Panicos Demetriades's picture
Affiliation: 
University of Leicester
Credentials: 
Professor of financial economics
Former Governor, Central Bank of Cyprus and ECB Governing Council member

Voting history

Autumn Statement & Charter for Budgetary Responsibility

======================================================================

Question 1: The Chancellor forecasts a cyclically adjusted fiscal surplus by 2017-18 and in cash terms by 2019-20. Do you agree that this planned path of fiscal consolidation is appropriate?

======================================================================

 

Answer:
Neither agree nor disagree
Confidence level:
Very confident
Comment:
It's very hard to say without having access to their models, although from the outside it looks rather optimistic that GDP will grow above trend at a time when Europe is still struggling and there is growing global uncertainty, emanating from geopolitical factors, including terrorism, ISIS, the refugee crisis, the Middle East crisis, tensions between Russia and the West. We are going through some very uncertain times and this will weigh down heavily on the growth prospects of the U.K., which is a relatively open economy and therefore susceptible to events in Europe and the rest of the world.

ECB's quantitative easing

======================================================================

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?

======================================================================

Answer:
Agree
Confidence level:
Very confident
Comment:
See my reasoning above. There are of course temporary benefits by the QE programme in terms of liquidity boost. But at the same time, the programme will also helps to shift most of the risk of eurozone failure from the private sector to the public sector.

======================================================================

Question 1:

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

======================================================================

Answer:
Agree
Confidence level:
Very confident
Comment:
The absence of risk sharing partially defeats the purpose of the exercise, although I appreciate that this may have been the best that could have been agreed by the Governing Council under the curcumstances. It is indeed likely that several countries are likely to face higher borrowing costs as a result, for the reasons provided by Giavazzi and Tabellini. Relatedly, there's also a new risk to central bank independence that arises from these arrangements, as politicians at the national level will, in effect, decide whether to honour their obligations to the national central bank, which can be used as means of putting pressure on the central bank on other issues. The threat of central bank insolvency and the process of recapitalisation this will instigate, are powerful tools in the hands of politicians who want to exercise control over their national central banks. In the end the central bank may end up being a senior creditor but not without a dent in its independence. This creates longer term risks to the viability of the euro and the effectiveness of monetary policy.

Deal or no deal: The Greece standoff

=======================================

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?

=======================================

Answer:
No opinion
Confidence level:
Extremely confident
Comment:
Media reports are not terribly reliable in such fast changing circumstances. In any case, media reports suggest that there is as yet no agreement on new fiscal measures. It's therefore hard to comment on what the additional effects will be at this stage, without knowing the overall package of fiscal measures and structural reforms.

=======================================

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

=======================================

Answer:
No opinion
Confidence level:
Extremely confident
Comment:
Without knowing what the agreement is, it's hard to express an opinion on this.

Pages