The Euro Area's political constraints

By: Wolfgang Münchau

Not all policy solutions are possible in a monetary union. There are severely constitutional constraints.

Why the European Debate on Competitiveness is going nowhere

Raising competitiveness has been the prime goal of economic policy in Europe. But is it a sensible goal? Those who favour a competitiveness-based approach often make false analogies between enterprises and countries. Countries do not compete in the way companies do. Trade among countries is not about profit but about the division of labour. It can benefit all by raising productivity. A more meaningful concept of competitiveness at the national level defines a competitive country as one that can maintain high rates of growth and employment in the medium term. This concept focuses on the country’s ability to provide its citizens with high and rising standards of living in the medium and long...

What actually happened in Berlin

The German government is all over the place after hearing about French plans for a euro area summit.

Krugman on monetary transmission channels

Monetary transmission channels matter, and particular so for the current US economic downturn.

Contagion everywhere

There is new evidence that the credit crisis is hitting the corporate sector.

Germany's economic mirage

2008 will be another good year for Germany, but then the economic performance will significantly worsen. And it has nothing to do with subprime...

Who is Henri Guaino?

President Sarkozy's European advisor is either stupid or he wants to destroy the euro area - or both.

Why my inflation expectations have gone up

The ECB's policy are consistent with an inflation target of "close to, but below" 3 per cent.