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Sunday, March 30

30th Mar - W/E: The World

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Draghi vs. Todd on the future of EuropeCraig Willy
Mario Draghi gave a big speech at Sciences Po Paris [this week] explaining what mistakes were made in the euro-boom and euro-crisis years. It makes a lot of interesting points and is almost Kruschev-like as far as regime self-criticism goes.

France is the ‘sick man of Europe’Reuters
Disenchantment with the EU is now sweeping France. The mainstream parties, where the official position has long been supportive of the EU, are challenged to be more skeptical.

Eurosceptics will have election success, impact in European Parliament limitedEuropp / LSE
While Eurosceptic parties such as UKIP in the UK, the Front National in France, and the PVV in the Netherlands may come out on top of their national votes, there are real obstacles to them actively influencing the work of the parliament itself. Ultimately the main issue may be whether they can use the platform gained in 2014 to secure real power in the next European elections in 2019.

The Eiffel group: ‘A political community of the euro’
The recent crisis has highlighted some problems in the current structure of the Eurozone, such as the lack of political integration. This column introduces the Eiffel group – a group of French experts – and its call for a ‘political community of the euro’. The economic and political rationales behind the proposal are discussed in detail. This proposal (also shared by experts in other countries) calls for a debate about the architecture and institutions underpinning the European Monetary Union.

Delivering the Eurozone ‘Consistent Trinity’
Marco Buti, Maria Demertzis, João Nogueira Martins: Although progress has been made on resolving the Eurozone crisis – vulnerable countries have reduced their current-account deficits and implemented some reforms – more still needs to be done. This column argues for a ‘consistent trinity’ of policies: structural reforms within countries, more symmetric macroeconomic adjustment across countries, and a banking union for the Eurozone.

Euroscepticism gaining currency? Implications of the EU elections for economic policyDB Research
The European elections will be held in late May. The share of the vote gained by eurosceptics could increase. Using national election surveys as a basis we have modelled three potential scenarios of the outcome. Even under extreme assumptions the eurosceptics remain far short of attaining working majorities. However, in the run-up to national elections government positions on European policy could be influenced by how well the respective eurosceptics fare on polling day. Thus, the eurosceptics' indirect influence will probably be of relevance both before and after the European elections.

Europe’s banking problems and secular
Jakob de Haan, Jan Willem van den End: While many economists argue that demand stimulus is needed, this column argues that supply side measures are necessary to avoid secular stagnation. In the Eurozone, it is necessary to clean up and strengthen the balance sheets of banks, which can kick-start the flow of new lending. The comprehensive assessment by the ECB is an important step in this direction.

Brussels blog round up 22-28 MarchEuropp / LSE
Dutch and French elections, Obama in Italy, and who won the Clegg-Farage debate?

Eurozone's credit contraction continues Sober Look
German inflation fell in line with expectationsDanske Bank
Euro area: Inflation to trough in MarchNordea
Low inflation numbers from Germany and Spain suggest that Euro area inflation fell to 0.6% y/y in March (data to be published next Monday 11:00 CET). We expect that to be the low point of the cycle.

Putin calls Obama to discuss U.S. proposal on Ukraine-White HouseReuters
Putin called Obama on Friday to discuss a U.S. diplomatic proposal for Ukraine, the White House said, adding that Obama told him that Russia must pull back its troops and not move deeper into Ukraine.

Moody's Puts Russia On Downgrade Review; Cites Event Risk, Investor Sentiment, And Weakening EconomyZH

'Dear to Our Hearts': The Crimean Crisis from the Kremlin's PerspectiveSpiegel
The EU and US have come down hard on Russia for its annexation of the Crimean Peninsula. But from the perspective of the Kremlin, it is the West that has painted Putin into a corner. And the Russian president will do what it takes to free himself.

Dossier of Dubiousness: Did Putin's Man in Crimea Have Mafia Ties?Spiegel
Secret documents provide new information about how Crimea's newly installed prime minister amassed his assets. They also suggest Sergei Aksyonov had ties to the mafia. To this day, he denies any links to organized crime.

The G7 and the limits of Russia’s ‘political isolation’Reuters
Opinion, by Ian Bremmer: The G7 suspended Russia for breaking from its core values. Moscow's response: So what?

Cyprus central bank governor: Ukraine crisis threatens return to growthReuters
Any escalation in the Ukraine crisis poses a threat to Cyprus's economy, the outgoing governor of the country's central bank said in an interview, noting that he expects the bailed-out euro zone member to return to growth in 2015.

Evans: Thoughts on accommodative monetary policy, inflation and financial instability – BIS
Evans: Interest Rates to Stay Near Zero ‘Well Into 2015′ - WSJ
Dudley: US monetary policy and emerging market economies – BIS
George: Sees Signs of Higher Inflation – WSJ

Fed of 1970s Shows Capacity May Mislead: Cutting ResearchBB
The decision of central banks to focus more on economic slack as a barometer of when inflation will become a problem could backfire, if history is any guide.

Do “Too-Big-to-Fail” Banks Take On More Risk?The Big Picture
Our findings therefore lend support to the claim that “Too-Big-to-Fail” banks engage in riskier activities by taking advantage of the likelihood that they’ll receive government aid.
China seizes $14.5 billion assets from former leaderReuters
Chinese authorities have seized assets worth at least 90 billion yuan ($14.5 billion) from family members and associates of retired domestic security tsar Zhou Yongkang, who is at the center of China's biggest corruption scandal in more than six decades.