The paper finds that the post-pandemic inflation surge and subsequent decline from 2021 to 2024 had no significant impact on public support for the Euro for the EA-19 and for most individual member states of the EA-19. From 2021 to 2024, net public support for the euro remained remarkably stable...

This paper applies the Growth-at-Risk (GaR) framework to assess downside risks to euro area GDP growth, and it examines its usefulness for stress testing. Supervisory stress-test scenarios are often criticized for being either too mild or implausibly severe, raising questions about calibration....

This paper examines how fiscal policy in the euro area reacts to monetary policy, by estimating fiscal policy reaction functions for the period 1999-2019. Inclusion of the monetary policy stance in the fiscal reaction function, approximated by a shadow interest rate, is a relatively novel aspect...

We study the spillovers of large-scale asset purchases (LSAPs) in the U.S. on financial intermediation in the euro area using bank-level supervisory data and high-frequency identified policy surprises. Our detailed panel data permit us to trace the impact of LSAPs through bank balance sheets. We...

Unlike past high-inflation episodes, the euro area labour market remained surprisingly resilient during the inflation surge of the early 2020s. This paper investigates the drivers of this resilience by combining long-span euro area macroeconomic data (1970-2025) with a structural VAR analysis...

We use CPI micro data for nine euro area countries to document new evidence on consumer price stickiness in the euro area during the 2021-2024 inflation cycle. In 2022, the monthly frequency of price changes reached 12%, compared with an average of 8% over 2010-2019, roughly a...

We investigate the impact of structural shocks on the joint distribution of future real GDP growth and inflation in the euro area. We model the conditional mean of these variables, along with selected financial indicators, using a VAR and perform quantile regressions on the VAR residuals to...

This paper develops a novel empirical framework to analyse the drivers of business expectations in the euro area. Using harmonised data from the European Commission's business surveys for manufacturing, services, and construction, we build composite business expectations indices (BEI) for...

The article reviews the latest version of the proposal for a new Stability and Growth Pact of the European Union, as accepted by the European Parliament in April 2024. After summarising the main changes, the macroeconomic evaluation attempts to gauge whether the main goal of the Pact –...

The reform of the European fiscal rules came into force on 30 April 2024. The new rules, like the former ones, impose a depressive bias on domestic fiscal policies, leaving Member States' no fiscal room for manoeuvre. At the same time, the European Pillar of Social Rights sets ambitious targets...

What has led to the growing disillusionment with the European project? What have we learned from the process of Europeanisation, and can these lessons guide us in the present? To answer these questions, the article offers a long-term view of the diverging trajectories of Central and Peripheral...

This paper examines the rise of non-bank financial intermediaries (NBFIs) and its implications for financial stability and monetary policy transmission in the Euro Area and the United States. While the U.S. financial system has long been market-based, the Euro Area has experienced a striking...

This study focusses on the transmission of carbon pricing mechanisms in shaping trade dynamics between the Eurozone and key partners: the USA and China. Using Bayesian variable selection methods and a Time-Varying Structural Vector Autoregressions (TV-SVAR) model, the research identifies the key...

Public debt has increased steadily over the years, leaving many countries at risk of debt distress and even pushing some to default. This paper analyses the impact of sovereign default on post-default debtto-GDP ratios in 144 countries from 1980 to 2019. Applying the entropy balancing method, we...

In the ECB's Survey of Professional Forecasters (SPF) for the fourth quarter of 2025, expectations for headline HICP inflation were revised slightly upwards for 2025 but remained unchanged for 2026, 2027 and the longer term. Expectations for core inflation expectations, as measured by the HICP...

In the ECB's Survey of Professional Forecasters (SPF) for the fourth quarter of 2025, expectations for headline HICP inflation were revised slightly upwards for 2025 but remained unchanged for 2026, 2027 and the longer term. Expectations for core inflation expectations, as measured by the HICP...

The Eurosystem's digital euro project aims to adapt central bank money to the digital age, addressing the current challenges of the European payments ecosystem. As payment habits evolve, the use of cash declines and digital transactions become the norm, the need for a public digital means of...

In the ECB's Survey of Professional Forecasters (SPF) for the third quarter of 2025,1 expectations for headline HICP inflation were revised downwards for 2025 and 2026 but remained unchanged for 2027 and the longer term. At the same time, core inflation expectations, as measured by the HICP...

This study reviews new perceptions of an imminent decline of the international role of the US dollar and implications for the euro. It considers developments in international reserves, invoicing, debt and payment systems. Strengths and weaknesses of the US and euro area economies are discussed...

This study reviews new perceptions of an imminent decline of the international role of the US dollar and implications for the euro. It considers developments in international reserves, invoicing, debt and payment systems. Strengths and weaknesses of the US and euro area economies are discussed...

This publication evaluates various real-time GDP nowcasting models for the euro area and six member countries (Belgium, Germany, Spain, France, Italy, and the Netherlands) using recent data from 2021 to 2024. It compares individual models and model averages at different estimation points,...

The Labour Market and Wage Developments in Europe report provides an in-depth analysis of recent labour market and wage developments in the EU, the euro area and Member States, primarily from a macroeconomic perspective. This year's report takes a deeper look at one of the most pressing issues...

Increasing geopolitical tensions and trade fragmentation are challenging the resilience of global value chains, by undermining the collaborative networks on which they depend. As countries impose trade restrictions or become less reliable partners, companies may reconfigure their supply chains,...

This study introduces a novel approach to dictionary-based sentiment analysis that extracts valuable insights from economic newspaper articles in the euro area without requiring article translation. We develop sentiment indices that accurately measure economic, labour, and inflation perceptions...

We examine how labor market institutions shape monetary policy transmission in euro area countries. A theoretical model suggests that higher union density flattens the Phillips curve, amplifying output responses while dampening the inflation effects of monetary shocks. This is empirically...

This paper develops a world economy HANK model for the Euro Area (EA) Core and Periphery, which captures key features of EA cross‐ and within‐country heterogeneity, to study debt target reforms. We show that fiscal consolidation under the current EA institutional arrangements is quite costly...

The triple shocks of the financial crisis, sovereign debt crisis, and COVID-19 pandemic have exerted significant impact on the financial markets in the Eurozone. Since the 2008 recession, the European Central Bank (ECB) has implemented an array of unconventional monetary policies (UMPs). These...