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Andrei Sterescu

@andreisterescu.bsky.social

320 followers 350 following 190 posts

Economist @ec.europa.eu ECFIN | Formerly @ecb.europa.eu | European 🇪🇺 and International Economic Policy | Views are my own and do not represent those of my employer

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Andrei Sterescu @andreisterescu.bsky.social · Nov 22

I made a list of academics, policy analysts, and journalists that I regularly follow who post on EU affairs, politics, and economics.

bsky.app/profile/did:...

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Reposted by Andrei Sterescu

Jacob Edenhofer @jacobedenhofer.bsky.social · 10d

3. Delgado-Vega, Álvaro, and @bartonelee2.bsky.social. 2024. ‘When Growth Leads to Zero-Sum Conflict’. t.co/MjBZ9BUCI3

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Abe Newman @abenewman.bsky.social · 11d

1/This is Transatlantic leadership! In historic move, German Chancellor Merz calls out US: “democracy is under pressure, freedom of expression is being questioned, and the independence of the judiciary is being repressed“.
www.reuters.com/technology/g...

Germany's Merz criticises US' fundamental shift from following rules

German Chancellor Friedrich Merz criticised the United States on Friday for no longer following the rules, part of what he called a fundamental shift in Europe's transatlantic partner.

www.reuters.com

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Andrei Sterescu @andreisterescu.bsky.social · 10d

The authors are agnostic about the origins of trade imbalances and rather ask what they do inside gravity models when tradables have external economies of scale, but also conclude that persistent trade imbalances are beggar-thy-neighbour.

Andrei Sterescu @andreisterescu.bsky.social · 10d

…by suppressing household income and boosting saving/investment at home and pushing their excess production and capital abroad. Trade partners then absorb the demand shortfall via higher debt/un employment or by shrinking their tradables base.

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Andrei Sterescu @andreisterescu.bsky.social · 10d

The most recent discussion between @martinsandbu.ft.com and @michaelpettis.bsky.social also explains this distributional mechanism i.e. surpluses redistribute income and jobs toward surplus economies and away from deficit ones…

on.ft.com/4nSEjAk What we get wrong about China

What we get wrong about China

An interview with Michael Pettis

on.ft.com

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Andrei Sterescu @andreisterescu.bsky.social · 10d

Trade deficits on the other hand push resources toward local non-tradables, shrinking the traded base and dragging on productivity. Sectorally, that means export-oriented manufacturing and tradable services tend to expand in surplus economies and contract in deficit ones.

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Andrei Sterescu @andreisterescu.bsky.social · 10d

The main channel is that surpluses pull workers and capital into tradables (manufacturing and other exportable activities), which scales up those industries and lifts productivity and income.

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Andrei Sterescu @andreisterescu.bsky.social · 10d

A new IMF study shows trade surpluses tend to raise incomes in surplus countries and lower them in deficit countries.

doi.org/10.5089/9798...

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Mark Copelovitch @mcopelov.bsky.social · Sep 9

🇫🇷's debt/GDP ratio is not "soaring." It is than in 2020, & it's borrowing costs are lower than in 2023.

I know that The Narrative™️ cannot fail & everyone has their own political preferences over arbitrary debt levels (bsky.app/profile/mcop...), but don't print lies in the newspapers, etc.

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Nicolai von Ondarza @nvondarza.bsky.social · 29d

For a (healthy?) dose of Euro-pessism, here is an interesting look by @codendahl.bsky.social on the economic policies of the far/hard right and what their increasing access to power might mean for Europe:

The hard right’s plans for Europe’s economy

It has moderated, but offers little hope of growth-boosting reform

www.economist.com

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Reposted by Andrei Sterescu

Finbarr Bermingham @fbermingham.bsky.social · 29d

The EU's strategic foresight report 2025 is out and it rings the bell for a "change in the global order"

"We're witnessing the erosion of the rules-based international order & fracturing of the global landscape... a return to the previous status quo seems increasingly unlikely"

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Sander Tordoir @sandertordoir.bsky.social · Sep 2

Not sure that some in Germany understood that more issuance of their own would imply more market discipline on France.

Not sure some in France fully realised that Germany's big fiscal experiment also has sharp downsides for them.

Sander Tordoir @sandertordoir.bsky.social · Sep 2

Scenario on.

Part of France’s fiscal woes: more German bund supply potentially means less OAT demand: investors often bought the latter to get core eurozone exposure — bunds were scarce.

