Countries suffering from economic crisis have no recourse to normal adjustment mechanisms like devaluing or independent monetary policy tools. What’s more, there is no automatic redistribution through a big federal budget, and capital flows are likely to be perverse, going from the weak to the strong. On top of that, all the adjustment pressure is […]
Entries Tagged as 'Eurocrisis'
April 12th, 2018 · Comments Off on The Euro Tends To Worsen Economic Crisis, Can Anything Be Done About That?
December 5th, 2017 · Comments Off on Someone Should Explain To The Germans And Dutch How The Euro Works In Their Favor
The workings of the European Monetary Union are still not well understood by many citizens, especially in countries which are the main beneficiaries of the euro. The system is rife with dysfunctions that are only papered over by economic tailwinds and vigorous ECB action. But fundamentally, not much has changed and the system is very […]
August 11th, 2017 · Comments Off on The Next Eurozone Battle Is Shaping Up
The structural design deficiencies in the eurozone have been papered over by the cyclical tailwinds in the economy and balming ECB action. But at the first sight of headwinds, these will reassert themselves with a vengeance. Remedial action is already very difficult as it involves a leap forward in European integration for which there is […]
May 30th, 2017 · Comments Off on The Hard Euro Is An Assault On Democracy
The euro is basically unbreakable as the cost of leaving has increased. The amount of discipline necessary to keep the euro together is unprecedented. And countries have shown willingness to undergo that discipline, and others to function as the disciplinarian. This means that economically, the euro is a lot stronger than many probably think. However, […]
March 31st, 2017 · Comments Off on The Euro Can’t Break Up
The euro is highly dysfunctional, it confers few economic benefits, has been an economic disaster and is a source of political problems within the EU. It was never easy to leave the euro, but on balance, for countries like Greece, Portugal, and Italy, it seemed a good idea. But new collective action clauses in bonds […]
March 3rd, 2017 · Comments Off on Will Italy’s Lost Decades End With A Bang?
Italy’s economy isn’t expected to return to its 2007 output level until the mid 2020s. While Italy would benefit from an Italian Margaret Thatcher, there are few good options left to save its economy. Not even leaving the euro, now openly discussed, is without problems. Meanwhile, debt and banking problems persist and the risks abound. […]
March 3rd, 2017 · Comments Off on If You Kick The Can Long Enough, It Becomes A Bomb
Greek debt is simply unsustainable, even the IMF says so. The only way to have a chance of defusing this time bomb is to exchange debt relief for the IMF reform program but politics and discord are preventing this. There is a toxic mix brewing with other countries on the brink and looming political instability […]
December 1st, 2016 · Comments Off on The Indicator That Could Spell Trouble
September 8th, 2016 · Comments Off on The Eurozone Is Certain To Fail, According To Stiglitz
August 28th, 2016 · Comments Off on The Win-Win Eurozone Cure