Tag archive for ‘euro’
A Year of Missed Opportunities for the EU
In politics it is August rather than January when people look back at the last year and take stock of what has or has not been achieved. Hence, as I have been soaking up the Spanish sun, my mind has been replaying events from the last twelve months. Last summer, I had great optimism for [...]
Who is reforming Europe’s Economic Governance?
After the crisis, European policy makers are now crafting reforms to strengthen the Union’s economic governance. It is an opportunity to make Europe more democratic. Instead, conservatives increase the democratic deficit under the pretext of closing budget deficits. This will not work. The European Commission has proposed measures to enhance economic policy coordination. ECB President [...]
Europe’s Federalism Debate Revived
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 ECB is not doing its Job – Even on its own Definition
The mandate of the European Central Bank has been a source of controversy since before the start of monetary union in 1999. A battle raged between those who wanted to focus exclusively on ‘price stability’ and those arguing for a broader mandate, taking in growth and employment on a formally equal footing, as is the [...]
Leaving the Euro: What’s in the Box?
Rumours of Eurozone break-up are mounting. This column argues that exiting a strong currency for a weak one poses almost unthinkable challenges, from the redenomination of contracts and the imposition of bank restrictions to the restructuring of external debt and limiting of capital mobility. Lessons from Argentina illustrate just how radical the changes would need [...]
The current Crisis reveals both: The Importance and the Limitations of the transnational Coordination of Collective Bargaining Policies
The deepening of economic integration of the European Union, which gained further momentum with the introduction of European Monetary Union and the ‘eastern’ enlargement of the EU, has been a major driving force for European trade unions to intensify their efforts to coordinate collective bargaining policies across borders. The rationale for unions to embark on [...]
Competitiveness through Cuts?
A standard piece of textbook economics is that if a country cannot devalue, it must cut real wages to increase labour productivity and make its exports more attractive. Indeed, it is argued quite plausibly that the main reasons for Germany’s successful export performance in the past decade is that real wages have remained flat, despite [...]
Germany’s Europe Deficit
Germany used to be at the heart of European integration. Its statesmen used to assert that Germany had no independent foreign policy, only a European policy. After the fall of the Berlin Wall, its leaders realized that German reunification was possible only in the context of a united Europe, and they were willing to make [...]
Europe’s Policymakers are rushing towards the Edge of the Cliff
Lemmings are cute, family-oriented, apparently well-adjusted creatures who, most of the time, live more or less happily in the tundra. Although it is an urban myth that they commit collective suicide to control population, they certainly experience periodic mass frenzies. Driven by some deeply rooted instinctive yearning, they swarm off in search of salvation, looking [...]
Eurozone Governance: What went wrong and how to repair it
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 [...]
Europe’s Keynesian Turn?
The Euro-crisis is transforming the continent radically. One of the consequences of the decisions taken by the European Council on May 9 could be the end of the conservative ordo-liberal German model of social market economy. The European Central Bank may become the best ally of Europe’s left. As part of the €750 bn. rescue [...]
Our Post-Modern Crisis
On the weekend of May 7-9, the European Union gazed into the abyss of historical failure. The fate of the euro was at stake and with it European unification as a whole. Not since before the signing of the Treaty of Rome in 1957 had Europe been in such grave political danger. On the surface, [...]
