Don’t expect easy answers or simple rules. Projecting growth, deficits, and interest rates is just the beginning When does the level of debt become unsafe? To answer this question, we need a definition of “unsafe.” I propose the following: Debt becomes unsafe when there is a non-negligible risk that, under existing and likely future policies, the ratio of debt to GDP will steadily increase, leading to default at some point. The natural way to proceed is then straightforward. The dynamics of the debt...

Good afternoon. We have just concluded our EU-China summit. Today's summit is not business as usual, because this is a war-time summit. We are living through the gravest security crisis in Europe since World War Two. Putin's war in Ukraine continues to kill women and children and destroy entire cities, and this is a blatant violation of international law. The European Union's top priority is to stop the war as soon as possible and to protect the Ukrainian people. In...

The COVID-19 pandemic has accelerated the trend toward digitalisation of retail financial services. This report examines whether the COVID-19 pandemic changed the ways in which individuals and firms engage with innovative financial service providers and traditional financial incumbents. Its main finding is that the pandemic has accelerated the trend toward digitalisation of retail financial services. Comprehensive data on market shares of FinTechs, BigTechs and incumbent financial institutions in retail digital services are scarce. However, available proxies and insights from market participants...

Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European Parliament | Thank you for inviting me to update you on the digital euro project and the progress made since we last met in November. We have previously discussed the broad policy objectives associated with a digital euro. Today, I would first like to highlight some important features which, by making a digital euro attractive to citizens...

Labor shortages have pushed up wage growth, benefitting low-wage workers but adding to inflation risks. Bringing more workers back into the labor force would ease these pressures while making the recovery more inclusive. By late 2021, there were 50 percent to 80 percent more unfilled jobs in Australia, Canada, the United Kingdom and the United States than there were prior to the pandemic. Open vacancies were at or above their 2019 levels in other advanced economies too, and have risen...

The Commission is presenting today a package of European Green Deal proposals to make sustainable products the norm in the EU, boost circular business models and empower consumers for the green transition. As announced in the Circular Economy Action Plan, the Commission is proposing new rules to make almost all physical goods on the EU market more friendly to the environment, circular, and energy efficient throughout their whole lifecycle from the design phase through to daily use, repurposing and...

The European Commission and the United States announce that they have agreed in principle on a new Trans-Atlantic Data Privacy Framework, which will foster trans-Atlantic data flows and address the concerns raised by the Court of Justice of the European Union in the Schrems II decision of July 2020. The new Framework marks an unprecedented commitment on the U.S. side to implement reforms that will strengthen the privacy and civil liberties protections applicable to U.S. signals intelligence activities.  Under the...

Today, the European Council was joined by President Joseph R. Biden, Jr. of the United States. The leaders discussed the coordinated and united response of the European Union and the United States to Russia's unprovoked and unjustified military aggression in Ukraine. They reviewed their ongoing efforts to impose economic costs on Russia and Belarus, as well as their readiness to adopt additional measures and to stop any attempts to circumvent sanctions. Leaders discussed the urgent needs caused by Russia’s aggression, committed to...