The ECB and the Fed

By: Charles Wyplosz, Graduate Institute of International Studies

Facing different situations, the Fed and the ECB muddle through, each in its own way.

The case against a Grand Coalition in 2009

By: Wolfgang Münchau

Forget all this hogwash about the responsibility of the cenrtre. Grand coalitions are undemocratic.

EU Commission plans desposit insurance directive

Plans to raise minimum protection level to €40,000; the oil price dropped below $125pb, and other commodities have also fallen sharply; Almunia criticises Sarkozy’s plans for the ECB; and Jose Manuel Barroso, meanwhile, says he wants to stay president of the European Commission beyond next year.

Serbia's big step towards EU membership

Arrest of Radovan Karadzic a big step towards pre-accession treaty entering into force; IMF says global imbalances are there to stay; Greece might be forced to revise its fiscal goals; housing crisis might wipe out most of US financial sector capital; the latest constitutional changes in France, meanwhile, still make a referendum on Turkish EU membership highly likely.

Berlin says Nein

Germany rejects French proposals for economic governance reforms; Spain is already in fiscal deficit territory; German finance ministry projects negative growth in Q2; euro reaches all time high against yen; French constitution reform approved; in Austria, meanwhile, anti-European right wing parties are now accounting for 27% of the polls.

Sarkozy calls on ECB to publish minutes

French president proposes three point plan, which also includes a secretariat for the eurogroup and regular dialogue with the ECB; the European Commission wants to crack down on credit markets by forcing issuers to retain a stake of at least 10%; there has been a strong rise in European credit risk premia in the last month; the Irish prime minister Brian Cowen, meanwhile, will tell Sarkozy to back off over a second Irish referendum.

European Parliament wants ECB to change inflation target

Beres and Langen propose higher target, target band, plus official inflation forecast; Trichet rejects the idea; also hints that second-round effects are finally happening; oil price falls below $130, though no consensus on what this means; Belgium’s King Albert II, meanwhile, rejects the resignation of Yves Leterme, and appoints mediators.