Number of results to display per page
Search Results
72. Only a more active ECB can solve the euro crisis
- Author:
- Paul De Grauwe
- Publication Date:
- 08-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- The biggest threat for the eurozone is the contagion of the Greek sovereign debt crisis to the rest of the system. If the Greek crisis could be isolated, it would barely matter for the eurozone as a whole. After countless crisis meetings of the European Council, however, it has to be admitted that the European leaders have failed to isolate the Greek crisis and to stop the forces of contagion. The latest meeting of the heads of state or government of the euro area on July 21st is no exception.
- Topic:
- Debt, Markets, Regional Cooperation, and Financial Crisis
- Political Geography:
- Europe
73. Putting Politics above Markets: Historical Background to the Greek Debt Crisis
- Author:
- Takis Michas
- Publication Date:
- 08-2011
- Content Type:
- Working Paper
- Institution:
- The Cato Institute
- Abstract:
- Political clientelism and rent seeking have been the central organizing principles of Greek society since the foundation of the Greek state in the 19th century. The influence of the Eastern Orthodox Church on Greek nationalism and the legacy of the patrimonialist Ottoman empire produced a weak civil society. The result has been a disproportionately large Greek state and public bureaucracy since the 1800s that set the stage for rent-seeking struggles that have followed.
- Topic:
- Corruption, Debt, Financial Crisis, and Governance
- Political Geography:
- Europe
74. Europe's debt crisis: Where and when will it end?
- Author:
- Ben Jones
- Publication Date:
- 10-2011
- Content Type:
- Working Paper
- Abstract:
- Greece is not unique. Investors are finding it hard to judge which countries are "safe" or price for that risk. The EFSF is too small to buy the debt of larger states on the scale needed to stabilise markets. The EFSF cannot be scaled up in its current form without threatening the AAA ratings of the creditor countries.
- Topic:
- Conflict Resolution, Debt, and Financial Crisis
- Political Geography:
- Europe and Greece
75. Sustainability of Greek Public Debt
- Author:
- William R. Cline
- Publication Date:
- 10-2011
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- On July 21, 2011, the heads of government of the euro area announced a new plan to address the Greek debt crisis. This policy brief presents a simulation exercise that examines whether the new arrangements are likely to provide a sustainable solution. The analysis focuses on four key measures: gross debt relative to GDP; net debt relative to GDP; net interest payments relative to GDP; and amortization of medium-and long-term debt coming due during the year in question, relative to GDP. The new Greek package shows prospective future progress on all four measures, and Greek debt looks much more sustainable after the package than before. Debt also appears considerably more manageable if the criterion is net debt or interest burden rather than gross debt ratio, although even for gross debt the ratio is down substantially by 2020. It also becomes clear that the major contribution of the private-sector involvement (PSI) part of the package is in the form of sharply cutting amortization due, although by avoiding large new borrowing at crisis-level interest rates it also alleviates the interest burden that would otherwise occur.
- Topic:
- Debt, Economics, Regional Cooperation, and Financial Crisis
- Political Geography:
- Europe and Greece
76. Eurozone finally agrees a deal but uncertainties remain unresolved
- Publication Date:
- 11-2011
- Content Type:
- Policy Brief
- Institution:
- Oxford Economics
- Abstract:
- After protracted negotiations, Eurozone leaders finally agreed on a new package of measures last week. The outline deal has a three-pronged approach aimed at tackling the main aspects of the crisis: reducing Greece's debt burden, avoiding a credit crunch by recapitalising European banks, and preventing contagion to other countries via a boost to the EFSF.
- Topic:
- Debt, Economics, Markets, Regional Cooperation, and Financial Crisis
- Political Geography:
- Europe and Greece
77. Speculative Attacks within or outside a Monetary Union: Default versus Inflation (what to do today)
- Author:
- Daniel Gros
- Publication Date:
- 11-2011
- Content Type:
- Policy Brief
- Institution:
- Centre for European Policy Studies
- Abstract:
- Is a high level of public debt inherently more dangerous within a monetary union? During the 1990s it was often argued that only by entering the EMU could Italy (or Spain) protect itself from the high interest rates it had to pay on its large public debt. The argument was that by joining the single currency, Italy could convince financial markets that it would not inflate away the value of its debt and hence benefit from lower risk premia.
