The stronger the fears about a double-dip recession in the US grow, the better it looks for the euro. Only a few months ago, experts were discussing the possibility of a quick break-up of Europe’s monetary union. The same experts have now shifted their attention to the US dollar. However, this does not mean that the euro is off the hook. Far from it. […]
Europe’s problems remain painfully real. But it was wrong to believe that they would inevitably lead to a cataclysmic crisis. It now looks as if it’s going to be much worse. There is never going to be a solution, just a slow, ongoing decline. Not a purgatory from which there is an eventual escape route to heaven, but a Dantean inferno with its famous inscription above the gates: ‘Lasciate ogni speranza, voi ch’entrate’ – ‘Abandon all hope, ye who enter here.’ […]
In many ways, Australia today reminds me of Europe in the first decades of the post-war period. We are full of optimism … our population is growing … our economy is booming. But make the wrong choices about the size of government now, ignore the challenge of population ageing, gloss over temporary problems with public deficits, and just a few decades later, we will end up like Europe – under different stars, but with the same destiny. […]
If international markets or European politicians want to know the future of the euro, they better not ask Germany’s constitutional court. Especially on Greek affairs, the Oracle of Delphi may give a much clearer answer. […]
The enormous Swiss currency reserves are a direct result of the euro crisis as the SNB is fighting an uphill battle to stabilise the Swiss Franc against the weakening euro. Switzerland’s central bank soaks up euros and sells off francs on a massive scale. […]
As long as the Germans pretend that the current crisis was caused by speculation and not by inherent flaws of the European project, this crisis will not pass. They can ban short selling, regulate credit default swaps or outlaw hedge funds all they like, but this will not solve the competitiveness problems of Club Med countries. […]
By putting European idealism ahead of economic concerns, Europe’s leaders have given speculators ample opportunity to exploit the weaknesses of the flawed monetary construction that is the euro. […]
Ironically, the Greek rescue package may have increased the chance of a future sovereign default in Europe – other nations struggling under massive debt burdens are likely to find there is nobody left willing to bail them out. […]
As long as countries such as Greece are joined with Germany in a monetary union, this monetary union will not work. Both of them cannot be members of workable monetary union at the same time. It is high time for one of them to leave. […]
Europe’s centre-right has instead embarked on the task of presenting themselves as the nicer social-democrats, purging themselves of any trace economic liberalism and any old-fashioned conservative instincts. Unfortunately, this unprincipled race for popularity will do nothing to restore Europe’s competitiveness. […]
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