We are pleased to have hosted another installment of the Global Macro Call on WednesdayJuly 12. This session focused on the debate in Europe about the reform of fiscal rules that underpin the Stability and Growth Pact. As many know, we have been critical of the existing framework since it is based on cyclically-adjusted fiscal balances, where the key input is output gaps that in many instances do not make sense. In particular, for the Euro periphery, these output gaps have tended to understate slack, resulting in excessively tight fiscal policy. At the same time, we are critical of the new framework which has highly complex debt sustainability analysis at its core. That framework depends critically on the cost of debt at which countries can issue in the future, something in which there is limited transparency at the moment, given that ECB PEPP reinvestments may be playing a role in keeping periphery spreads narrow. This call featured speakers from the North and South, and from both sides of the debate.


Robin Brooks, Managing Director and Chief Economist, IIF
Christian Kopf, Head of Fixed Income and Currencies, Union Investment Group
Cosimo Pacciani, Head, Group Research Hub, Poste Italiane
Philippa Sigl-Glöckner, Founder, Dezernat Zukunft
Ángel Ubide, Managing Director and Head of Economic Research for Global Fixed Income, Citadel

This session was off-the-record and concluded with Q&A from the audience. Please contact [email protected] with any questions.