If policymakers misinterpret #inflation numbers and call for drastic tightening of monetary policy in response, an already difficult economic situation could get infinitely worse.
Here’s why this could be a real risk in the coming months.
🧵

1 The first reason is simple: policymakers need to focus not on current inflation numbers but on rates expected when policy impacts will be felt on the economy, i.e. at least 1 year down the line.
On this see this thread:

https://twitter.com/AndrewWattEU/status/1571904082478256129?s=20&t=vT4Ct9Gtnb_Dy7Vo__SR3g

2

A lot of people have got the idea that marginal pricing and the merit order are to blame for high electricity prices.
They struggle to accept that prices are set by the highest-cost (not average) producer, that gas drives electricity prices despite renewables.
#Servicetweet
1 However this is akin to shooting the messenger who brings bad news.
Marginal pricing is actually just the way prices are normally set in competitive markets. Of course prices can be set differently. But then the impacts of other pricing principles need to be considered.
2

I see a lot of talk of the west "filling #Putin's war chest", "financing the war on #Ukraine", of sanctions “bankrupting” the Russian state etc. Such language points to serious misconceptions. It is important to get some basic economic facts straight.
That’s the aim of this🧵
1 In all these issues it is vital to keep separate: 1) what involves payment in roubles and what transactions are in, for Russia, foreign currency, and 2) what production is currently/potentially in Russia (or close allies) and what is based in "hostile" countries.
2

Excellent reporting @FT on #Pfizer. It is as wrong to demonise as it is to lionise the company, set for revenue of USD 80bn (!) this year. No private co. sd be able to dictate to governments as Pfizer has.
Oddly the article doesn't mention patent waivers.
1/3

https://twitter.com/khalafroula/status/1465584264213377026

I'm sceptical that a patent waiver will quickly resolve shortages in low-income countries, & concerns about longer-run negative effects are serious. But it is the lever to ensure the pharma co.s behave responsibly. e.g. 1:1 #COVAX donation for hi-income-country sales.
2/3

It’s out: the coalition agreement of Germany’s traffic-light coalition.
wiwo.de/downloads/2783…
All of 177 pages covering everything with what to do about Russia to what to do about wolves. (yes, really).
What’s in it for Europe?
Thread (w/ focus on economic issues).
1 A first point is just how pervasive Europe is. “EU” or “europ” is mentioned no less than 393 times! Scarcely a policy area that does not somehow involve Europe. 🇪🇺 is domestic politics. It is also a testament, tho, to an (ex ante) willingness by 🚦to engage w/ EU partners. 👏
2

As 🇩🇪💉campaign loses some momentum, an anxious question arises: is this due to greater than expected resistence to getting a jab? And will vax rates that could realistically be achieved be enough to limit the public health risks?
@rki_de looks at both Qs & ... is confident
1/

https://twitter.com/rki_de/status/1412048168255168512

There is a lot of detail in the report, but the key message on needed vax rates - in most cases: 2 shots - is:
90% coverage of the <60's is needed.
For 12-59 year-olds there is a huge difference btwn 65 & 75% coverage. Above that the effect is smaller.
(>12 assumed = 0).
2/

.@SDullien & @KatjaRietzler have a paper out showing the scope for expansionary fiscal policy in Germany if the debt brake - which, stupidly, has constitutional status - were relaxed in various ways.
As this is relevant for the 🇪🇺 debate, a few key takeaways in EN.
1/7

https://twitter.com/SDullien/status/1412019976958062592

Keeping it simple, we'll just look at the total additional nominal fiscal marge de manouvre for the period 2023-30 (without feedback effects) opened up by 5 options.
2/7

🇩🇪💉 update 5 July & review calendar week 26
Slowdown continues - but ?-mark over corporate doctors
With the figures reported for Friday & the weekend once again down on the previous week (b4 revisions), the 7-day ave continues to slide, and is now only a touch above 700k.
1/5 The sharp fall-off in 2nd 💉is barely offset by a renewed increase in 1st doses.
Last week saw the first decline under 5m doses for 4 weeks. (Revisions might be enough to change this, & see 4&5/5.)
On the face of it, 🇩🇪 campaign is returning to May vax rates.
2/5

The EU Commission @PaoloGentiloni has just issued a communication on EU economic policy and its coordination - the fiscal rules and those governing so-called macroeconomic imbalances.
ec.europa.eu/info/system/fi…
Mostly light, but some shadows.
Thread 👇
1/n I'll look quickly in turn at
- Next Generation EU
- the (suspension of the) fiscal rules
- monitoring of macro imbalances

2/n

It is great to see #Vietnam moving up the value chain and developing its own tech, selling it in foreign markets.
OTOH selling hi-end EVs to Americans seems an odd focus. And not just for the reason cited here: it might be a costly failure.
1/4

https://twitter.com/johnreedwrites/status/1399923007301111808

🇻🇳 ppl currently rely overwhelmingly on motorbikes for private transport, but cars are increasingly common as the middle class expands . Trade agreements are also leading to cuts in hi import duties. Congestion and air pollution are huge problems in urban areas.
2/4

imk-boeckler.de/de/faust-detai…
@SDullien and I have updated our vacccination forecast for Germany first published in March.
Developments since then require some adjustments, but basically 🇩🇪 remains on track ... with some risks.
Short thread on the main findings 👇
1/ Our mid-March forecast was that 75% of German adults (52.5m people) could be completely vaccinated by end of July. At the time this was highly controversial, but the marked acceleration in vaccinations since has largely borne out the prediction.
2/

Completely agree with @sjwrenlewis economic analysis of EU fiscal rules. Fiscal policy should be about macroeconomic stabilisation not government-debt limitation. Happily, I disagree somewhat on the politics: Feasible reforms cd get us nearer where we need to be.
Thread 👇
1/19

https://twitter.com/sjwrenlewis/status/1387325369305415681

The basic economic insight is:
“<when> the economy is growing rapidly relative to the EU average individual countries need to contract fiscal policy, and in relative downturns … need fiscal stimulus <because> monetary union takes away effective national monetary policy.”
2/19

How much does the EU and how much does each member state have to do to achieve the agreed vaccination target (70% of the adult population fully vaccinated by 21st September)?
A short thread 👇, first the results then some discussion of the calulations.

💉🇪🇺
1/8 Starting with the EU, the graph shows that in the 205 days left, a tad over 0.5% of the (total) population needs to get a jab every day. The current rate is a little under 0.2 per day. This implies a needed acceleration by a factor of around 2.7 (right-hand scale).
2/8

Devastating, incredibly prophetic quotes from the dissenting opinion in the #GCC 2014 ruling on #OMT (in German).

tldr in English: do *not* fall for the line that the German constitution obliged the #BVerfG to rule as it did.

1/4

https://twitter.com/prof_mayer/status/1259982002033438720

Rather there has been a persistent effort over an extended to open up the legal space to make the recent ruling possible.

Let me unoffically translate one long sentence (written, to repeat, in 2014) which encapsulates what is problematic about last week's ruling:

2/4

Useful thread with links on the upcoming ruling by the German Constitutional Court #BVerfG.
What is not sufficently emphasised imho is the risk to the entire legal framework of the EU. It's not just a matter of EMU. The primacy and thus the consistency of EU law is at stake.
1

https://twitter.com/RafaelMentges/status/1257010106199310337

If countries can subvert agreed EU procedures and institutions, on which the highest EU court, the ECJ, has made a ruling, using national (constitutional) courts, & deriving a legitimacy from their own national constitutions, we are on a slippery slope indeed.
2