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In RealTime posts, PIIE senior staff and colleagues discuss the fast-moving economic news, financial developments, and public policy choices confronting the United States and the world.
A little noticed fact about the economic turmoil in southern Europe is that Portugal and Italy, two of the countries struggling the most, had minimal growth even during the seven good pre-crisis years of 2001–07.1 The most overlooked common problem of the four Southern European countries—Portugal, Spain, Italy, and Greece—is that they are all hampered [...]
The Ukrainian banking system has gone through persistent convulsions in the last seven years. A wave of West European purchases of Ukrainian banks just before the crisis of 2008–09 has been largely reversed. Instead, Russian and Ukrainian state banks have expanded, as have banks owned by people close to President Viktor Yanukovych. In 2006–08, Ukrainian [...]
Russia’s growth rate has fallen suddenly and sharply, and President Vladimir Putin has become publicly agitated in response. After a time of passivity in economic policy, significant changes are to be expected. The dominant concern relates to economic growth, which has almost ground to a halt. On April 22, Putin used these alarmist words at [...]
The next euro country in possible need of an international stabilization program is not Italy but Slovenia. It is suffering from a moderate banking crisis. Newly appointed center-left Prime Minister Alena Bratusek argues that an international assistance program might not be necessary. She might be right, but only if the Slovenian government acts hard and [...]
Just as suddenly as it arose, the Cyprus financial crisis has passed by. The banks have opened and so has the stock market without undue panic. A few steps remain in the euro crisis, but this crisis is abating, and however messily Europe has handled it. Today, the questions are what we have learned, and [...]
Suddenly, Russia has become a central player in the Cypriot financial crisis. On the very evening after the Cypriot parliament rejected a proposed levy on bank deposits that the Cypriot president had previously accepted as a condition for a bailout package of €10 billion, Finance Minister Michael Sarris flew from Nicosia to Moscow. The next [...]
This is the third in a series of postings by Mr. Aslund about debt and fiscal issues in Europe. A previous essay, “EU Countries Know How to Slash Public Expenditures,” was posted March 11. Natalia Aivazova has provided able research assistance. A proposition widely shared among economists is that it is very difficult for western [...]
Second in a series of postings on the European economic and budget situation. I am grateful to Natalia Aivazova for valuable research assistance. See also A Reassuring Choice for the Central Bank of Russia. Corporate profit taxes have fallen like stones throughout Western Europe in the last three decades. At the same time, their revenues [...]
On March 12, President Vladimir Putin appointed Elvira Nabiullina, 49, chairwoman of the Central Bank of Russia. This is an important political appointment, and a reassuring one. Nabiullina is eminently qualified, and her selection puts the central bank in a safe pair of hands at a time of roiling uncertainty over other aspects of the [...]
Note: Natalia Aivazova has kindly provided me with excellent research assistance. Western democracies are commonly believed to be unable to cut public expenditures substantially. This would imply that they are not capable of resolving financial crises that erupt from time to time. Fortunately, this assumption is not correct, as is evident from the Eurostat financial [...]