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Open Think Tank Articles
Ethan Christian Arrow: Some European countries resemble graduate students more than they do competing investments. Credit, for sovereign states and academia alike, should always be a scarce resource. The impact of students who would rather party is far milder than a country that has borrowed unwisely.
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Editorial Team: “Armadebton” and “Debtocalypse” are terms Jon Stewart has used to describe the US debt crisis. European commentators have not yet coined a name for their continent’s debt troubles as eurozone pessimism reaches new depths. Share your thoughts on the on-going sovereign debt crisis.
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Hans F. Bellstedt: Joschka Fischer’s call for “greater European political unification” will not help solve the EU’s ongoing debt crisis. The only way to regain the public’s trust and restore financial markets is strict fiscal austerity as a prerequisite for future sustainable growth.
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Global Must Read Articles
The failure of the US congressional “super-committee” to agree on a comparatively small amount of budget cuts is both embarrassing and dangerous. ++ As parties now gear up for election campaigns, the public disgust with the battle line of Congress risks turning “poisonous.” ++ Both parties know that a balance of cuts and tax increases is the answer, but they are too
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The lack of a common fiscal policy is what allowed the Eurozone debacle to occur. ++ Europe has at the same time experienced extremely low levels of growth compared to the US and emerging markets, forcing it to accrue debt to prevent living standards from deteriorating. ++ Germany’s austerity plan will do little to stimulate growth in Southern Europe. ++ Europe requires wide-reaching structural
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Obama’s recommendation for Europe to increase spending as part of a wider-reaching economic stimulus is ill-advised. ++ Cheap credits and low interest rates have been at the heart of a failed US economic strategy. ++ Instead of promoting sustainable growth, the US government has been encouraging economic bubbles to form over the past several decades. ++ The US must bring competitive
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Advanced economies are feeling the strain of a growing economic recession. ++ The economic crisis has spread from the private sector over to sovereign states. ++ Unlike smaller struggling eurozone countries, the world’s most powerful economies should hold off on austerity measures and stimulate their own economies. ++ Reverting back to the national currency is the only way to restore growth and
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Germany faces a choice in the eurozone crisis: allow the creation of a full-blown debt union, or let the euro fail. ++ Berlin has benefitted hugely from the currency union, with the economic surge of the last decade attributable largely to exports to other eurozone countries. But there is also much skepticism about the “morality” of bailing out Southern European countries. ++ The
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The world economy risks a double-dip, a second severe recession, thanks to an EU debt crisis, fiscal instability in the US, and slow manufacturing seemingly everywhere else. Policy makers are quickly running out of options to trigger recovery. ++ Now, economies that still have market access should “introduce new short-term fiscal stimulus while committing to medium-term fiscal
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Washington finally reached a debt-limit deal to avert a calamitous default. But the deal, which “strained and nearly snapped American politics,” was the easy part. ++ The compromise avoided reforming America’s massive entitlement spending and failed to increase tax revenues. Effectively, the bargain “addresses a liquidity problem; it does not resolve the debt
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Dysfunctional politics have turned financial challenges into crises on both sides of the Atlantic. ++ In Europe, officials have “dithered and argued at national, intergovernmental and pan-eurozone levels” as Greece’s credit spreads widened. Washington, meanwhile, is “convulsed by the…spectacle of a voluntary sovereign debt crisis” resulting from the failure of
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The US political elite is responsible for the country’s current debt-ceiling crisis, a direct result of public spending that has skyrocketed to its highest levels since World War II. ++ President Obama has failed to create jobs and improve the economy despite massive spending projects that have increased federal debt to a staggering 72% of GDP. ++ The US is now in danger of losing the AAA
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It is still far from clear how the Greek saga will conclude. ++ The adoption of the austerity package sparked riots and sharpened the question of whether “the increasingly rebellious Greek public” is ready to meet the severe cuts. ++ In case of a default the country is likely to be excluded from the eurozone and markets’ attention would switch to the next “weakest
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The scandalous resignation of the IMF’s managing director Strauss-Kahn and bailouts of European debtor states urge the new IMF head Chistine Lagarde to turn to decisive policy actions. ++ Apart from restoring separation “between the post and political ambitions of the holder”, a fair, merit rather than nationality-based selection process for future candidates should be set up.
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Greek debt crisis questions the existence of the EU and outlines the instability of a monetary union which is not backed by political and economic unions. ++ “Dismantling of the welfare and redistributive systems” stir populist sentiments. ++ The case is exacerbated by the failure of the Schengen treaty and the absence of common security and foreign policies. ++ Whereas the
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