Wirtschaftsdienst - Zeitschrift für Wirtschaftspolitik

Newsletter – Volume 50, January/February 2015

The latest issue of Intereconomics features a Forum that focuses on innovation in Europe. In particular, the role that the Horizon 2020 strategy could play in jumpstarting innovation is examined. This issue’s Editorial looks at the implications of SYRIZA’s recent victory in the Greek elections. Is this the beginning of the end of the Brussels-Frankfurt consensus? Additional articles from this issue examine how reform of the Common Agricultural Policy was hindered by changes in decision-making rules, how a balanced budget fiscal stimulus could pull Italy out of its economic slump, how the principle of cost recovery for water services is being abused in the courts, and how a proposal for two-tiered Internet traffic regulation is inherently flawed. Finally, the Letter from America discusses how inequality, which has been rising in the US for more than 50 years, inhibits economic growth.

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Featured Topic

The Impact of Horizon 2020 on Innovation in Europe

The EU’s stagnation on many innovation indicators led to a number of efforts to spur a turnaround. One of most visible projects has been the Horizon 2020 strategy, which devotes unprecedented levels of funding to the promotion of R&D and innovation. But does this strategy address the right issues to promote innovation? Is Horizon 2020 right to ignore geographical considerations when allocating funding? What policy instruments does Horizon 2020 recommend, and has it led to novel strategies being employed, beyond the increase in R&D funding? What steps are individual countries taking? Most importantly, what impact is Horizon 2020 actually having on innovation in the EU?

Additional Highlights from the Current Issue

The End of Austerity?

The first month of 2015 ended with two big-bang events for European policymaking: in Athens, the Greek electorate brought to power a radical-left party which built its electoral campaign on an anti-austerity, anti-memorandum platform; in Frankfurt, the ECB took the long-awaited but stubbornly challenged decision to launch a large programme of quantitative easing to instil liquidity and reignite inflation in the sluggish eurozone economy. Is it the end of austerity? Vassilis Monastiriotis (LSE) discusses some concerns that the new Greek government will have to address, or overcome, if it is to be successful in steering the Greek economy out of the Clashing Rocks of potential default (and a “Grexit”) and austerity-induced recession.

Network Neutrality Regulation: The Fallacies of Regulatory Market Splits

Network neutrality regulations for the Internet have been discussed for about a decade. In Europe recent efforts have produced a proposal by the European Commission that envisages the introduction of a two-tiered Internet traffic regulation based on a regulatory market split between the markets for “public” Internet traffic services and the markets for specialised services offering higher and ensured quality of data transmission. Günter Knieps (University of Freiburg) and Volker Stocker (University of Freiburg) argue that regulatory market splits are artificial and the proposed regulation of markets for Internet traffic services constitutes a regulatory fallacy.

Bringing Inequality Back In

The last half-century in the US has been marked by a sustained rise in inequality of both incomes and wealth, as those at the top have pulled away from everyone else. Heather Boushey (Washington Center for Equitable Growth) details how inequality – long considered by economists to be a growth-enhancing characteristic of developed economies – actually drags down overall economic growth and reduces economic stability. She also puts forward several policy proposals that could halt this worrying trend.

Current Issue of Intereconomics Online


Quote of the Month

For Greece…the election result does not signal the end of austerity. Rather, it simply constitutes yet another episode in the seemingly endless Greek-crisis saga. We can only hope that all parties involved will show the same commitment to maintaining the integrity of the eurozone as they did in the past – only this time making good use of the lessons learned from the previous episodes of this crisis.

from Vassilis Monastiriotis's Editorial The End of Austerity?

About Intereconomics – Review of European Economic Policy

Intereconomics is jointly produced by ZBW – Leibniz Information Centre for Economics and the Centre for European Policy Studies (CEPS). The journal appears bimonthly and features papers by economists that deal with economic and social policy issues and trends in Europe or affecting Europe. To submit a paper for publication, please visit the Call for Papers section of our website for relevant information.

Intereconomics is published by Springer-Verlag Berlin Heidelberg.

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Derek Kruse
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