debating progressive politics in Europe and beyond
As had been expected, despite the dissention of the Bundesbank, the ECB has announced a programme of, in principle, unlimited purchases of euro area government bonds on secondary markets. Adding yet another acronym to the alphabet soup engendered by the crisis, the program is termed OMT – Outright Monetary Transactions – and will replace the [...]
The management of the crisis is based on the wrong assumptions. Goals are misunderstood, procedures are incorrect and thus the bust lasts for longer. Austerity has not yield the expected results. Therefore, many public policy makers are shifting towards growth by granting access to credit for families and SMEs to revitalise the economic activity. Spain [...]
Over the last four months, China has been claiming that it will help Europe’s financial woes by contributing billions of dollars to the International Monetary Fund (IMF). Recently the G20 finance leaders told Europe that, if the IMF is to fortify the eurozone financial facility, Brussels has to beef it up further. Such a warning [...]
For several months I have been saying that Ms Merkel was going to push Greece out of the Eurozone (EZ). That prediction I fear is about to become a nasty reality. With the deal on a private sector write down still not agreed, Roubini’s RGE Monitor reports the ‘troika’ as saying: whatever the result of [...]
Headlines the world over ‘agonise’, on behalf of Greece and Europe, on whether the (Private Sector Involvement) PSI+ negotiations will come to a conclusion. The presumption is that, if they succeed, Greece will be reprieved and Europe (with France and the EFSF having recently been downgraded) will buy some much needed extra time to put, at [...]
Standard and Poors (S&P) was right to downgrade the sovereign debt of nine euro area countries and to put virtually all of them on negative watch (implying a substantial probability of a further future downgrade). The chances of default remain very low (in the overall landscape of debt instruments that agencies rate) but they have [...]
I have just been sent a regular e-newsletter from DG Ecfin of the European Commission. It leaves me puzzled. As you would expect it deals primarily with the outcome of the European Summit. A headline claims: European leaders agree on immediate action to address market tensions The description of the immediate actions is as follows: [...]
Politicians have been praising the outcome of the latest euro summit as a real break-through. Stock markets across the euro area were up. However, the enthusiasm might be excessive. Upon closer inspection, the outcome will most likely not end the euro-crisis and parts of it might actually make it worse. The first point is the [...]
The Eurozone crisis plays on to a familiar tune. Finance ministers meet on the weekend only for markets to dismiss their efforts the following Monday. This column argues that Europe’s leaders have lost touch, that the ECB has the firepower but is not prepared to use it, and that the outcome of all this is [...]
Frank-Walter Steinmeier argues for political union in Europe and the harmonisation of taxes. The European Union is in the middle of the most serious crisis in its history, and everyone is looking to Berlin. We must show reliability, predictability and solidarity. The German Bundestag’s clear vote in favour of Europe produced a sigh of relief [...]
Is the eurozone stepping back from the brink? This might just be possible, because the emerging outlines of a new framework to resolve the ongoing sovereign-debt crisis contain a key component that was missing so far. Indeed, that component’s absence was behind this summer’s spreading financial crisis, which moved beyond small, peripheral countries like Greece, [...]
In the political discussions about the origins and causes of the current Eurozone debt crisis the rules of the Stability and Growth Pact often play a prominent role. Also yesterday, when the German Bundestag voted on the proposed Euro rescue fund, the Pact was regularly cited. Let me be clear: this discussion is misguided as the [...]
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