On a day where unemployment in the Eurozone hit a new high of 11.1%, with youth unemployment over double that, German manufacturing is feeling the bite from the slump among export partners. This reminds us that while last week’s agreements may have averted the immediate bank crisis, it hasn’t addressed the underlying economic problems.
|By: David Dayen Friday June 29, 2012 7:35 am|
The 2-day EU summit may have produced some actual movement that at least gestures in the direction of better policy.
|By: David Dayen Tuesday June 26, 2012 2:10 pm|
The EU has come up with a plan, to be discussed at this week’s summit, to dramatically consolidate fiscal policymaking power in a Eurozone leadership figure, without authorizing the kind of fiscal transfers that would smooth over imbalances and make the currency union a true “United States of Europe.”
|By: David Dayen Thursday June 14, 2012 7:32 am|
The hope of the election of Francois Hollande, aside from him holding to and expanding his views of solutions to the European crisis that don’t solely hinge on austerity, was that other nations would rally to his position, and that collective action would represent a counter-weight to Germany, which until now has really been dictating [...]
|By: David Dayen Tuesday June 5, 2012 8:15 am|
Out of Europe overnight we get one of the first signs that Angela Merkel might be willing to blink in her game of chicken with the peripheral sovereign nations. Germany has indicated that they would be open to what amounts to a one-off variation of “eurobonds,” the pooling of Eurozone debt into a common security. However, this would be part of a larger action that would centralize fiscal control throughout the Eurozone.
|By: David Dayen Tuesday May 29, 2012 12:15 pm|
The Guardian ran a primer on eurobonds over the weekend that appeared to agree with me, that Germany would pay more for its debts under a eurobond scheme, and peripheral countries would pay less. However, one reason for the confusion on this issue is that there actually is no set structure on the details of eurobonds. The details matter.
|By: David Dayen Thursday May 24, 2012 7:12 pm|
European leaders met in Brussels yesterday, and even going in it was clear that the countervailing forces, exemplified most by Germany and France, would not come to any agreements. And that’s just how it turned out.
|By: David Dayen Wednesday May 23, 2012 11:30 am|
French President Francois Holland offers a different manner of thinking on the euro crisis, away from austerity and toward integration through eurobonds, fiscal transfers and economic growth. On the first part, however, Germany has all but ruled out eurobonds, which would create collective credit risk across the Eurozone.
|By: David Dayen Tuesday May 22, 2012 8:40 am|
Discussions on how to save the Euro union are partly focused on the idea of issuing Euro-wide bonds, backed by the union as a whole, which would take advantage of the economic strengths of German and other core countries. France’s new President Hollande has proposed this, supported by the IMF and others, but the Germans remain strongly opposed. Euro-wide bonds are likely necessary but are not sufficient to hold the Euro union together.
|By: David Dayen Monday May 7, 2012 1:40 pm|
At this moment, politics in Europe is both more interesting and consequential than politics in the US. A case in point: newly-elected Francois Hollande just threw down the gauntlet with Germany, offering his ultimatum to Chancellor Angela Merkel on the future for Euro-zone financing.