"Grexit?" is the first question that even policy makers in Kazakhstan ask about in meetings. Sign of how Greece's crisis is a global concern
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Europe Channel: Latest Posts
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Peterson Institute for International Economics
Implementing Basel III in the European Union: A Deeply Flawed Compromise
By all accounts, EU member countries have for months been debating how to implement the minimum bank capital standards agreed under Basel III. Their arguments have unfolded as the EU works to complete its fourth Capital Requirements Directive (CRD4) and its Capital Requirements Regulation (CRR); (see Véron 2012). Three issues have been contentious: (i) whether [...]
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Europe
Turning Periphery Economies Around: Moving from Austerity to Economic Growth
The debate has finally moved forward. There is growing official acceptance that austerity policies have failed. Going forward, however, IMF forecasts show that Eurozone countries will continue to incur budget deficits into the future. All else equal, this means that public debt will continue to increase, year-by-year, particularly in periphery countries where budget deficits will [...]
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RGE Analysts
Ireland Should Vote Yes on the Fiscal Compact
With fewer than ten days to go until the Irish referendum on the fiscal compact, a huge percent of the population remains undecided about how they are going to vote. According to a recent opinion poll, 37% of respondents will vote in favour of the fiscal compact, 24% against it and 35% are undecided. While [...]
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Peterson Institute for International Economics
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 [...]
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Peterson Institute for International Economics
Is Europe Ready for Banking Union?
Systemic fragility in the European banking sector predates the Greek fiscal crisis. It was revealed by the subprime/Lehman shock of 2007–08, and has never been properly addressed since then in spite of successive stress tests. In recent weeks, several senior policymakers have become more explicit on the need for a banking union—in other words, a [...]
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Europe
Today Germany Is the Big Loser, Not Greece
Given the German electorate’s long standing aversion to “fiscal profligacy” and soft currency economics (said to lead inexorably to Weimar style hyperinflation), one wonders why on earth Germany actually acceded to a “big and broad” European Monetary Union which included countries such as Greece, Portugal, Spain and Italy. Clearly, this can be better understood by [...]
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Europe
Weighing the Week Ahead – Any Help from the European Summit?
The turmoil in Greece and the potential contagion have once again taken center stage. While the economic and debt problems are well-known, the question for many is why should Greece be so important? The answer lies in whether there is a threat to global financial stability, or whether the rest of the world will experience [...]
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Europe
Greece Can Go – But Avoid a Bigger Euro Break-Up
Again we face a sea of uncertainty from across the Channel. Is there any way we can avoid a nasty outcome for Britain? Sir Mervyn King says he and other members of the Bank of England’s monetary policy committee agree there is “no meaningful way to quantify the most extreme possible outcomes” in the eurozone. [...]
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Europe
Contagion? What Contagion?
The Greek bankruptcy (happened already with the debt restructuring), the ungovernability of the country sanctioned by the polls, and the prospect of exit from the Euro, evoke the specter of “contagion”. The fear shaking markets, governments as well as depositors, is that the precipitation of the Greek crisis will cause a crack on a continental [...]
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Don't Shoot the Messenger
Can This Really Be Europe We Are Talking About?
In recent days I have been think a lot, and reading a lot, about the implications of Greece’s recent election results. At the end of the day the only difference this whole process makes to the ultimate outcome may turn out to be one of timing. If Alexis Tsipras of the anti bailout, anti Troika, party Syriza [...]
