After Dubai, now Greece?

By: Wolfgang Münchau

The EU will not come to the rescue unless Papandreou does the opposite of what he promised.

The Stability and Growth Pact

The Stability and Growth Pact (SGP) forms part of the rules and procedures for fiscal policy of the member states of the euro area. The SGP has been subject to criticism long before it was officially agreed at the EU summit in Dublin in 1997 and ever since. The debate about the SGP reflects some of the deep ideological divisions that have accompanied the creation of economic and monetary union. The opponents of the SGP have criticised inter alia that it is pro-cyclical and anti-growth.

“Greek crisis over” – Our ability to delude ourselves has reached the next level

EU and ECB declares victory: European rules and institutions have worked, as Greece manages to sell €5bn in a 10-year bond issue, albeit for a yield of 6.25% - which underscores the country’s near-junk status in global bond markets; Le Monde says all good, but Greece will still need the money, and is still planning to go the IMF if the Europeans not pay up; ECB leaves interest rates unchanged, and sticks to its not-so-optimistic economic outlook; declines any comment on reports that the ECB might drive out rating agencies; Trichet praises the Greeks for not (yet) seeking IMF assistance; the FT has an article explaining how hedge funds were involved in the Greek CDS saga – they were buyers a long time ago, but sellers most recently; an Italian MP has started a campaign for Mario Draghi as president of the European Central Bank; Michael Petis says that Japan did manage to adjust to its crisis, but differently than previously thought, and that this may also be the case in China; Yves Leterme, meanwhile, calls for a European Debt Agency.

When Does It Hurt?

By: Ansgar Belke

The exchange rate “pain threshold” for German exports is at $1.55 to the euro.

In defence of an unconventional monetary policy

By: Adam Posen

There is no evidence from relevant periods of economic history that unconventional monetary policy measures result in high or sustained inflation.

After Lisbon

By: Wolfgang Münchau

It looks like the Lisbon Treaty will be passed. And then what? The Treaty is irrelevant for helping Europe solve its most urgent economic problems.

Why Minsky was right: The next bubble is already under way

By: Wolfgang Münchau

By all measures, the next equity bubble has already started. The main difference to the previous boom-bust episode is that this bubble will burst sooner.