The end of the Greek bailout program: What comes next?
As the Greek bailout program reaches its scheduled end in August 2018, the country’s government and international community must decide what comes next. Some reforms have been implemented, and the public budget even runs a surplus. But the economy remains vulnerable. The EU could dig in and insist Athens reimburses at least part of its debt, or it could cancel it altogether. The latter option is preferable – and more likely – but the EU will have to be ready to stand up to some tough criticism about the precedent it would set.
New narratives emerging on EU finances
The European Union’s inflexible budget process – constrained by seven-year Multiannual Financial Frameworks (MFFs) – has left the bloc almost incapable of handling major crises. The resort to ad hoc solutions over the past decade has only made the situation worse. Now, reformers are considering new revenue sources, and even more revolutionary steps such as EU taxes or a separate eurozone budget.
The consequences of prolonged low interest rates in Europe
Monetary policymakers are becoming preoccupied with the risks of persistently low interest rates to Europe’s still fragile economic recovery. Ultra-easy credit is creating growing economic distortions and asset bubbles, while reviving volatility and risk in financial markets. The European Central Bank realizes it must “normalize” rates, but it worries that sudden tightening could precipitate a financial crisis that could be as bad or worse than 2008-2009.
Opinion: Mario Centeno’s useful ambiguities
New Eurogroup Chairman Mario Centeno is known as a socialist, but despite his “anti-austerity” reputation, he slashed government spending and deficits while he was finance minister of Portugal. This earned him trust on both sides of the fiscal policy divide, and will allow him either to keep the Eurogroup as a low-profile talking shop, or to help it raise its stature to eurozone policymaking body.
Opinion: The day Europe goes bankrupt
You may not be able to see it, but Europe’s biggest economies have piled up enormous amounts of pension debt. The European Central Bank’s policy of target credits and quantitative easing has only made things worse. With politicians seemingly determined not to notice, a systemic implosion may be inevitable.
The future of euroskepticism
While Europe’s populist parties identify the euro as the root of most evils, exiting the common currency won’t solve their country’s economic woes – in fact, the solutions they propose will probably make them worse. Voters have recognized this. But anti-immigration sentiment remains a powerful weapon in their arsenal, and Brussels seems unwilling to take the necessary measures to address it.
GIS Dossier: The strangely resilient euro
The euro has been remarkably stable during its 15-year existence as a major currency. That has not always been a good thing for the European economy. But the real concerns for the single currency hinge on politics and survival.
The twilight of a European dream
As Washington threatens to slap economic sanctions on the countries that it believes weaken their currencies, reaping unfair advantages in trade with the United States, eurozone exporters, especially Germany, may find themselves in trouble. The root cause of the dilemma, though, is the fact that from its inception the common currency has been misused by politicians.