debating progressive politics in Europe and beyond
Sven Giegold (MEP for the German Greens) has an interesting comment piece in Handelsblatt: while focusing on Portugal, it is illustrative of much that is wrong with economic policymaking in Europe. He reports that 17 of the 20 largest Portuguese listed companies organise at least part of their activities in the form of holding companies [...]
The ECB announced a new programme yesterday under which it could buy unlimited amounts of short-term bonds on the secondary market to keep refinancing costs for crisis countries under control and ‘repair monetary policy transmission channels’ as ECB President Mario Draghi put it. The FT wrote: The European Central Bank on Thursday sent markets its [...]
Watching Mario Draghi trying to gradually out manoeuvre some of his colleagues in order to rescue the Eurozone has a certain intellectual fascination, as long as you forget the stakes involved. I’m not an expert on the rules of this game, so I’m happy to leave the blow by blow account to others, such as [...]
Solutions to the Eurozone crisis must balance the evils of austerity and moral hazard. This column argues that the blue/red Eurobonds proposal might just get this balance right. Any solution to the Eurozone crisis must meet two objectives. One is short run and the other is long run. Unfortunately they tend to conflict. The first [...]
Since December 2011 the European Central Bank (ECB) has pumped two waves of extra liquidity into the European banking system, in an effort to keep it afloat – and persuade backs to invest in sovereign debt. Yet Paul De Grauwe argues that these banks are still wracked with uncertainty, which may lead to further sell-offs of this [...]
It is often claimed that imposing a haircut (i.e. a partial default) on holders of Greek bonds is fair, sets incentives correctly, and avoids moral hazard. Haircut fans on Right and Left use slightly different arguments, but the basic point is the same. If you invest money, you must accept the risk of losses. If [...]
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