Ireland's painful adjustment

By: Alan Ahearne, NUI Galway

After the benefits of EMU, now come the costs.

My three point plan for the G20

By: Wolfgang Münchau

Coordinate a stimulus, pool the euro area's seats at the IMF, and start thinking about exchange rates.

Germany has another Landesbank

German governments injects €10bn in Commerzbank for a 25% stake; German exports fell by over 10% during November; France emulates Germany’s attempts to set up a fund to support credit constrained companies; Merkel and Sarkozy have a tough message for Obama: don’t block our attempts to reregulate finance; how about this for a record: the Bank of England, meanwhile, cut interest rates to the lowest level since 1694.

ECB may be more cautious next week than some believe

Policy makers insist that current interest rates are in line with medium term price stability; A total collapse of gas supplies from Russia is becoming increasingly likely; Kostas Karamanlis fires his finance minister, George Alogoskoufis; Sarkozy says he is against consumption stimulus; a German bond auction flops; the US Congressional Budget Office produces a nasty forecast for the US output gap.

Commission warns about centrifugal forces in euro area

Almunia wants to widen the finance ministers’ policy agenda beyond fiscal coordination; Europe is suffering from severe supply shortages of Russian gas; the euro tumbles as market expect interest rates to fall much faster; Germany’s plan to introduce a €100bn fund to help industrial companies through the crisis; the oil price, meanwhile, is back above $50bp.

Germany on course for a €40-50bn stimulus

First coalition meeting brings no deal, but agreement to seek a package within a few weeks; several European countries are reporting a deterioration in the fiscal position due to the recession; Spanish and Italian inflation has fallen sharply; German banks are reducing credit to large companies; in the US, meanwhile, credit market indicators suggest a slow return to normality.

Papademos says eurosystem should supervise large banks

ECB vice president says co-ordination among existing supervisors is not sufficient to deal with the challenge of cross-border banking; German coalition parties are preparing for a €40bn stimulus package; the Czech prime minister plans a timetable for euro area accession; Martin Feldstein, meanwhile, repeated his prediction that the euro is ultimately doomed.