Political Economy

This is not a good day for Spain. The day began with the EU Commission revising its estimates for the Spanish economy. The contraction is now expected to be considerably deeper. Spain unveiled its new efforts to address the banking…

The long-held view in German policy circles has been that the European sovereign debt crisis is a clear indication that the stability and growth pact (SGP) was not sufficiently robust in addressing fiscal discipline. The ECB is now…

This chart was attached to a very good front page article in today's Wall Street Journal by Marcus Walker on How a Radical Greek Rescue Plan Fell Short. The article gives a blow-by-blow account on how the Greek crisis has unfolded and a…

Earlier this week I wrote a post called "Europe edges closer to the endgame" in reaction to the French and Greek elections. Today I want to expand on this for the weekly members' post. While I think we are finally arriving at the…

"The German government has, for the first time, released hundreds of pages of documents from 1994 to 1998 on the introduction of the euro and the inclusion of Italy in the euro zone."

we are seeing an ever shrinking number of people paying an ever greater portion of the taxes. Though they also are the ever shrinking number of people acquiring an ever greater portion of the wealth. There is little that matches the…

Later this week, I plan to write a more comprehensive post on the European sovereign debt crisis to incorporate what we have learned since the French and Greek elections. Here's a short preview of what I will have to say.

In 1921, the US, a creditor nation, was fighting boom time inflation and turned to 'austerity' to defeat it. Europe on the other hand was seeing a debt-laden deflationary episode after the Great War. This episode has historical lessons for…

Mindless austerity is losing policy credibility in some Eurozone nations. This column suggests governments shouldn’t mix long-term growth and fiscal discipline nor produce another Lisbon strategy. Instead, they should adopt a framework for…

Nationalism is rising throughout Europe as we are expecting far-right parties to now enter parliaments in greece and france to add to the fringe parties in Finland, Austria and the Netherlands. In Germany, the Piratenpartei, another fringe…