debating progressive politics in Europe and beyond
Financial crises tend to start abruptly and end by surprise. Three years ago, the euro crisis began when Greece became a cause for concern among policymakers and a cause for excitement among money managers. Since the end of 2012, a sort of armistice has prevailed. Does that mean that the crisis is over? By the [...]
It looks like a coordinated offensive: on September 6, the European Central Bank outlined a new bond-buying program, letting markets know that there were no pre-set limits to its purchases. On September 13, the United States Federal Reserve announced that in the coming months it would purchase some $85 billion of long-term securities per month, [...]
The blame game in Europe has not yet begun. An agreement between Greece and its private creditors and public lenders will enable it to meet its next debt repayment deadline of March 20. The Europeans should be commended for a significant step in the direction of realism. Private creditors have accepted a haircut of more [...]
For the third year in a row, the eurozone is the weakest link in the world economy. In 2010, attention was focused on responses to the crisis on the eurozone periphery – Greece, Portugal, and Ireland. In 2011, the crisis moved to the core, with Italy and Spain feeling the heat, and concerns mounting about [...]
A series of developments over the last few weeks have set in motion a downward spiral for the eurozone. Unless officials – especially German officials – act fast, the verdict of financial markets is bound to be ruthless. First, the eurozone has failed to turn the tide. Mario Draghi, President of the European Central Bank, was right [...]
France, which now holds the presidency of the G-20, has chosen reform of the international monetary system as its main priority for the Cannes summit in November. But is the issue worth the time and energy officials will devote to it? And where can such discussions lead? When French President Nicolas Sarkozy announced his G-20 [...]
The world was expecting Eurobonds to come out of last week’s Franco-German summit; instead, the eurozone will get economic governance. According to German Chancellor Angela Merkel and French President Nicolas Sarkozy, the great leap forward to the creation of Eurobonds would perhaps be the culmination of that process, but for the moment small steps remain [...]
You can always trust the Americans, Winston Churchill said, because in the end they will do the right thing, after they have exhausted all other possibilities. For the last 18 months, this has been Europe’s method for confronting its sovereign debt crisis as well: it has taken the necessary decisions, but always as a last [...]
For a year, European policymakers have been busy fixing bugs in the design of Economic and Monetary Union (EMU). As with defective software, they have introduced successive new versions of EMU at a frantic pace – only to discover remaining vulnerabilities shortly afterwards. After two summits in March, however, European officials claim to have produced [...]
This issue is of persistent concern for investors worldwide. Holders of European government bonds believed that they knew what they had bought. Sure, there was no such thing as a eurozone sovereign security. But German, French, Spanish, and even Greek bonds all carried roughly the same interest rate, so they were deemed equivalent. Investors now [...]
The crisis has revealed deep flaws in the Eurozone’s governance regime. This essay argues that EU leaders should address fundamental questions about the operational principles upon which the euro is based. Key choices for Eurozone leaders are the nature of the economic policy framework, the optimal degree of decentralisation, and the identification of reforms that [...]
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