Ben Southwood’s comments on eurozone QE feature in The Mail Online

Head of Research at the Adam Smith Institute, Ben Southwood, was quoted in The Mail Online on the eurozone’s decision to print 60 billion a month to fight deflation.

Ben Southwood, head of research at thinktank the Adam Smith Institute, said: ‘Quantitative easing cannot solve many problems, but there is precisely one it can tackle—deflation brought about by central bank incompetence, like that we are now seeing across the eurozone. That was what caused the Great Depression in the 1930s and easier money can reverse it.

‘What’s more, the structural problems economists have identified in Europe are very real. Even before the crisis, countries like Italy and France were hamstrung by tight labour market regulations that kept unemployment close to 10 per cent. Changing these can enhance growth in the short and long run, and QE should be combined with rigorous reform so that long-term growth can be achieved.’

Read the full article here.

Ben Southwood’s comments on wind power feature in The Yorkshire Post

Head of Research at the Adam Smith Institute, Ben Southwood, was quoted by The Yorkshire Post on the realities of wind farm power and productivity:

OFFSHORE WIND continues to have many critics. The Adam Smith Institute said: “It can never be a major part of our energy mix, the wind just doesn’t blow enough.

“Since we don’t have heap, effective ways of storing energy, more reliance on wind means increasingly starting up and closing down fossil fuel plants to back up intermittent and unreliable towers to guarantee supply.”

As the EU contemplates imposing a tax on US internet firms, is this a step backwards? – Charlotte Bowyer argues yes, in the CityAM Forum

Head of Digital Policy at the Adam Smith Institute, Charlotte Bowyer, argues that imposing a tax on US internet firms would be destructive to the revenue and innovation of digital firms in the CityAM Forum:

Europe is lagging far behind the US in terms of digital innovation. The US’s technology policy champions experimentation and risk, with the presumption that entrepreneurs should be able to try new things without first seeking permission.

In Europe, the opposite is the case. The proportion of people engaged in entrepreneurial activity is also far lower, and even successful startups tend to be smaller and slower-growing. If the EU is serious about challenging America’s tech dominance, it should cut red tape and taxes, resist the urge to regulate more, and champion entrepreneurship.

Clobbering successful foreign firms that contribute billions to Europe’s economy may raise revenue, but it will do nothing to address countries’ underlying uncompetitiveness. And while some digital firms may be able to handle a higher tax bill, it’s hard to see why they’d put up with such a petulant host. The EU’s politics of envy isn’t just ugly – it’s destructive too.

Read the full article here.

Press Release: Eurozone QE is welcome, but governments must reform too

For further comments or to arrange an interview, contact Communications Manager Kate Andrews: kate@adamsmith.org / 07584 778207

Commenting in advance of the ECB’s quantitative easing package expected today, Head of Research at the Adam Smith Institute, Ben Southwood, said:

Finally! The European Central Bank has started to acknowledge its responsibility for the catastrophic depression in Greece, and the hardship in Spain, Portugal and Italy. It has kept money far too tight for far too long.

Quantitative easing cannot solve many problems, but there is precisely one it can tackle—deflation brought about by central bank incompetence, like that we are now seeing across the Eurozone. That was what caused the Great Depression in the 1930s and easier money can reverse it.

But there are reasons to be sceptical: temporary QE that is not tied to a commitment to achieve a target (such as the ECB’s 2% consumer price inflation goal) has sometimes turned out to be ‘pushing on a string’. Without being tied to a clear goal, QE can fail.

What’s more, the structural problems economists have identified in Europe are very real. Even before the crisis, countries like Italy and France were hamstrung by tight labour market regulations that kept unemployment close to 10%. Changing these can enhance growth in the short and long run, and QE should be combined with rigorous reform so that long-term growth can be achieved.

Notes to editors:
For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207.

The Adam Smith Institute is an independent libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.