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Bulgarian Election Shows Need to Clean House
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It looks as though the center-right Citizens for European Development party won Bulgaria’s early elections, the same party that triggered the vote by resigning from government amid protests in February. So has anything changed? The short answer...
ECB’s Parking Fees Show Its Weakness
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European Central Bank President Mario Draghi surprised markets and analysts last week by saying the central bank is open to an unconventional stimulus tactic: pressuring banks to lend by charging them a fee for parking cash at the ECB. The developmen...
Germany Should End Austerity, Not Ireland
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Anti-austerity fever is sweeping Europe as policy makers decide the way to get from crisis to growth involves higher spending. Well, not so fast. The fever has already spread to the highest levels. At the International Monetary Fund’s recent sp...
Slovenia Bailout Would Be Spanish-Cypriot Mongrel
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The ink on the provisional bailout agreement for Cyprus was hardly dry last month before bond markets shifted their attention to Slovenia, another small euro- area country with a banking problem. The Slovenian government’s borrowing costs subse...
How to Kill a Banking Union the German Way
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The most effective way to block any measure in the European Union is to say it requires a treaty change. This is the sucker punch German Finance Minister Wolfgang Schaeuble delivered at an April 13 meeting with his EU counterparts in Dublin. Accordin...
Germans Are Poorest in the Euro Area. Really?
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With a title like “The Eurosystem Household Finance and Consumption Survey,” the European Central Bank’s latest piece in its Statistics Paper Series doesn’t sound like a page-turner. It has received a lot of attention, though,...
Cyprus Can Save Itself by Fleeing the Euro
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Cypriots sitting in the cafes here on Nicosia’s Ledra Street are asking one another if there isn’t an alternative to their island’s bailout. It has been just weeks since the series of rollercoaster negotiations that produced a deal...
More Risk From Portugal
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The euro area has had a rough few weeks: Cyprus agreed a bailout program that will decimate its economy, Italy’s Pier Luigi Bersani, the Democratic Party leader, failed to put together a government, borrowing costs for businesses in the periphe...
Cyprus Shows Trust in ECB is Misplaced
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Ever since European Central Bank President Mario Draghi said last July that the bank will do whatever it takes to preserve the euro, complacency has pervaded Europe’s single-currency area. Markets have weathered potential crises in Italy and Sp...
Cyprus’ Four Options for Avoiding Collapse
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The only thing worse than Cyprus accepting the rotten bailout program that European policy makers agreed on late last week was Cyprus rejecting it. Yesterday, the parliament voted decisively against the terms of the bailout, with 36 members opposing...
Euro Area Ruins its Progress with Cyprus Deal
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There’s nothing like having part of your savings account confiscated overnight to make you feel that your money isn’t safe. That’s what depositors in Cypriot banks awoke to on March 16, when they found their accounts frozen for at l...
Fancy Footwear and Austerity Won’t Save Portugal
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Anyone still in need of proof that austerity isn’t fixing the euro area’s debt crisis should visit Portugal. Hundreds of thousands of Portuguese took to the streets of Lisbon to protest against economic austerity on March 2, and the only...
Don’t Believe Spain’s Deficit Numbers
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Last week, Spanish Prime Minister Mariano Rajoy gave investors and analysts a pleasant surprise, announcing that his country’s budget deficit had fallen to 6.7 percent of gross domestic product in 2012, far below the European Commission’s...
Italy Votes for Chaos and the Euro Crisis Is Back
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Italy’s parliamentary election could not have gone worse for the country or the euro area. It is now possible that in the coming months the currency zone’s third-largest economy will need a bailout from international creditors, at a time...
Huge Opportunity from Moody’s Downgrade of U.K.
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Most of the focus on Moody’s downgrade of U.K. debt to Aa1 from Aaa yesterday has been on the potential negative repercussions — and there are some. But it also creates an enormous opportunity in the chance to ease front-loaded auste...
Did the ECB Just Warn Italian Voters Against Berlusconi?
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The European Central Bank this week, for the first time, published details of its former bond-buying initiative, known as the Securities Markets Program. The timing of the release, on the eve of Italy’s Feb. 24-25 elections, is as interesting a...
Italian Election Can’t Produce Both Stability and Reform
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Next week’s parliamentary election in Italy is a make-or-break vote for the country, which for several years has been teetering on the brink of a fiscal crisis. If Italians choose a government that won’t push ahead with economic reform, o...
Greece May Get Cruel Reward For Its Success
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Greece reported recently that it has reached a primary budget surplus, the Holy Grail of austerity, meaning that once you exclude interest payments on the country’s massive debts, the country is finally taking in more revenue than it spends. Th...
Tap Into the European Economy
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President Barack Obama should make it clear in his speech that wrapping up a new U.S.-European Union trade deal will be a foreign policy priority for his second term. Why the U.S. should want to increase its exposure to Europe, paralyzed by a financi...
The Real Threat from Spain’s Corruption Scandal
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Investors worried about Spain’s political stability have been dumping their Spanish holdings and pushing up the country’s borrowing costs after the eruption late last week of a corruption scandal involving Prime Minister Mariano Rajoy. Un...
