SAFE Policy Lecture: Lorenzo Bini Smaghi
Title: Europe becoming conventional, finally
Speaker: Lorenzo Bini Smaghi (Chairman of the Board, Société Générale and Former Member of the Board, ECB)
Moderator: Hans-Helmut Kotz (Research Center SAFE and CFS)
A good two weeks ago, the ECB launched its program of quantitative easing, the purpose being to get inflation in the euro area back to the ECB’s objective. Moreover, as an intended side-effect, this policy is also about mending the impaired monetary transmission mechanism. QE is a set of tools which have become conventional in fighting deflation in Japan as well as the UK, the US, or, for that matter, Switzerland. And, in the European case, it is an instrument whose time has come – and which will be more effective than has been generally expected. But, Europe is becoming conventional in more ways – it is slowly making its labor, but also its goods markets, more flexible. And, fiscal policy will be forced, by binding rules, to account for the European dimension. The fiscal compact is not as bad as it seems. Europe is becoming more conventional, finally.
Lorenzo Bini Smaghi is currently Visiting Scholar at Harvard’s Weatherhead Center for International Affairs as well as at the Istituto Affari Internazionali. He is also Chairman of the Board of SNAM as well as Chairman of the Board of Société Générale. From June 2005 to December 2011 he was a Member of the Executive Board of the ECB. During that period he acted as G7 and G20 Deputy for the euro area. He started his career as an economist in the research department of the Banca d’Italia (in 1983) and became Head of the Policy Division of the European Monetary Institute (in 1994) and then Director General for International Affairs in the Italian Treasury (in 1998). He holds a Bachelor’s Degree in Economics from the Université Catholique de Louvain (Belgium), a Master’s degree from the University of Southern California; and a Ph.D from the University of Chicago. He is author of numerous articles and several books on international and European monetary and financial issues.