The Elephant in the Room Is Spain, Not Italy
Auerback, Marshall. Another day and the markets remain fixated on whether Greece comes to a “voluntary” arrangement with its creditors. The key word is “voluntary” because the myth of “voluntary compliance has to be sustained so that those deadly credit default swaps avoid being triggered. Πηγή: EconoMonitor πλήρες κείμενο
Don’t let the euro-area crisis go east
Bénassy-Quéré, Agnès, He Fan, Kawai, Masahiro, Tae Joon Kim, Yung Chul Park, Pisani-Ferry, Jean, Vines, David & Yongding Yu. On Thursday 2 February Chinese premier Wen Jiabao signalled intention to move towards helping the euro area extricate from its trouble and declared that China was “investigating and evaluating concrete ways in which it can, via the […]
Get the Hellas out of here
CITI economists Willem Buiter and Ebrahim Rahbari write: First, we raise our estimate of the likelihood of Greek exit from the eurozone (or ‘Grexit’) to 50% over the next 18 months from earlier estimates of ours which put it at 25-30%. Second, we argue that the implications of Grexit for the rest of the EA […]
The Greek Vise
Krugman, Paul. How much is the troika demanding from Greece? How tight is the squeeze? Here’s a look based on the most recent IMF report. Πηγή: The New York Times πλήρες κείμενο
Capturing the ECB
Stiglitz, Joseph. Nothing illustrates better the political crosscurrents, special interests, and shortsighted economics now at play in Europe than the debate over the restructuring of Greece’s sovereign debt. Germany insists on a deep restructuring – at least a 50% “haircut” for bondholders – whereas the European Central Bank insists that any debt restructuring must be […]
Europe’s new fiscal compact treaty does not outlaw Keynesianism and is a stepping stone to more progress
Kirkegaard, Jacob Funk. Europe’s new fiscal compact is seen by some as the death of Keynesian government spending. This column argues that such analysis is simply wrong. It says that there is still room for government spending in extreme situations, but that there are now more safeguards to maintain stability, reduce contagion, and placate German […]
Who’s afraid of sovereign bonds?
Merler, Silvia, Pisani-Ferry, Jean. The crisis has underlined the strong interdependence between the euro-area banking and sovereign crises. To understand the role domestic banks have played in holding sovereign debt, a breakdown of government debt by holding sectors is required. The data shows that at the start of the crisis, most continental euro-area countries were characterised […]
Austerity under Attack
Gros, Daniel. Europe seems to be obsessed with austerity. Country after country is being forced by either the financial markets or the European Union to start cutting its public-sector deficit. And, as if this were not enough, 25 of the 27 EU member states have just agreed on a new treaty (called a “fiscal compact”) […]
What Europe might look like without the Eurozone and EU
Frey, Bruno. What will happen if the euro collapses? For many people, the answer is unmitigated disaster. But this column argues that to identify the euro, the EU, and Europe as one, as many politicians like to do, is totally misleading. A possible demise of the euro and the EU can be seen as a […]
A blueprint for Germany to save the eurozone
Zoellick, Robert. For almost 60 years, Germans have maintained that it is their responsibility to participate in a modern Europe. Today, Germany’s responsibility is to lead in saving that Europe. This shift is not easy for Germans, who have often been urged to step forward, only then to be criticised for aggressiveness. But no other […]