- Topic:
- Debt, Economics, and Financial Crisis
- Political Geography:
- Europe, Spain, and Italy
78. Austerity ahead: How will a conservative victory change Spanish politics?
- Author:
- Teemu Sinkkonen
- Publication Date:
- 11-2011
- Content Type:
- Policy Brief
- Institution:
- Finnish Institute of International Affairs
- Abstract:
- The electoral defeat suffered by the ruling Socialist Party (Partido Socialista Obrero Español, PSOE) in the municipal elections and the prolonged financial crisis has forced Prime Minister Zapatero to call an early general election on 20 November. The Conservative People's Party (Partido Popular, PP) is ahead in the polls by a clear margin and is likely to gain an absolute majority in the parliament. The economic outlook for Spain looks bleak, which means that the new government will have to create new jobs quickly and push through harsh and unpopular reforms, particularly regarding the fiscal and administrative structures. The Indignados protest movement is gaining support, and looks set to challenge the legitimacy of the system and force the future government to produce speedy results. Spain is expected to enhance its role in international politics through pragmatic bilateral relations. In particular, relations with the US seem to be warming up, while Spain can turn to the UK and Poland in the EU for companionship
- Topic:
- Debt, Democratization, Economics, and Financial Crisis
- Political Geography:
- United States, United Kingdom, Europe, and Spain
79. Fiscal Asymmetries and the Survival of the Euro Zone
- Author:
- Paul R. Masson
- Publication Date:
- 12-2011
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- The independence of the European Central Bank (ECB), seemingly guaranteed by its statutes, is presently under attack. The ECB has been led to acquire large amounts of government debt of the weaker euro zone members, both to help contain their interest costs and to help protect the solvency of banks throughout the zone that hold their debt. This paper presents a model of a dependent central bank that internalizes the government's budget constraint. Using a Barro-Gordon framework, the model embodies both the desire to stimulate output and to provide monetary financing to governments. As a result of the inability to pre-commit to first-best policies, the central bank produces excess inflation — a tendency partially reduced in a monetary union. The model implies that not only shock asymmetries, but also fiscal asymmetries, are important in the membership calculus of desirable monetary unions. On the basis of this framework, calibrated to euro zone data, the current membership is shown not to be optimal: other members would benefit from the expulsion of several countries, notably Greece, Italy and France. A narrow monetary union centred around Germany is sometimes mooted as a preferable alternative, especially if it could guarantee central bank independence. However, simulation results suggest that such a narrow monetary union would not be in Germany's interest: though better than the euro zone with a dependent central bank, it would not internalize enough trade to make it more attractive than the resumption of monetary autonomy by Germany.
- Topic:
- Debt, Economics, Monetary Policy, and Governance
- Political Geography:
- Europe, Greece, France, Germany, and Italy
80. Outward FDI from Greece and its policy context
- Author:
- Aristidis P. Bitzenis and Vasileios A. Vlachos
- Publication Date:
- 12-2011
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- With the fall of centrally planned economies in the Balkans, their liberalization and the opening of their borders to free trade and capital movements, Greece became more active in the generation of outward foreign direct investment (OFDI). Greece's OFDI stock increased from US$ 3 billion in 1990 to US$ 6 billion in 2000 and to US$ 38 billion in 2010. The Europeanization process of Turkey and the transition of the economies in the Balkans was accompanied by a gradual rise of FDI from Greece into those economies. More than half of Greece's OFDI stock – over US$ 20 billion in 2009 (67% of total) – is located in South-East Europe: in the Balkans, Cyprus and Turkey. While Greece's early OFDI flows were directed to the secondary sector to reduce costs, the bulk of later flows was directed to the services sector, as new markets were opened. This shift signifies the rise of major corporate players. The Greek Balkan policy, which commenced through the European Union, and the upgrading of the Athens Stock Exchange have positively affected Greece's position as a key regional investor. The expectations for sustaining this leading role, however, have been weakened recently since, due to the Greek sovereign debt crisis, Greek multinational enterprises (MNEs) disinvested US$ 1.6 billion from their FDI abroad in 2010.
- Topic:
- Debt, Economics, Foreign Direct Investment, and Financial Crisis
- Political Geography:
- Europe, Turkey, Greece, Balkans, and Cyprus