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The hazard of second best

By Mohamed A. El-Erian NEWPORT BEACH: The international community risks settling for second best on two key issues to be discussed this month at global meetings in Washington, DC: the lingering (if currently somewhat dormant) European debt crisis, and the selection of the World Bank’s next president. It is not too late to change course, but …


Whose sovereignty?

By Javier Solana MADRID: Despite the huge sums expended to write down Greece’s foreign debt, there has been an outcry of censure against “interference” with the country’s national sovereignty. True, in exchange for considerable European aid, Greece’s ability to maneuver independently will be limited. But are complaints that Greek sovereignty has been severely impaired justified? The …


Europe firewall boost throws spotlight on IMF

By Tamim Elyan / Reuters COPENHAGEN: With a decision to expand its anti-crisis “firewall”, the eurozone has thrown the ball firmly back into the court of other economic powerhouses who pledged more cash for the IMF if Europe stumped up first. After providing loans to help debt-wracked countries such as Greece, Christine Lagarde, head of the …


Alexander Hamilton’s Eurozone tour

By Harold James PRINCETON: Europe’s debt crisis has piqued Europeans’ interest in American precedents for federal finance. For many, Alexander Hamilton has become a contemporary hero. Perhaps one day his face should appear on the €10 banknote. Specifically, for European states groaning under unbearable debt burdens, Hamilton’s negotiation in 1790 of the new federal government’s assumption …


Europe’s empty fiscal compact

By Martin Feldstein CAMBRIDGE: The driving force of Europe’s economic policy is the “European project” of political integration. That goal is reflected in the European Union’s current focus on creating a “fiscal compact,” which would constitutionalize member states’ commitment to supposedly inviolable deficit ceilings. Unfortunately, the compact is likely to be another example of Europe’s subordination …


Can Europe be saved?

By Alfred Gusenbauer VIENNA: In 2011, Europe’s financial and banking crisis escalated into a sovereign-debt crisis. A problem that began in Greece ended up raising doubts about the very viability of the euro — and even of the European Union itself. A year later, those fundamental doubts remain undiminished. But, if one compares the EU with …


The Eurozone’s fork in the road

By Mario I. Blejer and Eduardo Levy Yeyati BUENOS AIRES: Many observers have recently declared that the eurozone debt crisis is practically resolved, or at least on hold for a few years. The falling yields at the Italian government’s last bond auctions in 2011 suggested a significant reduction in the perceived sovereign-default risk. Since Italian bonds …


Tobin trouble

By Mark Roe CAMBRIDGE: European leaders are seriously considering a Tobin tax, which would put a small levy on financial transactions, thereby dampening trading. But will the tax do as much as its proponents hope? The popularity of the tax (named for the late Nobel laureate economist James Tobin, for whom its aim was to …


Does debt matter?

By Robert Skidelsky LONDON: Europe is now haunted by the specter of debt. All European leaders quail before it. To exorcise the demon, they are putting their economies through the wringer. It doesn’t seem to be helping. Their economies are still tumbling, and the debt continues to grow. The credit ratings agency Standard & Poor’s has …


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