There are at least two ways to read the decision rendered by the German Constitutional Court – BundesVerfassungsGericht or BVerfG – on May 5, 2020 (BVerfG, Urteil des Zweiten Senats vom 5. Mai 2020), in the case opposing the ECB to a group of complainants claiming that the Frankfurt-based monetary institution went beyond its legal mandate, when it decided in March 2015 to launch a large scale asset purchase programme (APP) targeting first and foremost government bonds. We can read it through the lenses of an Economic Policy or through the lenses of a Constitutional law and Politics. From both perspectives, the ruling contains useful insights that clarify some complicated institutional questions and shed light on economic policy options available to the ECB and to EU/Eurozone Member States. The fact that this ruling comes in the midst of an unprecedented global economic crisis, stemming from the radical measures enacted all over the world to combat the coronavirus pandemic, makes it even more critical for investors to understand its rationale and contending claims.
Category: Macro Analysis
A Pandemic OMT – P-OMT – might well be the most appropriate solution in the current context – and perhaps the only one that is available, especially if discussions around a common Eurozone fiscal package fail to produce meaningful results – in order to support individual Eurozone member countries, while preserving the overall financial stability of the Eurozone and the autonomy and credibility of the ECB.
A temporary production reduction agreement under current conditions is not necessarily in the interest of all stakeholders in the global oil industry
This deal will not solve the huge oversupply that is currently still building-up
The oil war is not due to misunderstandings or ego plays but to the intrinsically different strategies and motives of the key players at hand.
For all these reasons, an OPEC ++ coalition cannot not be sustained over time and its impact on oil prices is likely to be marginal and disappointing.
Willl the Covid-19 reshape the global economy? What are the most important hotspots and the blindspots revealed by this crisis? We tackle this issue in this article. Beyond the handling of the health crisis and the exceptional support measures designed to ensure that hundreds of millions or even billions of people around the world do not lose their livelihoods overnight, the most worrying concern are the medium- and long-term consequences of the crisis for the global economy.
Alexandre Kateb was interviewed on RT International about Saudi Arabia’s “oil put” strategy following the Kingdom’s decision to flood the market with cheap oil in order to squeeze the other major oil producers.
In order to better measure the impact of value chains fragmentation, we conducted an “input-output” analysis to highlight the dependence of the US economy on Chinese output, branch by branch.
Falling global oil demand in the wake of the coronavirus outbreak Global oil demand has been hit hard by the coronavirus outbreak which led to the shutdown of much of the Chinese economy in January and February and the subsequent impact on supply and demand in China and all around the world, as the epidemic […]
Economist Alexandre Kateb explains how the state has had to go into debt over the last thirty years, via its central bank, to attract foreign capital. Since trust has been broken, the banking system has been beset by numerous requests to withdraw money.
Consultant and specialist in the Arab world, Alexandre Kateb is a lecturer at Sciences-Po.
Once again, Argentina is embarked on a complicated debt restructuring process. This post exposes some key facts and figure and makes some observations from the macro and legal perspectives.
The spread of the coronavirus (Covid-19) is currently the number one concern among healthcare specialists, policymakers, journalists, economic and market analysts and ordinary citizens alike. The elucidation of the disease’s dynamics, death toll and impact on the Chinese and on the global economy are mobilising experts and analysts both in the economics and healthcare communities. […]