Europe: The Current Situation and the Way Forward

Europe: The Current Situation and the Way Forward

Wednesday, April 15, 2015
6:00 pm - 7:30 pm

International Affairs Building, Room 1501

Contact: CGEG

The 2015 Leaders in Global Economic Governance Lecture featured an address by Wolfgang Schäuble, Germany's Federal Minister of Finance, titled Europe: The Current Situation and the Way Forward. The address was followed by a panel discussion with Alessandra Casella, Edmund S. Phelps, Joseph E. Stiglitz, and Jan Svejnar. 

Welcome and Introductory Remarks:

Merit E. Janow, Dean, School of International and Public Affairs, Columbia University, and Professor of Professional Practice in International Economic Law & International Affairs

John Coatsworth, Provost of the University and Professor of International and Public Affairs and of History, Columbia University

Peter Jungen, Chairman of Peter Jungen Holding GmbH

Discussants:

Alessandra Casella, Professor of Economics, Columbia University

Edmund S. Phelps, 2006 Nobel Laureate in Economics and Director, Center on Capitalism & Society at Columbia University

Joseph E. Stiglitz, 2001 Nobel Laureate in Economics and University Professor, Columbia University

Jan Svejnar, James T. Shotwell Professor of Global Political Economy & Director, Center on Global Economic Governance, Columbia University

This event was co-sponsored with the World Leaders Forum.

To read Minister Schäuble's full speech, please click here.

To read remarks by Professor Phelps, please click here.

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On April 15th, the Center on Global Economic Governance, together with Columbia University’s World Leaders Forum hosted the highly anticipated address by Dr. Wolfgang Schäuble, Germany’s Federal Minister of Finance, on “Europe: The current situation and the way forward”.

Minister Schäuble, in his address on the current crisis, past and present european fiscal policies and labour dynamics, drew on his extensive experience as a politician. He is a member of the German Bundestag since 1972, the longest serving member to date and former Federal Minister of Interior during the German Reunification Period in 1990.

In his address, Minister Schäuble pointed out that “for more than two decades, economic policy in industrialized countries tried to mediate recessions and financial market crises
by increasing the leverage of the public and private sector and multiplying the money supply. These policies were necessary to cope with the immediate crises, but they tend to sow the seeds for the next one”. He endorsed an alternative model to “the repetitive cycles of credit booms followed by busts” which is a “model of moderate, but sustained growth - defined as steady, environmentally-friendly and inclusive growth”.

The address by Minister Schäuble to the Columbia University Community was followed by a panel discussion moderated by Professor Jan Svejnar, Director of the Center on Global Economic Governance and participants Professor Joseph Stiglitz, Professor Edmund Phelps and Professor Alessandra Casella.

Amongst other recent economic developments in Europe, a strongly debated controversial topic was Minister Schäuble’s dismissal of the “European austerity” argument. He pointed out “that the absolute level of debt in Europe is higher than before the crisis began. And the debt to GDP ratio in the Eurozone is higher than ever before. The fiscal policy guideline is
that under normal economic circumstances
the rate of public expenditure should not rise faster than the nominal growth rate.”

In the following panel discussion Professor Stiglitz criticized that whilst “all countries need structural reforms, the fundamental problem is the structure of the euro-zone”. He pointed out that “many [European] reforms contribute to a weaker aggregate demand and a weaker economy. And because of the destruction of human capital, they weaken the potential for future growth”.

PEPM students had the privilege to attend Minister Schäuble‘s speech as part of their economic policy curriculum. The event culminated in the rare chance for students to address their own questions to Minister Schäuble.

To read Minister Schäuble's full speech, please click here.

To read remarks by Professor Phelps, please click here.

- Elisabeth Sedmik