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Lucas Guttenberg Profile picture
@lucasguttenberg
Jul 23, 2020 • 4 tweets • 3 min read • Read on X
Great piece as always by @ZsoltDarvas on how the #EUCO outcome could change the allocations in the RRF. He gets +14 bn for 🇩🇪, which seems very, very high. My calculations show +1.2 for 🇩🇪 bn.

So what happened here?
bruegel.org/2020/07/having…
1/ Zsolt interprets the #EUCO conclusions as to mean that in the RRF formula, the unemployment rate as a criterion is replaced by the fall in GDP in euros - this is literally what the conclusions say but also massively puts large countries at an advantage. Image
2/ In my calculations, I used the shortfall in percentage terms - otherwise small countries with large shortfalls would get less through this change in the formula just because they are small. And population size is already in the formula anyway. Then, changes are much smaller: Image
3/ So the conclusions are really ambiguous here - taken literally, they lead to a massive boost for the German envelope which makes economically very little sense. Maybe a quick clarification by @eucopresident would be a good idea on how to read this part...

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More from @lucasguttenberg

Lucas Guttenberg Profile picture
Nov 24, 2021
The 🚦 agreement is actually pretty good news for a number of Eurozone files, including the fiscal rules and EDIS.

Here are the main bits:
1/ Most importantly, the text says that the fiscal rules can be "developed further" to reach three goals: Secure growth, safeguard debt sustainability and foster green investment. They should also become "simpler and more transparent, also to strengthen implementation".
2/ This is pretty big. No red lines here, but an open and constructive opening position for negotiations that can very well include a change to the rules themselves. It will be now up to the Commission and other member states to take up the offer that is in that text.
Read 9 tweets
Lucas Guttenberg Profile picture
Sep 13, 2021
Das @_FriedrichMerz-Interview im @handelsblatt ist beeindruckendes Anschauungsmaterial, wie sich ein Teil der Konservativen im europapolitischen Wald verirrt hat und jetzt nicht mehr herausfindet.

Warum das ein Problem ist:
1/ Es geht mit dem klassischen Motiv los, dass man höllisch aufpassen muss, den faulen Südeuropäern (hier stv 🇮🇹🇪🇸) nicht ihr Hallodritum zu finanzieren. Dass gerade diese Länder die ambitioniertesten Pläne zur Verwendung der EU-Gelder vorgelegt haben, bleibt natürlich unerwähnt.
2/ Es geht dann weiter zu den Schuldenregeln. Hier räumt auch Merz ein, dass die Einhaltung für viele Länder schwierig wird. Und dann wird es spannend: Er drückt sich extrem wortreich um eine Antwort herum, ob man die Regeln denn nun wirklich so einhalten sollte.
Read 13 tweets
Lucas Guttenberg Profile picture
Sep 6, 2021
Commissioner @PaoloGentiloni announces in @SZ that the Commission will only present its proposal for fiscal rules reform once there is a consensus among eurozone countries. Here's why this is a wise approach and why we are still far away from that point:
sueddeutsche.de/wirtschaft/eu-…
1/ A weird feeling has grown in recent months that an expenditure rule is the way to go to reform the SGP and that what we basically need now is a Commission proposal that the technocrats then can tweak so that everyone is happy. Everyone is now waiting for that proposal.
2/ In my view, this feeling is a trap and the Commission is now trying to avoid falling into this trap by basically asking member states to come to a consensus what they want before puttting out a proposal.
Read 14 tweets
Lucas Guttenberg Profile picture
Jun 21, 2021
CDU and CSU are about to publish their election manifesto. On EU economic governance/fiscal policy, it is in perfect continuity with the Merkel line: No openings, no thick red lines.

Quick overview:
1/ CDU and CSU say they want a "stability and growth union". Who doesn't. They say they want to return swiftly to the fiscal rules but to "develop them further without watering them down." The also want sanctions to be applied and less room for judgment. No surprise here.
2/ On the Recovery Instrument, they insist that it is temporary and a one-off - which is true. They also say it cannot lead to a "debt union" and there cannot be a mutualisation of sovereign debt - both of which are not bound to happen. So no surprises here.
Read 7 tweets
Lucas Guttenberg Profile picture
May 18, 2021
The German Constitutional Court today pulled back from the brink and put the case on the ECB's PSPP programme finally to rest. The saga ends with a lot of damage on all sides and a number of open questions.

A first take:
1/ The Court really wanted the plaintiffs to know that it's game over for now. They first declared their request for an intervention inadmissible on formal grounds. But just to get the message through, they also then went into why it was not only inadmissble but also unjustified.
2/ In the original judgment, the Court had faulted the federal government and the Bundestag for not pushing the ECB to perform a proportionality assessment of its PSPP programme. See thread for the full story and for how these two reacted:
Read 15 tweets
Lucas Guttenberg Profile picture
May 17, 2021
Ahead of tomorrow's publication of Karlsruhe's decision on whether its judgment on the ECB's PSPP programme has been sufficiently respected, let's take a look back what happened so far in this season:
1/ On 5 May 2020, the @BVerfG delivered its surprise judgment. It is important to keep in mind what the Court actually said: The addressees of the judgment were the German federal government and the Bundestag. These two had violated the rights of the plaintiffs.
2/ How did they do that? Govt and Bundestag did not, in the eyes of the Court, sufficiently pressure the ECB to explain why the PSPP programme (the ECB's quantitative easing tool) was a proportionate measure. That's it, that was the judgment.
Read 20 tweets

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