Macroeconomics & the euro

Eurozone: Are the building blocks falling into place?

Eurozone: Are the building blocks falling into place?

26 September 2012
On the face of it, September was a good month for the euro. For once, market expectations were met. The European Central Bank (ECB) belatedly opened the way for action to address the ruinous polarisation of government borrowing costs in the eurozone.
François Hollande

Hollande, the Germans and 'political union'

25 September 2012
François Hollande wants a more equal Franco-German relationship. But tensions over managing the eurozone crisis and reforming EU treaties are straining that relationship.
How seriously can investors take Draghi's assurances?

How seriously can investors take Draghi's assurances?

31 August 2012
The ECB's upcoming programme of government bond purchases will not be big enough to dispel investors' fears that troubled euro members might quit the currency union.
Will a new German constitution save the euro?

Will a new German constitution save the euro?

Katinka Barysch
29 August 2012
German politicians from government and opposition want a referendum on a new pro-European constitution. But this does not mean that Berlin is preparing for eurobonds.
A banking union – it is necessary, but is it likely?

A banking union – it is necessary, but is it likely?

Philip Whyte
27 July 2012
Could the EU's summit of June 29 come to be regarded as a watershed? Following umpteen crisis summits that have failed to tackle the root causes of the eurozone crisis, EU leaders finally got to the heart of the matter: the need to break the vicious interaction between weak banks...
Britain, Europe and the City of London

Britain, Europe and the City of London: Can the triangle be managed?

Philip Whyte
20 July 2012
The City of London's future will be shaped not just by a tougher regulatory environment, but also by uncertainties about Britain's relations with the EU.
Has the eurozone reached the limits of the politically possible?

Has the eurozone reached the limits of the politically possible?

12 July 2012
The limited measures agreed at June's summit are unlikely to take effect, suggesting that the eurozone has already reached the limits of the politically possible.
Franco-German discord

Needed: A Franco-German concordat

27 June 2012
The euro needs a Franco-German bargain: Germany must swallow eurobonds and a banking union, while France must let the EU have a say on its budget.
Germany’s own goal

Germany's own goal: Why Berlin's sense of invulnerability will be its undoing

22 June 2012
Germany’s strategy for dealing with the euro crisis is maximising, not minimising, risks to the country’s economic and political interests.
Some sorts of austerity are better than others

Some sorts of austerity are better than others

01 June 2012
Governments in the eurozone's periphery are making indiscriminate cuts. Reducing spending that does little to support demand and recycling it into investment would help.
A Greek exit will not be cathartic

A Greek exit will not be cathartic

25 May 2012
How the eurozone handles Greece will determine whether or not the single currency survives – and hence the future of the EU as a whole.
If a Greek exit from the eurozone is mishandled, contagion to the other struggling member-states could be uncontrollable, leading inexorably to the collapse of the euro....
Ireland's fiscal treaty referendum

Ireland's fiscal treaty referendum: (More) fear and loathing in the eurozone?

Hugo Brady
11 May 2012
Ireland votes on the EU’s new fiscal compact on May 31st. Hugo Brady assesses the chances of a Yes and the consequences of a No.
Germany's choice

Germany's choice: Higher inflation or sovereign defaults

09 May 2012
Germany faces a choice between higher inflation or a wave of sovereign defaults culminating in either a transfer union or the collapse of the eurozone.
Governance reforms have left the euro's flawed structure intact

Governance reforms have left the euro's flawed structure intact

Philip Whyte
18 April 2012
European leaders have presided over a major overhaul of the way the eurozone is run. But the eurozone's basic institutional configuration remains as unstable as ever.
Stable public finances require stronger business investment

Stable public finances require stronger business investment

26 March 2012
Economic recovery in Europe is being held back by the unprecedented weakness of business investment. Despite a secular decline in business taxation and labour market reforms that have boosted the power of capital relative to labour, the ratio of investment-to-GDP across the EU is at a 60 year low. Rather...
A big eurozone gamble

Eurozone policy-makers place a big bet

13 March 2012
The ECB's decision to lend almost unlimited amounts of money to Europe's banks has bought the eurozone some time. But there is risk that time will be wasted.
Europe's growth strategy: All supply and no demand

Europe's growth strategy: All supply and no demand

Philip Whyte
27 February 2012
Europe's growth performance since 2008 has been abject. The reason is that fiscal policy has done too little to offset the impact of deleveraging in the private sector.