The share of US dollar reserves held by central banks fell to 59 percent—its lowest level in 25 years—during the fourth quarter of 2020, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) survey. Some analysts say this partly reflects the declining role of the US dollar in the global economy, in the face of competition from other currencies used by central banks for international transactions. If the shifts in central bank reserves are large enough, they can affect...

Read more

1 Introduction The UK referendum on EU membership in 2016 has set the course for the most significant change to the relationship between the United Kingdom and its closest trading partners for decades. The primary interest from the ECB’s perspective is to understand the likely impact on trade of the departure of the United Kingdom from the European Union, as the United Kingdom has long been one of the euro area’s major export markets. This article reviews the development of UK import...

Read more

Are the euro area’s economic prospects likely to worsen in a scenario where coronavirus variants continue to multiply? The current situation is bittersweet. The first quarter was weaker than we expected three months ago. On the other hand, the pace of vaccination is gaining momentum across Europe. This is good news, because it will have a major impact on the economy. For the time being, it is estimated that growth will be around 4%. We expect the second half of...

Read more

Today, the Commission is proposing that Member States ease the current restrictions on non-essential travel into the EU to take into account the progress of vaccination campaigns and developments in the epidemiological situation worldwide. The Commission proposes to allow entry to the EU for non-essential reasons not only for all persons coming from countries with a good epidemiological situation but also all people who have received the last recommended dose of an EU-authorised vaccine. This could be extended to vaccines having completed...

Read more

In the second half of 2020 global economic activity and trade staged a sharp rebound driven mainly by the manufacturing sector, while services sector activity was and has remained subdued. In the third quarter of 2020 global economic activity recovered swiftly as a result of the easing of the pandemic and associated containment measures as well as the significant policy support deployed at the peak of the crisis. Despite a slowdown in the last quarter of the year, reflecting a...

Read more

A year ago, the world changed. While the pandemic’s effect on workers has varied worldwide, the new reality has left many mothers scrambling. With schools and daycares closed, many were forced to leave their jobs or cut the hours they worked. New IMF estimates confirm the outsized impact on working mothers, and on the economy as a whole. In short, within the world of work, women with young children have been among the biggest casualties of the economic lockdowns. 'Mothers of young children...

Read more

The COVID-19 crisis has resulted in the largest decrease in taxes on wages since the global financial crisis of 2008-09, according to a new OECD report. Taxing Wages 2021 shows that declining household incomes coupled with tax reforms linked to the pandemic are driving widespread declines in effective taxes on wages across the OECD. The report highlights record falls across the OECD during 2020 in the tax wedge – the total taxes on labour paid by both employees and employers, minus...

Read more

Universal, accessible, timely and free-of-charge testing needed across the EU EU COVID-19 certificates are not travel documents Member states should not impose quarantines/tests on certificate holders On Thursday, Parliament adopted its negotiating position on the proposal for a certificate to reaffirm the right to free movement in Europe during the pandemic. MEPs agreed that the new “EU COVID-19 certificate” - instead of Digital Green Certificate, as proposed by the Commission - should be in place for 12 months and not...

Read more

Euro area net saving decreased to €508 billion in four quarters to fourth quarter of 2020, from €549 billion one quarter earlier Household debt-to-income ratio increased to 96.3% in fourth quarter of 2020 from 93.8% one year earlier Non-financial corporations' debt-to-GDP ratio (consolidated measure) at 84.0% in fourth quarter of 2020, up from 76.8% one year earlier Total euro area economy Euro area net saving decreased to €508 billion (5.6% of euro area net disposable income) in 2020 compared with €549 billion in the four quarters to the...

Read more