In May 2014, EU citizens will vote in the most important European Parliament elections to date. With the new powers allocated to it by the Lisbon Treaty, the new European Parliament will shape EU policies in many important areas and will elect the President of the Commission. However, public confidence in the EU has fallen to historically low levels - to a great extent due to the financial crisis and its aftermath - and the participation rate in European Parliament elections has dropped steadily since the first call for a direct vote in 1979. This raises fundamental questions about its political and democratic legitimacy. This Forum examines the economic agendas of the main political parties vying for power and the potential outcome of the May elections, including the role that radical and anti-euro parties are likely to play in the campaign and in the next Parliament.
In this figure from the Forum article The Balance of Power in the Next European Parliament, Yves Bertoncini and Valentin Kreilinger use polls from eight EU member states to predict the number of European Parliament seats held by various political groups following the May elections. Click on the figure for further information.
The US Federal Reserve has finally begun to implement its long-anticipated tapering strategy. David Stockton explores the risks on both sides of the policy ledger: if the Fed removes its monetary accommodation too slowly, an extended period of extremely low interest rates raises the risk that asset prices and lending behavior will come unhinged from fundamentals. However, the risks associated with tightening too much too soon seem decidedly greater, as very high levels of long-term unemployment in the US lead to deteriorating job skills and even greater damage to the productive potential of the US economy.
Natural rate theory has dominated interpretations of economic trends and policy prescriptions over many decades, as economists contrasted high unemployment and lower inequality in Europe with the great American job machine. Ronald Schettkat's 2012 article discusses the relationship between skill structure and wage distributions and investigates the claim that inequality creates incentives which facilitate human capital formation. The big tradeoff between efficiency and inequality is dismissed as a fallacy, as it is demonstrated that redistribution lays the foundation for human capital investment rather than impeding it.
"The financial and economic crisis in Europe is generally assumed to have fuelled Eurosceptic sentiments, and the EP elections are seen to provide an excellent forum for voters to express their discontent not only with the process of European integration, but with the political establishment more generally."
- from Stijn van Kessel and Andrea L.P. Pirro's Forum article "Discontent on the Move: Prospects for Populist Radical Right Parties in the 2014 European Parliament Elections"
The WTO recently completed its first new multilateral agreement in more than 12 years. The trade facilitation that comprises the main component of the Bali Package could boost the volume of world trade and benefit the least developed countries. Overall, however, the outcome is rather modest. Nonetheless, Georg Koopmann and Stephan Wittig assert that the fact that there was a positive outcome at all may provide a push for the finalisation of the WTO's stagnant Doha Round.
by Georg Koopmann, Stephan Wittig
by Francis Jacobs, Yves Bertoncini, Valentin Kreilinger, Stijn van Kessel, Andrea L.P. Pirro, Simon Otjes, Sonia Piedrafita, Vilde Renman
by Michael Grömling
by Joan Costa-i-Font
by Christoph S. Weber, Benedikt Forschner
by David J. Stockton
Stéphanie Marie Stolz
Vassilis Monastiriotis, Niamh Hardiman, Aidan Regan, Chiara Goretti, Lucio Landi, J. Ignacio Conde-Ruiz, Carmen Marín, Ricardo Cabral
Carsten Hefeker, Francisco Torres, Annette Bongardt, Pierre Wunsch, Christoph Hermann
Barry Z. Cynamon, Steven M. Fazzari
Sue Maguire, Bart Cockx, Juan J. Dolado, Florentino Felgueroso, Marcel Jansen, Izabela Styczyńska, Elish Kelly, Seamus McGuinnes, Werner Eichhorst, Holger Hinte, Ulf Rinne