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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 the most anxious year in the history of the euro draws to a close, and with dire predictions about the euro’s fate in 2012, it is an irresistible option for this author to take stock in a more realistic way. Despite all this year’s drama, the value of the euro is almost exactly where [...]
The euro area crisis keeps evolving along multiple dimensions. On the sovereign debt front, no deal is yet in sight on Greece’s debt restructuring, and Italy and Spain face major refinancing needs in early 2012. On the institutional reform front, the summit on December 9 fell short of delivering a true fiscal union, and tensions [...]
Reactions to the results of the annual UN climate change conference that wrapped up last week in South Africa have been all over the map. The AP heralded the outcome as a “landmark deal,” The New York Times and Reuters called it “modest.” And the always astute Michael Levi at the Council on Foreign Relations [...]
Anders Åslund recently wrote a great deal of sense in RealTime (December 5) about a development that no longer looks impossible even if it is widely agreed that it would be unfortunate. I certainly agree that if a euro area breakup happens, it is better that it be done quickly, by all members simultaneously; that [...]
Yet another European Union summit meeting has come and gone surrounded by inflated expectations of a decisive breakthrough in the euro area debt crisis. Employing the same hyperbole applied to the Congressional budget "super committee"—despite the fact that the committee comprised the same members who had gridlocked on the issues beforehand—media commentators measured the summit [...]
On Saturday December 10, the spell of the Vladimir Putin regime was broken. Today, the key questions that many are asking are how fast he will lose power and what will come in his place. Peaceful mass demonstrations took place all over Russia. In Moscow, probably 80,000 gathered on Bolotnaya Ploshchad near the Kremlin to [...]
The excessively gloomy headlines about the imminent demise of the euro currency have at least temporarily receded as European Union (EU) politicians and central bankers play out their sequenced games of political quid pro quo. Progress is being made. Prime Minister Mario Monti has presented a new fiscal package for Italy, which will likely be [...]
Europe is seeking further assistance from the international community through the International Monetary Fund (IMF) to address the crisis in the euro area. The global community has a clear interest in aiding Europe. But the package being developed will be the largest ever adopted by the IMF and poses risks for that institution as well [...]
Everyone wants Iran to abandon its nuclear weapons program, but few urge a military strike. Financial sanctions, including several directed at leading Iranian banks, have been applied and tightened over the years by the United States Treasury, working with European and other allies. Now the Senate has unanimously approved a bill calling on the President [...]
The unthinkable is becoming possible. Until recently, the breakup of the euro area seemed nothing but an illusion, but suddenly this possibility is a clear and evident danger. If the euro area is to be broken up, it should be done as amicably, cleanly, symmetrically —and as fast as possible. A collapse of the euro [...]