Brinkmanship in Brussels, Sturm and Drachma for Greece and Europe
Kirkegaard, Jacob Funk. Brinkmanship has produced an early-morning deal in Europe to extend a new lifeline to Greece and clear the way for the biggest sovereign bond restructuring in history. This column takes a detailed look at the EU deal, the ongoing brinkmanship between the Eurozone and the IMF, and the general focus on austerity. […]
A Euro Sabbatical
Sinn, Hans-Werner. Under substantial external pressure, the eurozone’s crisis-hit countries are, at long last, bringing themselves to make painful cuts in their government budgets. Salaries are being slashed and public employees sacked to reduce new borrowing to a tolerable level. Πηγή: Project Syndicate πλήρες κείμενο
The Euro Prisoner’s Dilemma
Valiante, Diego. The last intergovernmental agreement among 25 countries and the ESM Treaty will set the ground for greater institutional coordination on fiscal policies among euro area member states. None of these decisions, however, will be able to pull the euro area out of this crisis. The eurozone is trapped in a classic prisoner’s dilemma. […]
The Dreary Dutch Economy In 2012
Dalton, Matthew. The European Commission expects Greece, Portugal, Spain and the Netherlands to be Europe’s weakest economies in 2012. Wait a minute. The Netherlands? That stalwart of the euro zone? The same Netherlands that’s lending billions of euros to Greece, Portugal and Ireland? Πηγή: The Wall Street Journal πλήρες κείμενο
Greece and Portugal: Similar fundamentals but different outcomes?
Gros, Daniel. While acknowledging that Portugal is far from being in the same dire straits as Greece in terms of its levels of public debt and deficit, Daniel Gros points out in this Commentary that excess private consumption is Portugal’s real problem. And if this problem is not addressed, he warns that the eurozone might […]
For Whom The Bailout Tolls
Hugh, Edward. “On an optimistic view, that a deal was struck implies that neither side was ultimately willing to risk a Greek exit because they recognise that no one fully understands all the ramifications of such a decision. Under this scenario, when pressure again builds, the authorities will do the same: let Greece remain in […]
Good and Bad Deficits
Skidelsky, Robert. “Deficits are always bad,” thunder fiscal hawks. Not so, replies strategic investment analyst H. Wood Brock in an interesting new book, The American Gridlock. A proper assessment, Brock argues, depends on the “composition and quality of total government spending.” Πηγή: Project Syndicate πλήρες κείμενο
Evidence for the Monetary View of the Eurozone Crisis
Some observers argue that the current problems in the Eurozone are actually the result of a monetary crisis not a sovereign debt crisis. They acknowledge there are structural problems with European currency union but point back to the failure of the ECB to stabilize and restore nominal spending to expected levels during the crisis of 2008-2009 […]
Googlenomics and how LTRO might have ended the euro crisis
Market Monetarists like David Beckworth have long argued that the European crisis is not really a debt crisis or a fiscal crisis, but rather a nominal crisis. The crisis has been triggered not by too much debt, but rather than by overly tight monetary policy and the resulting drop in nominal GDP. Πηγή: The Market […]
Who lost Greece?
Pisani-Ferry, Jean. Failing an agreement with its private creditors and public lenders, Athens will not be able to meet the next debt repayment deadline of 20 March. Every day which passes underscores the complexity of the negotiation and ratchets up the risk of it being too late to avert default. Even if, as is likely, […]