European breakup

The most important debate of our lifetimes is now ongoing. The question: Should the ECB “write the check’ for the euro area national governments? In thinking about the answer to this all-important question, I prefer to shift the focus by…

The escalation of the European debt crisis and mounting evidence of new economic contraction has increased the scrutiny on the region. Yet it seems like many observers may be failing to grasp several important points, including the nature…

Sources close to the German government have told Reuters that the German Chancellor Angela Merkel is seeking agreement to make changes to the Lisbon Treaty, considered the European Constitution. According to Reuters’ sources, Merkel wants…

My friend Lars Schall sent me this link. I think you have to put this in context by looking at what Der Spiegel was saying about a Greek exit. What is clear is that the taboo that Angela Merkel broke in responding to the proposed Greek…

This sounds like hearsay to me, but I wouldn’t be telling you about it if I didn’t believe it was credible.

Italian 10-year yields are now down below 6.5%, that’s a full percentage point lower than on Wednesday. Market players suspect ECB intervention is behind the sizable move. Still, everyone is breathing a sigh of relief as we head into the…

The German Christian Democrats hold a party congress next weekend. There are a number of proposals that members are trying to get incorporate into the party position and platform. One such proposal is to give the national central banks…

I continue to predict that Europe will move to change its constitution to include greater fiscal integration but also include explicit mechanisms for countries to leave the euro area.

I have been saying for some time that the euro zone is coming apart at the seams. This makes a lot of sense. The question is how to do it. Here’s my suggestion from a few days ago.

That’s what Philipp Rösler, the leader of the junior partner in Germany’s coalition government, is saying. Barry Eichengreen says that this kind of talk is counterproductive.