Stress tests are good, but not enough

By: Wolfgang Munchau

It is important that the EU should extend the stress tests to all relevant banks, but it is more important that member states have a bank resolution strategy.

Globalisation - a primer about the European Debate

Globalisation is the probably the single biggest issue that hit the European Union in this decade. A present but ill-defined fear of globalisation was one of the main reported reasons why the French electorate rejected the European constitutional treaty in 2005. There is a sense in Europe that globalisation is a force that will end up impoverish the continent, that it will destroy its values, and its way of life. It is unlikely that European integration will continue further unless and until the Europeans come to terms with globalisation, and devise a strategy.

Hurrah, the Landesbanken have passed the stress test - financial crisis now officially over

The first leaks of the stress tests are out: In Germany everybody passed, except HRE; Lex said the stress tests demonstrate that an already failed German bank is a failed German bank; if the result are confirmed on Friday, the reaction to this whitewash is likely to be negative; other leaks suggests that the imputed discount on Greek government debt was 23% - but this only affects the trading book, which accounts only for less than 10% of all sovereign bond holdings; no general haircut has been applied in the stress-tests; Lex argues that the problems faced by Ireland’s Nama suggests the difficulties associated to overcome a debt binge; Schauble tells Les Echos that a moderate public sector consolidation will increase private-sector spending; von Mirow warns of a spread of Hungarian crisis; Wolfgang Munchau sees parallels in the fall in the popularity ratings of Merkel and Sarkozy; Kenneth Rogoff, meanwhile, says the case for another stimulus now is weak.

Europe's version of a subprime crisis

This is going to be the most important week in the 11-year history of Europe’s monetary union.

Germany is unfit for the euro

By: Joerg Bibow

Let the Germans have their mark back if they are so keen. Let the new euro-mark rise to US dollars 2 or 2.50.

Greece will have to restructure or reschedule

By: Wolfgang Münchau

The question is no longer whether Greece will go broke, but how.

Why Greece will default

By: Wolfgang Münchau

So, does last week’s agreement mean an end of the Greek crisis, as some of the optimists claim? Let us start with some simple back of the envelope analysis of Greek debt sustainability. This will show that default - under any realistic political and social assumptions - must now be the most probable outcome.