Daily Archives: October 9, 2012

German chancellor Angela Merkel with Greek prime minister Antonis Samaras on October 9 in Athens (Thanassis Stavrakis/AFP/GettyImages)

The last time Angela Merkel visited Greece was in 2007 – which, incidentally, was also the last year the country recorded positive economic growth. Greece has seen its annual output shrink ever since; its economy rocked by a debt crisis, its political leaders repeatedly forced to go cap in hand to its richer eurozone cousins. Of these, Germany is the most important, but opinion polls suggest its public has long grown impatient with Athens’ failure to keep its promises. Locked in an embrace that neither would have chosen – Germany attempting to pull Greece out of its fiscal crisis; Greece, ever more dependent on Berlin’s support, but resenting its interference – the question is whether the two countries will hug tighter, or finally break apart. Could Merkel’s meeting with Antonis Samaras on Tuesday herald a friendlier era? Read more

Giving emerging markets their rightful place in running the world economy has now been a staple summit platitude for years. Getting everyone to agree how to calibrate hegemony is a bit trickier.

The IMF is struggling with this at the moment, as its shareholder countries remain a long way apart on revising the “quota“, or voting share, given to each nation on the fund’s executive board. (For a sense of the complexity and intractability, think the Schleswig-Holstein Question but with Excel spreadsheets.) Read more

Here are some pieces to chew over today:

IMF’s Blanchard unveils report at Tokyo gathering of finance ministers and central bankers.

Although the headlines generated by last night’s release of the IMF’s annual World Economic Outlook focused on the downgrading of global growth prospects, for the eurozone crisis the most important item in the 250-page report may just be a three-page box on how austerity measures affect struggling economies.

The box – co-authored by IMF chief economist Olivier Blanchard and staff economist Daniel Leigh – argues in stark language that the IMF as well as other major international institutions, including the European Commission, have consistently underestimated the impact austerity has on growth.

For a eurozone crisis response that has piled harsh austerity medicine on not only bailout countries but “core” members with high debt levels –Italy, France and Belgium, for instance – the IMF finding could shake up the debate on how tough Brussels should continue to be on eurozone debtors. As French economist Jean Pisani-Ferry, director of the influential Brussels think tank Bruegel, tweeted yesterday:

 Read more

Greece is usually labelled the eurozone’s most reform-resistant economy, but perhaps that’s because Cyprus slips under most people’s radars, writes Tony Barber. Read more

Romney supporters are starting to get excited (Getty)

Every four years, experienced political commentators and pundits swear they will not repeat the mistakes of four years ago, when they allowed a single poll to influence their view of how the election was going to fall out.

But, as the candidates head to swing states (President Barack Obama is in Florida this week, his challenger Mitt Romney campaigns in Iowa and Ohio today), the commentariat is becoming excited by a poll showing the race for the White House turned on its head by last week’s debate. Read more