Post Tagged with: "Politics"
EU Summit Dinner Menu: Indigestion
The EU informal summit will be held over a dinner and despite the attention it is receiving, it still seems unreasonable to expect anything concrete. Today’s informal EU summit is not the real thing. It is out of the late June summit that a new effort will likely emerge
Chart of the day: The Grexit decision tree
The Financial Times has gone through the very useful exercise of creating a decision tree on what a Greek exit from the euro zone entails. I think the Europeans are now actively preparing for a Grexit because to not do so would be folly. But that doesn’t mean that they want Greece to be forced out. Much of what we hear for public consumption is real. But much of it is also political posturing to improve negotiating positions. This decision tree can be helpful in figuring out what’s real and what’s just bluff
The euro zone has become a political economy black hole
Without going into the detail of my member posts, here’s what I can say: it is clear Greece will eventually exit the euro zone. The question is the timing. But, the political about-face necessary to prevent contagion is a lot larger than politicians are now prepared to take
[Premium] On my disbelief over the Greek exit chatter
I just re-opened the thread on “How and why Greece will leave the euro zone” because there has been so much chatter about a Greek exit. I am still a bit in disbelief that Europe would allow the Greek economy to crumble so much thy would be forced to exit. You have to think contagion risk from a Greek exit is still pretty high. That tells me Europe is bluffing about cutting Greece off. But politicians sometimes get backed into a rhetorical position that takes on a life of its own. So bad things can definitely happen
[Premium] More on the political economy of the coming Grexit
In February I wrote about the political economy of a Greek default (and euro zone exit), predicting that a Grexit was all but inevitable. In the last few days, there has been an almost feverish debate about this issue, so I wanted to update you with my thinking given how the situation in Greece and the eurozone has deteriorated since February and how the Greek exit from the euro will occur
[Premium] On Europe’s advancing preparations for the Grexit
The evidence is becoming increasingly clear that German policy makers are prepared for Greece to exit the euro zone. Knowing this changes how one should view the likely policy responses in Europe. In the short term, this means allowing more time to meet the Maastricht hurdle and setting up a EuroTARP that banks can access for recapitalisation. Over the medium-term, we will see treaty changes for enhanced fiscal rules including a growth compact, penalties, oversight and specific mechanisms for a euro zone exit
Spiegel: Kohl-era German documents reveal euro formation was about politics
“The German government has, for the first time, released hundreds of pages of documents from 1994 to 1998 on the introduction of the euro and the inclusion of Italy in the euro zone.”
Class Warfare
we are seeing an ever shrinking number of people paying an ever greater portion of the taxes. Though they also are the ever shrinking number of people acquiring an ever greater portion of the wealth. There is little that matches the artfulness in waving off criticism of the widening income gap as “class warfare”. And there is little that matches the gullibility of those who follow along
Europe edges closer to the endgame
Later this week, I plan to write a more comprehensive post on the European sovereign debt crisis to incorporate what we have learned since the French and Greek elections. Here’s a short preview of what I will have to say
[Premium] Daily commentary: The fiscal cliff
The set up for having temporary tax and stimulus measures expire risks a new recession and such a downturn would be ugly, especially given the elevated level of US S&P earnings expectations and the relative P/E ratio of the US market
Fringe Politics in Europe
Nationalism is rising throughout Europe as we are expecting far-right parties to now enter parliaments in greece and france to add to the fringe parties in Finland, Austria and the Netherlands. In Germany, the Piratenpartei, another fringe party more geared to government transparency and without overt nationalist tendencies, is also poised for huge gains. These changes could make the politics of Europe unpredictable if the economy continues to suffer
Limited Hope
Hope may spring eternal, but the presidential victor in 2012 will dictate an economic policy that is stuck in the mud. What then, will break unsustainable imbalances and market interference? Lacking an untoward event, we will wait for the markets to revert. The currency and bond markets cannot be controlled forever