Policy Departement A: Economic and scientific policies, Economic and Monetary Affairs. September 2011. (Download in PDF).
  
  Abstract: The change of the ECB’s president is a moment to take stock. Since January 1999, the ECB has gone through three major phases: foundation, consolidation and financial crisis. Through all this period it has achieved its primary and secondary objectives with remarkable precision. We estimate a reaction function and find that under Trichet, increased credibility and a more stable macroeconomic environment allowed monetary policy to shift focus in favour of employment and financial stability. Handling the financial crisis was Trichet’s master piece, although member states have not made it easier for the bank. We conclude by saying: "Bravo et merci, Monsieur Trichet! And Buona fortuna, Presidente Draghi!"
  
  
• Debt Restructuring is No Free Lunch. Note for the European Parliament, Directorate General for Internal Policies, Policy Departement A: Economic and scientific policies, Economic and Monetary Affairs. June 2011 (Part of the compilation PE 464.418 for the Monetary Dialogue). Download in PDF.
  
  Abstract: This paper emphasises the cost of sovereign defaults and voluntary debt restructuring. It argues that the debt crisis is a crisis of liquidity and recommends rolling over public debt and providing liquidity to Member States in distress. This view is based on the analytic assessment that sovereign debt in Europe is sustainable and no Member State is insolvent, provided European authorities and Member State governments avoid accelerating the crisis. It concludes by calling for a European Institute of Economic Reconstruction that could buy assets from Member States, restructure them and then either keep them in the collective European interest or privatize them.
  
  
• Eurobonds: The financial equivalent of the single Currency. Note for the European Parliament, Directorate General for Internal Policies, Policy Departement A: Economic and scientific policies, Economic and Monetary Affairs. March 2011 (Part of the compilation PE 457.357 for the Monetary Dialogue). Download in PDF
  
  Abstract: The euro area needs deep and fully-integrated financial markets in order to return to sustained economic growth and high levels of employment. Today’s fractioned markets are dominated by Germany and discriminate against small peripheral Member States. Eurobonds could help to overcome these difficulties by creating a large integrated bond market, but not by serving to weaken the budget constraint in highly indebted Member States.
  
  
• How to Avoid Currency Wars. Note for the European Parliament, Directorate General for Internal Policies, Policy Departement A: Economic and scientific policies, Economic and Monetary Affairs. Nov. 2010 (download in PDF here).
  
  Abstract: The stability of the global economy is at risk because policy makers ignore cooperative solutions to the imbalances and tensions that have emerged with the integration of China into the world economy. The paper presents evidence that the Chinese yuan is not undervalued and that there is no evidence that the Fed will generate inflation by its QE2 program. However, there is an increased risk of financial bubbles being created in emerging economies.
  A strong appreciation of the yuan would destroy the world’s most important growth pole, while the US economy needs more flexibility to adjust. The paper proposes a constructive role for the euro and recommends a shift in China’s pegging policy to a basket mainly containing euros and yen and deeper monetary cooperation between Europe and Asia.
  
  
• Democratic Surveillance or Bureaucratic Suppression of National Sovereignty in the European Union? Ideas on the Multilateral Surveillance Regulation. (09.09.2010)
  Document for the European Parliament's Committee on Economic and Monetary Affairs. (Download in PDF)

Abstract : This paper argues that the problems of coordination failure and the insufficient enforcement of common policy rules that have caused the Greek crisis are due to a lack of democracy at the European level. Unless reforms take this democratic dimension in consideration, future crises are inevitable. The proper way of solving this problem is involving the European Parliament as a democratic legislator in multilateral surveillance.

• Europe's economic government or how to use the Treaty for more effective economic coordination in the euro area? (08.06.2010). This document was requested by the European Parliament's Committee on Economic and Monetary Affairs. (Download in PDF)
  
  Abstract:
  This paper deals with the need for macroeconomic policy coordination in the aftermath of the financial crisis and the reasons for coordination failure in an increasingly important domain of policies.
  It discusses the stimulative effects of budget deficits in the present economic environment, the conditions for debt sustainability and the causes for
  competitiveness imbalances in the Euro Area.
  For each of these policy areas, it makes suggestions for the improvement of Europe’s economic governance.

• How to Handle Global Imbalances: a Role for European Monetary Cooperation with Asia.
  Briefing Paper for the Monetary Dialogue March 2010. European Parliament, Committee on Economic and Monetary Affairs.

Abstract:
The crisis happened because misguided monetary policies in the US, and high savings from Asia have also allowed Americans to live above their means. Now the party is over, but global imbalances will not disappear.
China’s model based on unlimited labour supply and a competitive exchange peg to the dollar is under threat. Reforms must preserve Asia‘s growth, give the US flexibility to adjust, and prevent Europe from carrying the burden of global adjustment:
1. Asia should re-peg from the dollar to a basket of euros and Japanese yen.
2. Euro-yen volatility must be minimized.
3. Surpluses are invested in euro and yen, stimulating demand.
4. The basket leads to a future international reserve currency.
5. Coordination should be led by a G4 and ASEM.