Not as scarce anymore going forward as Germany issues more debt.

Profligate Germany disciplines France.

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Michael Pettis @michaelpettis.bsky.social · Sep 2

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FT: "Developing countries are moving out of dollar debts and turning to currencies with rock bottom interest rates such as the Chinese renminbi and Swiss franc."
www.ft.com/content/36f8...

Developing countries swap out of dollar debt to cut borrowing costs

Sovereign borrowers are turning to lower interest rates in currencies such as the Chinese renminbi and Swiss franc

www.ft.com

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Reposted by Andrei Sterescu

Paweł Tokarski @tokarski.bsky.social · Aug 25

German households hold €3.4 trillion in cash and low-interest bank deposits.
www.ft.com/content/f1cb...

Germany’s pensions crisis: can €10 a month change how people invest?

Europe’s largest economy offers the young a subsidy to invest in equities as public retirement scheme creaks

www.ft.com

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Andrei Sterescu @andreisterescu.bsky.social · Aug 19

Overall, the EU-financed/EU-coordinated fiscal policy yields larger and more even GDP and convergence effects than nationally financed/managed variants precisely because it moves resources to where multipliers are highest and chooses projects whose payoffs don’t stop at the border.

Andrei Sterescu @andreisterescu.bsky.social · Aug 19

Shared EU financing implicitly equalises across countries (richer members shoulder more of the bill), which boosts the overall macro impact and helps poorer regions catch up. EU-level coordination also internalises cross-border spillovers.

Andrei Sterescu @andreisterescu.bsky.social · Aug 19

Authors simulate fiscal interventions under different “who-pays/ who-coordinates” setups over a 20-year horizon for a portfolio of cohesion policy-type investments (EU-wide financing vs. each country pays its own bill and EU-level allocation that internalises spillovers vs. national allocation).

Andrei Sterescu @andreisterescu.bsky.social · Aug 19

Does fiscal policy deliver more growth and convergence when it is financed and coordinated at the EU level, as opposed to being paid for and run nationally?

www.sciencedirect.com/science/arti...

Fiscal federalism and Cohesion Policy in the European Union NUTS-2 regions

We contribute to the debate on the implementation of fiscal policy in a supranational federation by examining the role of financing mechanisms and int…

www.sciencedirect.com

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Reposted by Andrei Sterescu

Isabella M. Weber @isabellamweber.bsky.social · Aug 8

Germany inscribed austerity in its constitution. The “debt brake” is so rigid that The Economist has called it an instrument of “self harm”. Reform is overdue.

I’m honored to be appointed by the Finance Ministry to serve on the expert commission in charge of fiscal rules.

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Sander Tordoir @sandertordoir.bsky.social · Jul 28

Europe negotiated the EU-US deal from weakness—and it shows.

The 15% tariff was already the de facto rate for the past few months (10% Liberation Day tariffs + ~5% MFN). It beats 25% on key sectors.

But locking it in permanently? What was unthinkable a year ago is now the new baseline.

1/

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Nicolai von Ondarza @nvondarza.bsky.social · Jul 28

I think European leaders - both national and in the EU - are underestimating what it will do to their publics to be humilated by Trump.

Like the NATO summit and Rutte's 'Daddy' strategy, mabye the outcome could have been worse. But losing pride and being humilated is also a price that is paid.

Simon Nixon @nixonsimon.bsky.social · Jul 28

My latest on the spectacularly one-sided EU-US trade deal.

Europe's Surrender

Thoughts on a spectacularly one-sided trade deal between the EU and US

open.substack.com

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Andrei Sterescu @andreisterescu.bsky.social · Jul 28

The EU should have been in a position to extract more meaningful concessions. If it never probes the limits of its strength it will never discover where they truly lie and it will continue to be outmaneuvered on the international stage.

Andrei Sterescu @andreisterescu.bsky.social · Jul 28

The EU is the world’s second-largest economy and the leading exporter and importer of manufactured goods and services. It also accounts for some 16% of global trade and nearly 21% of global GDP with EFTA.

Andrei Sterescu @andreisterescu.bsky.social · Jul 28

By failing to test and push the boundaries of our market power, the EU risks perpetually seeing itself and being seen by others as lacking both the will and the ability to defend its interests.

Andrei Sterescu @andreisterescu.bsky.social · Jul 28

The trade “deal” with the US is a missed opportunity for the EU to leverage the full extent of the regulatory and institutional capacity it has built in the past few years to exert economic influence on the world stage.

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