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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.
As usual, the European Union Council meeting on December 16 and 17 was accompanied by demands for “bold solutions” and paradigm shifts in the form of fiscal union and eurobonds. And as usual, their conclusions [pdf] were disappointing. Largely at Germany’s behest, EU leaders instead merely agreed to do what they had said they would [...]
Systemic bank crises are always difficult to resolve. In Europe the difficulty is compounded by cross-border interdependencies. Policy paralysis throughout 2009 and 2010 has resulted in a banking system precariousness that puts a serious drag on the old continent’s recovery. An even more dramatic consequence is to force the eurozone to systematically choose bailouts over [...]
The diplomats who gathered in Mexico for the annual UN climate change negotiations in early December surprised everyone, including themselves, when they announced at the end of their session that a deal had been reached. Expectations going into the summit were at rock bottom following the chaos and discord of the Copenhagen meeting one year [...]
As Europe’s financial market contagion spreads to systemically important eurozone members, the region is echoing with “end-game scenarios” and demands for major new steps by European policymakers. Among these would be a European “fiscal transfer union,” a new common eurozone bond, action by the European Central Bank (ECB) to monetize sovereign debts, and finally a [...]
Despite the expanding European commitments of aid for Greece and Ireland, accompanied by increasingly detailed pledges to set up a permanent post-2013 resolution mechanism [pdf], fears of a dreaded sovereign debt contagion have tanked European sovereign debt markets throughout the region, particularly in Spain and Italy. Never has there been more talk of doom for [...]