Political Economy

Below is the full text of the European' Commission's Memorandum of Understanding with Spain regarding the bailout of the Spanish banking sector released earlier today.

A recent story in German magazine Der Spiegel highlights the efforts in 2005 of German Chancellor Gerhard Schroeder to relax the penalties for deficits in breach of the euro zone's stability and growth pact. It is a good review of the…

Whatever can be said for and against Barclays and Bob Diamond, the story is in danger of exhausting itself at the wrong link in the chain. It has sidelined BubbleTV's around-the-clock coverage of Facebook. Mark Zuckerberg's dog walker has…

The EU Summit decision on banking union is being questioned by some economists in Germany. This column argues that a banking union is a critical step in ending the EZ crisis and building a more stable EZ financial architecture. It is a…

Liberalizing interest rates means that those sectors of the economy who have benefitted from very low lending rates – SOEs, local and municipal governments, real estate developers, and other large borrowers – are likely to find many reasons…

This week's newsletter will focus on Europe again as this morning the European summit has produced significant changes in European economic policy. Spanish Prime Minister Rajoy and Italian Prime Minister Monti threatened to 'block…

I was on RT's Capital Account on Monday afternoon, talking about the euro crisis yet again. The video is below but I have a few comments before you watch it. In the video, I say Europe can continue dithering for quite a while. There is…

This week I am doing the weekly newsletter in two parts, both outside the paywall. This is part one. As Charles Wyplosz has recently written, the euro zone's rescue strategy adopted in May 2010 has failed. Like his column, this column…

The EZ rescue strategy adopted in May 2010 failed to restore debt sustainability, avoid contagion, or reduce moral hazard. This column argues that a volte face is needed. The debt of Greece, Portugal and Italy – and perhaps Ireland, Spain…

I was on the Alyona Show panel these past two Mondays talking to Alyona and Reason's Anthony Randazzo about the debt crises in the US and Europe. As much as we tried to find something we could disagree on, we ended up agreeing a lot in both…