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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.
Winston Churchill once quipped about Americans: They always do the right thing—after they have tried everything else. One can now say the same of Europeans and their handling of banks. After steadfastly refusing to do so ever since the beginning of the global financial crisis in 2008, last week the European [...]
It did not take long for the trillion dollar rescue in Europe to stir second thoughts in global financial markets. Late Sunday night in Brussels Europe assembled its “BIG package” to fight its sovereign debt crisis and any contagion from Greece. On Monday global markets rallied. Yet since Tuesday, [...]
Greek bond yields, perhaps predictably, came down this week after the final announcement of the International Monetary Fund/eurozone bailout plan on Sunday. However, this was less due to the expected announcement of the details of the Greek bailout plan than to the fact that the European Central Bank (ECB) unexpectedly [...]
On May 2 the International Monetary Fund and European Union made an agreement with the Greek government on a stabilization program for Greece. This program is being presented as the solution to the Greek financial crisis, but it is difficult to see how that would be the case from the details [...]
On the day that the Greek debt starts to spread to Portugal and Spain, and Standard and Poor’s predicts a 50 to 70 percent haircut on Greek debt, what is the official response in Europe? Simply disastrous!
Spain, the holder of the European Union’s rotating presidency—in time-tested EU fashion—calls an EU Summit [...]