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 […]
There is reason to believe that the global economy will have to navigate troubled waters till 2015, since the Eurozone is now in recession and the crisis will take time to abate. Europe has made several important moves since December 2011, by injecting some essential liquidity in the system. But it is necessary to understand […]
The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November. Service sector firms like banks and hotels that comprise the bulk of the economy fared particularly badly this month, and laid off staff at a […]
The European Central Bank wields more power now than at any point in its 14-year history. If it wants to use that power responsibly, it needs to be a lot more open with the people whose well-being it aims to ensure. Thanks in large part to its lead role in fighting the euro area’s festering debt crisis, the […]
Four years after the start of the Great Recession, the global economy has not recovered, voters are losing patience and governments around the world are falling like ninepins. This is a situation conducive to revolutionary thinking, if not yet in politics, then maybe in economics. In the past few months the International Monetary Fund, previously […]
FOR investors around the world, the recovery seems assured. The MSCI global share index has risen almost 10% since July. The credit for this largely goes to central bankers. In July Mario Draghi, president of the European Central Bank (ECB), said he would do whatever it takes to hold the euro together. In early September […]
One of the most mind-boggling debates going on in euroland right now – only one of many, but particularly guaranteed to make the head spin, this one – is over the build-up of so-called “Target 2” claims and liabilities. Target 2 is the mechanism by which money is transferred around the euro area to ensure […]
This summer, many government officials and private investors finally seemed to realize that the crisis in the euro zone was not some passing aberration, but rather a result of deep-seated political, economic, and financial problems that will take many years to resolve. The on-again, off-again euro turmoil has already proved immensely damaging to nearly all Europeans, […]
Barack Obama had a lot on his hands last week with attacks on U.S. embassies across the Middle East, but in Europe, a big story buried by the drama of firefights in Libya, Cairo riots, and tumult in Tunisia should have him sleeping a bit easier. In fact, he might want to send a thank-you […]
With the euro in crisis, Germany has come to seem like a lone island of fiscal stability in Europe. Its debt levels are modest, its government bonds are safe havens for investors around the world, and it has avoided the kinds of private credit booms and housing bubbles that have destabilized the rest of the […]
looking beyond borders 