European Stability Mechanism (ESM) 199d ago

Watch Day 2 of the ESM | SUERF - The European Money & Finance Forum Conference on "𝗚𝗲𝗼𝗽𝗼𝗹𝗶𝘁𝗶𝗰𝗮𝗹 𝗗𝗶𝘀𝗿𝘂𝗽𝘁𝗶𝗼𝗻𝘀 & 𝗗𝗲𝗯𝘁 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗶𝗹𝗶𝘁𝘆". 𝗦𝗲𝘀𝘀𝗶𝗼𝗻1️⃣: Daragh Clancy presented: 𝘚𝘱𝘦𝘯𝘥𝘪𝘯𝘨 𝘰𝘯 𝘵𝘩𝘦 𝘧𝘳𝘰𝘯𝘵𝘭𝘪𝘯𝘦: 𝘛𝘩𝘦 𝘮𝘢𝘤𝘳𝘰𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘪𝘮𝘱𝘭𝘪𝘤𝘢𝘵𝘪𝘰𝘯𝘴 𝘰𝘧 𝘨𝘦𝘰𝘱𝘰𝘭𝘪𝘵𝘪𝘤𝘢𝘭 𝘶𝘱𝘩𝘦𝘢𝘷𝘢𝘭 (co-author: Matija Lozej) David Sarasa Flores presented: 𝘉𝘶𝘺 𝘎𝘶𝘯𝘴𝘰𝘳 𝘉𝘶𝘺 𝘙𝘰𝘴𝘦𝘴? 𝘌𝘜 𝘥𝘦𝘧𝘦𝘯𝘤𝘦 𝘴𝘱𝘦𝘯𝘥𝘪𝘯𝘨 𝘧𝘪𝘴𝘤𝘢𝘭 𝘮𝘶𝘭𝘵𝘪𝘱𝘭𝘪𝘦𝘳𝘴 (co-authors: Agustin García Serrador, Camilo Andrés Ulloa Ariza.) 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 𝗼𝗳 𝘀𝗲𝘀𝘀𝗶𝗼𝗻1️⃣: 🔹 Enhancing European defence capabilities through public spending can boost aggregate output, but crowding out resources from the private sector is a risk. 🔹 We need to boost R&D spending, time defence stimulus to periods of economic slack, & enhance domestic supply chains to minimise import leakage. 𝗦𝗲𝘀𝘀𝗶𝗼𝗻2️⃣: Francesco Bianchi presented: 𝘍𝘶𝘯𝘥𝘦𝘥 & 𝘶𝘯𝘧𝘶𝘯𝘥𝘦𝘥 𝘧𝘪𝘴𝘤𝘢𝘭 𝘴𝘩𝘰𝘤𝘬𝘴 – 𝘪𝘯𝘧𝘭𝘢𝘵𝘪𝘰𝘯 𝘥𝘺𝘯𝘢𝘮𝘪𝘤𝘴 𝘪𝘯 𝘵𝘩𝘦 𝘌𝘶𝘳𝘰 𝘈𝘳𝘦𝘢 (co-authors: Giovanni Callegari, Ermal Hitaj, Konstantinos Theodoridis) Eyraud, Luc presented: 𝘏𝘰𝘸 𝘤𝘢𝘯 𝘌𝘶𝘳𝘰𝘱𝘦 𝘗𝘢𝘺 𝘧𝘰𝘳 𝘛𝘩𝘪𝘯𝘨𝘴 𝘵𝘩𝘢𝘵 𝘪𝘵 𝘊𝘢𝘯𝘯𝘰𝘵 𝘈𝘧𝘧𝘰𝘳𝘥? 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 𝗼𝗳 𝘀𝗲𝘀𝘀𝗶𝗼𝗻2️⃣: 🔹 In a currency union, unfunded fiscal shocks (not backed by future adjustments) in high-debt countries cause inflation for the whole union, whereas the output spillovers are minimal. 🔹 Mix of fiscal consolidation & reforms are needed to stabilise long-term debt, & for the highest-debt countries that might not be enough. Reforms will have less impact if delayed. 𝗦𝗲𝘀𝘀𝗶𝗼𝗻3️⃣: Ramon Marimon presented:𝘛𝘩𝘦 𝘯𝘦𝘦𝘥 𝘰𝘧 𝘢 𝘳𝘦𝘴𝘪𝘭𝘪𝘦𝘯𝘵 𝘴𝘦𝘭𝘧-𝘦𝘯𝘧𝘰𝘳𝘤𝘪𝘯𝘨 𝘧𝘪𝘴𝘤𝘢𝘭 𝘥𝘦𝘴𝘪𝘨𝘯: 𝘢 𝘍𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭 𝘚𝘵𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘧𝘶𝘯𝘥 𝘸𝘪𝘵𝘩 𝘧𝘶𝘯𝘥 𝘤𝘰𝘯𝘵𝘳𝘢𝘤𝘵𝘴 Adrien Wicht presented: 𝘛𝘩𝘦 𝘧𝘶𝘯𝘥, 𝘱𝘳𝘪𝘷𝘢𝘵𝘦 𝘣𝘰𝘯𝘥 𝘮𝘢𝘳𝘬𝘦𝘵𝘴 & 𝘵𝘩𝘦 𝘤𝘦𝘯𝘵𝘳𝘢𝘭 𝘣𝘢𝘯𝘬: 𝘌𝘜 𝘴𝘢𝘧𝘦 𝘢𝘴𝘴𝘦𝘵𝘴 & 𝘢𝘯 𝘦𝘧𝘧𝘦𝘤𝘵𝘪𝘷𝘦 𝘭𝘦𝘯𝘥𝘦𝘳𝘰𝘧 𝘭𝘢𝘴𝘵 𝘳𝘦𝘴𝘰𝘳𝘵 Luca Zavalloni presented:𝘛𝘩𝘦 𝘍𝘶𝘯𝘥 𝘷𝘴/𝘢𝘯𝘥 𝘚𝘎𝘗 𝘍𝘪𝘴𝘤𝘢𝘭 𝘙𝘶𝘭𝘦𝘴: 𝘮𝘢𝘬𝘪𝘯𝘨 𝘧𝘪𝘴𝘤𝘢𝘭 𝘳𝘶𝘭𝘦𝘴 𝘤𝘳𝘦𝘥𝘪𝘣𝘭𝘦 & 𝘮𝘰𝘳𝘦 𝘦𝘧𝘧𝘪𝘤𝘪𝘦𝘯𝘵 (co-author: Giovanni Callegari; discussant: Pedro Teles.) 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀 𝗼𝗳 𝘀𝗲𝘀𝘀𝗶𝗼𝗻3️⃣: 🔹 A comprehensive debt sustainability analysis is a necessary starting point for institutional insurance at the euro area level. 🔹 The task of providing insurance is best shared across institutions. 🔹 Debt insurance with rules & contracts can help reduce moral hazard & smooth consumption during economic downturns, generating significant welfare gains. #ESMeuro #DebtSustainability @suerf-theeuropeanmoneyfina7105 ------------------------------------------------------------------------------------------------------------------------ The European Stability Mechanism (ESM) is the permanent crisis resolution mechanism for the countries of the euro area. Like its predecessor -- the temporary European Financial Stability Facility (EFSF) -- the ESM provides financial assistance to euro area Member States experiencing or threatened by financing difficulties.