Germany

The Puzzle of the 2012 Greek Elections

May 8, 2012 by

With the Greek Parliamentary election behind us—likely the first of at least two such contests in this political season—we need to take stock of the situation and separate myth from fact. My objective is to make sense of the electoral results by describing and analyzing the Greek political system in both its historic and nascent forms. The particulars of the bailout have been widely discussed elsewhere in the press and policy circles, and I will refer to them only in the ways in which they inform the topic.

ILO Urges Worker-Friendly Recovery Policies

April 30, 2012 by

Although economic growth has resumed in much of the world since the 2008 financial crisis, the global unemployment situation remains alarming and could worsen, according to the International Labour Organisation (ILO). European governments, in particular, should adopt more worker- friendly approaches in dealing with fiscal austerity, according to the agency’s “World of Work Report 2012″ that was released here and at its headquarters in Geneva Sunday.

Spain is the New Greece

April 29, 2012 by

Nearly one Spaniard in four is unemployed, according to data released on Friday, as the country’s economic and financial predicament prompted a government minister to talk of a “crisis of enormous proportions”. The data from the National Statistics Institute showed 367,000 people lost their jobs in the first three months of the year. At this pace, Spanish job losses are equivalent to 1 million per month in the United States.

Why Europe is not yet ‘A Culture of Peace’

April 5, 2012 by

It is undoubtedly true that the greatest unacknowledged achievement of the European Union (EU) is to establish ‘a culture of peace’ within its regional enclosure for the 68 years since 1944. This has meant not only the absence of war in Europe, but also the absence of ‘war talk,’ threats, crises, and sanctions, with the single important exception of the NATO War of 1999 that was part of the fallout from the breakup of former Yugoslavia.

Ireland’s Debt and the Heart of St. O’Toole

March 16, 2012 by

Someone has pinched the heart of St. Lawrence O’Toole, and thereby hangs a typical Irish tale filled with metaphors, parallels, and some pretty serious weirdness. Who done it? The suspects are many and varied. Could the heist from Dublin’s Christ Church Cathedral have been engineered by the infamous “troika” of the European Commission, the European Bank, and the International Monetary Fund?

Trouble in Euro Zone Paradise?

February 24, 2012 by

The Europeans evidently thrive on instability and the ongoing threat of systemic risk. There is nothing else to explain the renewed hardline stance adopted by both Mario Draghi of the ECB and the German government on fiscal policy, just as the markets appeared to be calming down again.

The Post-WWI Years and the 21st Century

February 24, 2012 by

The world today and the world immediately before the Second World War are strikingly similar. The military and foreign policy of the United States today is comparable to the close-minded introversion of isolationism. European countries are teetering on the brink of economic collapse. The German industrial juggernaut has reignited. The announced rearmament of Russia resembles that of the former Soviet Union, during and immediately after the First World War.

Europe Must Choose Between an Iranian Oil Embargo and Default

February 20, 2012 by

Experts say that if Iran stops its oil deliveries to the European Union, the EU will need several weeks to find alternative suppliers. Britain and France, to which Iran stopped deliveries on Saturday, February 19, are unlikely to be hit hard, but Greece, which is tottering under the weight of its economic problems and is the largest importer of Iranian oil, will most likely have to declare a default.

Greece: A Default is a Better Outcome Than the Deal on Offer

February 13, 2012 by

Pick your poison. In the words of Greek Finance Minister Evangelos Venizelos, the choice facing Greece today in the wake of its deal with the so-called “Troika” (the ECB, IMF, and EU) is “to choose between difficult decisions and decisions even more difficult. We unfortunately have to choose between sacrifice and even greater sacrifices in incomparably more dearly.” Of course, Venizelos implied that failure to accept the latest offer by the Troika is the lesser of two sacrifices.

Austerity in, Euro out – Is this Greece’s future?

February 13, 2012 by

As Greek politicians approved a tough austerity package amid fierce protests, one question dominates: is an orderly exit from the Eurozone available for Greece? And just what might be the consequences? Recently Citibank put the probability of such a Greek withdrawal in the next 18 months at 50%. Greece is seeking to finalise a deal with bank creditors on Greece’s private sector borrowings which would cancel €100 billion euros ($A125 billion) of its sovereign debt of over €350 billion.

Breaking Up is Hard to Do

February 10, 2012 by

Nobody likes getting dumped on an anniversary. January marks the ten-year anniversary of the euro, whose introduction was supposed to herald an era of not just economic prosperity, but closer integration across the continent. But as the financial crisis grips Europe, enthusiasm for the euro is waning quickly among the public in many member states, and nations that had once pledged to adopt the currency are getting cold feet.

Anschluss Economics - The Germans Launch A Blitzkrieg on the Greek Debt Negotiations

January 31, 2012 by

News stories continue to suggest that Greece once again appears on the verge of reaching a deal with its private sector creditors on how much of a loss they would be willing to accept on their bond holdings. The latest numbers suggest a 70% write-down. A pretty striking comedown for what is supposed to be a “voluntary default” and, hence, not subject to the triggers of a credit default swap on Greek debt.

Draghi’s Stealth Plan

December 20, 2011 by

Mario Draghi has settled on a plan to pull the EU banking system back from the brink and hammer down sovereign bond yields at the same time. The European Central Bank chief has announced that he will launch an emergency liquidity assistance program on December 21, that will provide “limitless” loans to struggling banks at rock-bottom rates (1 percent) for up to 3 years.

Europe’s economies must pull together before they fall to pieces

December 6, 2011 by

The announcement by credit ratings agency Standard & Poor’s overnight that it could downgrade the triple-A rating of Europe’s debt rescue fund has battered market confidence, which had been buoyed by a new package of austerity measures by the Italian government. The Italian stock market made gains on Monday before entering a phase of volatility and instability on Tuesday, after S&P announced that France, Germany, and 13 other Eurozone countries were put on review for credit downgrades.

Will an Incompetent European Central Bank be Allowed to Wreck the World Economy?

December 5, 2011 by

The world is eagerly waiting to see if the European Central Bank (ECB) will take the steps needed to save the euro. Specifically, is the ECB prepared to act as a central bank and guarantee the sovereign debt of the countries in the eurozone as the lender of last resort ordinarily does in a crisis? If not, there is little doubt what the outcome will be. The austerity being imposed on country after country will slow GDP growth and throw workers out of jobs.

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