In a new article, George Soros warns German voters that they risk another Depression.
The Fed pumped dollars into European banks, Timothy Geithner pleaded with EU finance ministers to take quick action, and in today’s FT former Obama administration economic major-domo Larry Summers warned that incrementalism in the eurozone is akin to the slow bleeding of the Vietnam war.
It seems like the week the Americans jumped into the crisis surrounding the euro with both feet.
Now comes a compelling treatise from yet another major American economic thinker, financier George Soros, who has written in the New York Review of Books echoing Summers’ concerns about incrementalism and predicting that a common eurozone treasury is imminent – and may be the only solution to the crisis. Read more
German finance minister Wolfgang Schäuble
Influential Nobel Prize-winning economist Paul Krugman has picked yet another fight with eurozone politicians, this time with Germany’s Wolfgang Schäuble.
On his New York Times blog, Krugman takes issue with the German finance minister’s claim at a panel discussion in Frankfurt on Thursday that “economists worldwide” agree the 2008 eurozone crisis was triggered by excessive public debt “everywhere in the world”.
Krugman says excessive public debt actually triggered a crisis in only one country, Greece. Ireland and Spain’s problems only become a public debt crisis after private-sector bank debt was moved onto the government books through bail-outs. Similarly, until the recent standoff over the US debt ceiling, American problems have originated in the financial sector. Read more
Greek taxis block Athens streets during a 48-hour strike. A similar Greek roadblock in Brussels?
If this morning’s media accounts are any indication, European leaders are still scrambling to come up with a deal on a second Greek bail-out ahead of Thursday’s emergency eurozone summit here in Brussels. Read more
Ahead of this week’s gathering of European finance ministers in Brussels to hash out new bail-out systems for the eurozone, two magazines have weighed in with their views of what needs to come next to rescue the single currency – and both suggest going further than ministers have been willing to thus far.
On Sunday, the New York Times Magazine published a highly readable summary of the crisis by Nobel Prize-winning economist Paul Krugman entitled “Can Europe be Saved?” in which he appears to back the idea of a Europe-wide bond.
And the new issue of the Economist advocates a different and far more pessimistic route: a restructuring of Greek debt, followed potentially by similar moves in Ireland and Portugal. Read more