Akos Valentinyi's picture
Affiliation: 
University of Manchester

Voting history

ECB's quantitative easing

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Question 2:

Do you agree that the structure of the ECB's QE programme makes the Eurozone more fragile and increases the risk of one country leaving the euro?

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Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
The structure of the ECB's QE programme does not make the Eurozone more or less fragile. The lack of fiscal union makes the Eurozone more fragile. And the structre of the ECB's QE programme is a simple reflection of that.

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Question 1:

Do you agree that the design of the ECB's QE programme reduces its effectiveness? 

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Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
Generally monetary conditions are determined by the liabilities side of the central bank. Hence the risk sharing arrangement has little impact on the effectiveness of QE. The effect of more or less risk sharing on the cost of market funding is unclear. Less risk sharing may increase the funding cost if national governments behave the same way in the presence of more and less risk sharing. However, if more risk sharing leads to moral hazard, then the effect of risk sharing on funding cost is most unclear.

Deal or no deal: The Greece standoff

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Question 3: Do you agree that implementation of the agreement will lead to an expected decrease in Greek debt repayments?

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Answer:
Agree
Confidence level:
Very confident
Comment:
Debt relief for Greece will happen sooner or later. One task for the creditors is to structure the details of bail-out the agreement and future debt relief in a way that gives the Greek government to carry out the reforms which are necessary for sustained GDP growth in medium to long run.

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Question 2: Do you agree that Greece would be better off defaulting right now rather than signing to the agreement under consideration?

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Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
Default is usually followed by a financial turmoil, and a loss of access by the government to borrow from the financial markets. A Greek sovereign default would have a more severe impact on the Greek banking system than in the case of another country which controls its own currency. A Greek default would render the banking system insolvent which would require of the ECB to cut its liquidity support as it can only lend to solvent banks. A sever Greek banking crisis is likely to follow a sovereign default which likely to have a further negative effect on Greek GDP.

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Question 1:  

Do you agree that, on balance, the implementation of the agreement as outlined in media reports will have a non-trivial negative effect on Greek GDP?

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Answer:
Neither agree nor disagree
Confidence level:
Very confident
Comment:
The question is hard to answer. On the one hand, primary surplus has negative effect on demand relative to a primary deficit. Hence one may argue that the proposed agreement has a negative effect on Greek GDP. On the other hand the existing bailout agreement required a higher primary surplus than proposed agreement, and the Greek economy was growing last year under the old agreement. Hence one may argue that the proposed agreement requires smaller cuts in government expenditures than the old one. Therefore it will have a positive effect on Greek GDP relative to the exiting agreement.

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