looking beyond borders

foreign policy and global economy

Archive for the tag “European Central Bank”

Global Economy Reaches Decision Time

In the coming months, highly consequential policy decisions (or their absence) in systemically critical parts of the global economy will be revealed, with significant effects on growth rates, asset prices, and overall confidence.

Read Here – Project Syndicate

What Is The New German Question?

There is a new German question. It is this: Can Europe’s most powerful country lead the way in building both a sustainable, internationally competitive eurozone and a strong, internationally credible European Union? Germany’s difficulties in responding convincingly to this challenge are partly the result of earlier German questions and the solutions found to them.

Read Here – The New York Review of Books

Southern Europe’s Downward Spiral

For years, European leaders have been trying to put a stop to the debt crisis that is tearing Southern Europe apart. It might be time to change strategy since little progress has been made.

Read Here – Der Spiegel

Global Slowdown Set To Impinge Policy

As evidence mounts that a mid-year slowdown is taking place in the world economy, the next few days will offer a clearer glimpse of how that will impinge on policymaking and buoyant financial markets.

Read Here – Reuters

Why Moscow Is Playing the Long Game on Cyprus

Russia recently turned down a deal to save Cyprus’ banking sector. At first glance, the move looked like a huge strategic blunder. In fact, a credible offer was never on the table and Moscow needs no accord to secure its dominance on the island.

Read Here – Foreign Affairs

The Great Disconnect

Since the second half of 2012, financial markets have recovered strongly worldwide. Indeed, in the United States, the Dow Jones industrial average reached an all-time high in early March, having risen by close to 9% since September. In Europe, European Central Bank President Mario Draghi’s “guns of August” turned out to be remarkably effective….But this financial market buoyancy is at odds with political events and real economic indicators.

Read Here – Project Syndicate

The New Political Geography Of Europe

The euro crisis has revolutionised politics across Europe. Established political
parties are fighting for their lives; countries that thought of themselves as part
of the European core are finding themselves on the periphery; and a huge
gulf has emerged in the core of Europe. What we are witnessing, as the euro
crisis enters its third year, is the emergence of a new political geography for
the European Union that is reshuffling the divisions within and between the
nations of Europe. The crisis is not over, but it has evolved from a banking
crisis and then an economic crisis into an acute political crisis.

Read Here – The European Council on Foreign Relations

Davos Leaders Uneasy Over Glut Of Easy Money

The world is awash in easy money, with consequences that are starting to worry some central bankers and business leaders at the DavosWorld Economic Forum (WEF), though so far inflation fears seem overdone.

With developed world government finances constrained by huge debts and deficits, central banks have pumped trillions of dollars into the system to try to revive sluggish economies, combat deflation and prop up weak banks.

The Fed, the Bank of England, the Bank of Japan and to a lesser extent the European Central Bank have strayed far from traditional inflation fighting to take into account objectives such as reducing unemployment, raising nominal GDP, and ensuring the smooth functioning of the sovereign bond market.

Read Here – Reuters

As Europe’s Currency Crisis Fades, Growth Worsens

Maybe, just maybe, the worst of the euro crisis is over. Business and consumer confidence is rising across the Continent, sovereign bond yields are falling, and capital flight from its weakest economies is easing. Talk of an imminent breakup of the currency union has all but disappeared. Even Greece, whose debt hemorrhage plunged the euro zone into crisis three years ago, is starting to meet deficit targets agreed to with its lenders.

“We are now back in a normal situation from a financial viewpoint,” European Central Bank President Mario Draghi said at a Jan. 10 news conference. “We spoke a lot about contagion when things go poorly, but I believe there is a positive contagion when things go well. That’s also what is in play now.” His comments lifted the euro to $1.32, its biggest gain in four months against the dollar.

Read Here – Businessweek

A Second Chance for European Reform

The European Central Bank has managed to calm the markets with its promise of unlimited purchases of eurozone government bonds, because it effectively assured bondholders that the taxpayers and pensioners of the eurozone’s still-sound economies would, if necessary, shoulder the repayment burden. Although the ECB left open how this would be carried out, its commitment whetted investors’ appetite, reduced interest-rate spreads in the eurozone, and made it possible to reduce the funding of crisis-stricken economies through the printing press (Target credit).

Read Here – Project Syndicate

Post Navigation

%d bloggers like this: