Political Economy

For you political junkies, I ask: doesn’t this have the ring of truth to it?

In the last post on the EU, I said that the EFSF is too small. Basically, only the ECB has unlimited liquidity in its arsenal to deal with contagion to Spain and Italy. Willem Buiter agrees and has spoken to Bloomberg about his analysis of…

The full statement from the EU without commentary

This post is a prelude to a BBC interview on the sovereign debt crisis. I am not going to answer financial Armageddon questions about "what oif it all goes pear-shaped" here because to understand where things are headed you need to know how…

Guilio Tremonti, the Italian Finance Minister, last week compared Germany and its small-minded Chancellor Angela Merkel to a first-class passenger on the Titanic. To repeat: this is not a problem confined to the periphery. The sovereign…

Speculation of some agreement has helped lift the euro, peripheral bonds, and generally has underpinned the risk appetite in recent days. This leaves the market vulnerable to disappointment or a "buy the rumor sell the fact" type of…

I believe the sovereign debt crisis will deteriorate further. And then we will just have to see what the politics of the individual countries in Euroland look like. If austerity brings the economy to a crawl and europopulism is well…

If the sovereign debt crisis spirals out of control, it is not clear who will govern. At a minimum, Germany’s reputation as a foundational support for the European project will be in tatters. Likely, the governing coalition of CDU, CSU and…

There seems to be an aggrieved sense on the part of creditor nations that after providing so much helpful funding to undisciplined debtors, the creditors are going to be left with losses. There is, they claim, something terribly unfair…

If I had to make parallels for today's time in history, I still say this is Hoover’s time, not Roosevelt’s and certainly not Clinton’s.