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A website forum in which senior fellows of the Peterson Institute for International Economics discuss and debate their responses to global economic and financial developments as they occur each day and offer insights that others might overlook.
The frantic spectacle of European leaders struggling to avert a financial crisis caused by Greece has seemed unsettling and at times amateurish. It is certainly easy to point fingers at policymakers patching solutions together—solutions that immediately unravel under pressure from the markets—and to do so again and again over [...]
The $1 trillion rescue of the eurozone, aimed at averting a spread of contagion from Greece, did nothing to help the Greeks address their underlying and unsustainable fiscal situation. Greece is insolvent and needs to lower its total debt burden before 2012.
As I wrote earlier, the IMF has published its [...]
Europe’s leaders seem finally to have risen to the occasion in their crisis management, as they put together something genuinely BIG over the weekend to support the financial stability of the eurozone. It was quite literally the first “2 a.m. Sunday morning moment” for Brussels (albeit a little after the markets opened [...]
Now that the negotiations over financial assistance to Athens have started among European representatives, the IMF, and the Greek government, what outcomes should we expect?
First, we need an honest price tag and a long-term economic restructuring plan with a chance of success. The eurozone stuck its head in the sand a [...]
In Europe, bond markets are more powerful than voters in intimidating politicians to make faster and different decisions. So, in a manner uncomfortably close to the chaotic Lehman Brothers meetings over a single weekend last year at the NY Federal Reserve, the eurozone last weekend finally offered more clarity to financial [...]