Despite Its Troubles, the Euro Area Is Making Progress

Yes, the headlines from the euro area are discouraging. The region’s Purchasing of Managers Index (PMI) is falling again—to 45.9 in May, with even German levels down. The European stock markets are down. The euro has slid to 1.25 vs. the dollar, accelerating preparations for a Greek euro exit. No resolutions of the political crisis […]

Endgame in Greece: Don’t Look for an Imminent ‘Grexit’

As the countdown toward a new Greek election heads toward June 17, most analysts predict an imminent Greek exit from the euro area. Almost anything can happen, but a few possibilities are worth considering. Any newly elected Greek government will have trouble implementing the current austerity program called for by euro leaders and the International […]

How Euro Brinkmanship Is Beginning to Succeed

European Union leaders had the umpteenth euro crisis summit at the end of January. Indeed the EU Council meets so often that the descriptions of these gatherings should be changed from “yet another summit” to “back in session.” The slide to near-permanent policymaking has occurred as the EU Council begins to resemble a sitting parliament. […]

On Greece, Growth, and Downgrades

Events remain unsettled in the euro area in 2012 in spite of some recent progress toward stabilizing the fiscal and financial outlook. To begin with, negotiations between the Greek government and private creditors represented by the Institute for International Finance (IIF) have been suspended as they enter the final critical phase, with each side considering […]

Portugal Votes for the IMF

Judging from the press coverage of Europe’s sovereign debt crisis, you would think that citizens of Greece, Portugal and other errant countries are in full scale revolt against the measures being imposed to get them back to solvency. But this weekend’s election result in Portugal illustrates the need to separate dramatic television pictures of street […]