Post Tagged with: "Europe"

Some thoughts on Dijsselbloem’s ‘liquor and women’ intervention

Last week, I wrote how the Labour Party in the Netherlands suffered a historic defeat in parliamentary elections because voters questioned their priorities – and how this is emblematic of Western social democratic parties everywhere. And as if to prove my point, Dutch finance minister and Eurogroup leader Jeroen Dijsselbloem has produced an analogy on fiscal spending about ‘liquor and women’ that has outraged many. Let me put his comments in the proper context here to make a wider point about the European Union.

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Will Brexit’s trigger, now set for 29 March, mean recession?

Will Brexit’s trigger, now set for 29 March, mean recession?

British Prime Minister Theresa May will trigger her country’s exit from the EU on 29 March, a spokesperson for the Prime Minister has confirmed. Afterwards, the clock will be ticking, as the UK will have two years to wind up any negotiations for exit before the country’s membership ends on 29 March 2019 after 46 years. The biggest questions are what this means for the UK economy, the EU economy and whether it is a precedent others will want to follow. Some thoughts below

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The re-nationalization of eurozone lending

While most analysts have been focused on credit growth which has re-emerged after the sovereign debt crisis, cross border inter-bank lending has decreased, fragmenting the euro zone along national lines. In a crisis scenario, one should expect that fragmentation to increase dramatically, putting extra stress on national central banks and increasing financial fragility in the eurozone’s periphery.

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Germany leading by example

Germany leading by example

Here’s an example of Germany’s leading by example on fiscal policy.

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Two things you should know about Germany’s budget surplus

Two things you should know about Germany’s budget surplus

You probably heard that Germany recorded its third consecutive year of government budget surpluses. This year it was the highest full year surplus since German reunification – 24 billion euros. A lot of the commentary on this will stress whether it’s a good thing or a bad thing that Germany has surpluses. Forget all of that. There are two other things you need to know.

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Why the election timetable favours the Five Star Movement in Italy

Yesterday, I was talking to a veteran journalist based in Rome. He remarked that youth unemployment in southern Italy was 60% and that this was one of the biggest problems to deal with politically. The spectre of strong, able-bodied young men sitting idle is always something that should fill any political system with dread – because it is exactly those same young men who always lead violent protests or revolution, no matter where in the world.

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The negotiations over Greece aren’t about Greece

Earlier today, I was listening to an interview with IMF head Christine Lagarde dance around the issue of the unsustainability of Greece’s debt load. And she said something very telling. She said that debt haircuts were not on the table but that maturity extensions and interest rate reductions were, but only AFTER Greece implemented reforms demanded by the Troika.

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Not All Germans Love The Euro These Days

Not All Germans Love The Euro These Days

Bloomberg View had a good column today on the popularity of the European single currency. The article shows how the euro has gone from being unloved in Germany at introduction in 2002 to well accepted, while the opposite has happened in Italy and France. But behind the aggregates, deep fissures lie that tell a different story. Let me start the conversation on that story here.

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Europe’s delusional economic policies

Europe’s delusional economic policies

Yesterday three big things happened in three different eurozone economies that I think are interrelated. And I am going to tell you what I believe they mean for the European political economy by tying them together in this post under the somewhat provocative banner of “Europe’s delusional economic policies”. The reason for the title is that what I see happening is an anti-growth economic framework which is having political consequences by fomenting nationalism and anti-EU sentiment.

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Trump is dead wrong on Germany. It won’t matter though

Trump is dead wrong on Germany. It won’t matter though

The FT is reporting that US President Donald Trump sees Germany as a ‘currency manipulator’ of sorts, a view bound to have negative consequences on bilateral relations. What’s more, according to the Financial Times, Trump’s top trade advisor, Peter Navarro, has accused Germany of using a “grossly undervalued” euro to “exploit” the United States as well as Germany’s own EU monetary union partners. This makes three countries in Trump’s sights: China, Mexico and, now, Germany.

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Germany is the biggest loser in 2017

Germany is the biggest loser in 2017

As Donald Trump attempts to make wholesale shifts in American domestic and foreign policy, there are bound to be winners and losers economically and politically. Leading German government representatives from Sigmar Gabriel to Frank Walter Steinmeier to Angela Merkel have all taken a vocal stance against Trump’s policies. But the Trump administration appears to be moving in a direction that would weaken Germany’s hand. And so, Germany risks being one of the losers politically in 2017 – something that plays into Vladimir Putin’s hands.

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More on why Britain might not leave the EU and how a second referendum could happen

More on why Britain might not leave the EU and how a second referendum could happen

I have long suspected that an act of Parliament would be necessary to formally trigger Article 50. In an 8-3 verdict today, the UK Supreme Court affirmed this suspicion. Theresa May cannot invoke royal prerogative for the simple reason that leaving the EU is an act that has a tremendous impact on laws governing the UK. And the Supreme Court says these vast changes in UK law require an act of Parliament to decide. At the same time, the Court ruled that Wales, Scotland and Northern Ireland have no devolved powers here, They cannot veto the UK’s exit from the EU.

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