Following the Euro Crisis

As an addenda to an outstanding panel this week at Utah-Europe Days 2012 consider these resources for rolling the unfolding Euro crisis:

1.  Interactive table to compare cost competitiveness between unit labor costs and industrial production - Economic disjunction within the eurozone – FT.com.
2. Three-part investigation by Tony Barber of FT from October 2010 titled “Saving the euro: Dinner on the edge of the abyss” and the full in depth FT section.
3. Tracking Europe’s Debt Crisis offers a news development play-by-play, complete with vital stats, upcoming events, and even articles from the NYT treasure trove.
4. Economist.com’s feature “The euro-zone crisis” including articles organized by category, leading with “Europe’s achilles heel”
5. Smart views from SimonJohnson on the end of the Euro, two bad options and a link to a very useful “big picture” from Bill Marsh at NYT showing the interconnections.

 

CFR Convenes “Council of Councils” Linking Leading Foreign Policy Institutes From Around the World – Council on Foreign Relations

A new coalition of leading foreign policy think tanks tracks issues from a configuration roughly equivalent to the G-20:

CFR will convene the inaugural Council of Councils conference on March 12-13 in Washington, DC. Participants will tackle four major themes at this first gathering:

—the overall state of global governance and multilateral cooperation

—the status of the nuclear nonproliferation regime with a focus on Iran

—the dollars future as the worlds reserve currency

—the criteria for humanitarian intervention, in the wake of regime change in Libya and the ongoing crisis in Syria

via CFR Convenes “Council of Councils” Linking Leading Foreign Policy Institutes From Around the World – Council on Foreign Relations.

Top Risks: the G-Zero, Europe, and Cybersecurity

In case you missed this report from Ian Bremmer and Eurasia Group:

This major transition will intensify all the other Top Risks for 2011-including the potential for uncontained crisis in Europe; tensions in cybersecurity and geopolitics; an unwillingness of China to respond to growing international pressure; provocations from North Korea; and currency controls.

via Eurasia Group.

Other problems include US gridlock, Pakistan, NK, Mexico, and more.

The Failing State of Greece – NYTimes.com

Before we can fix Greece we have to understand the nature of the problem.  What is wrong with this nation-state?

What are we to make of Greece, which borrowed beyond its means and now has been pushed to the brink by its lenders? Is it the “problem child” of Europe, more corrupt and dysfunctional than its neighbors? Is it a special case, as the lenders are saying, hoping that after the write-down of Greek debt last week they won’t have to restructure other ailing euro zone countries’ large public debts? Or is it in fact a harbinger, a vision of how economic collapse transforms a country — or of what happens to democracy when banks become more powerful than political institutions?

While the mainstream political parties suffer under the weight of their own mismanagement and of the austerity they have pledged and reforms they have often struggled to enforce, unemployment and homelessness rise and the European Union inches toward transforming its institutions to get behind a currency battered by fast-moving market forces. Something profound and distressing is happening: the rapid dissolution of a democracy in plain sight. As I stood outside the Attikon last week, I asked myself: Where is the line between a weak state and a failed state?

via The Failing State of Greece – NYTimes.com.

Greece’s Tragedy

Best update on Greece on Diane Rehm yesterday–at least since I read the brilliant Vanity Fair piece by Michael Lewis.  What is clear:  The bailout will delay an inevitable default.  Greek citizens will suffer.  The country has been run poorly.  And as with the Wall Street bailouts, its not fair–but the larger issue is a downward, uncontrollable spiral that could wreck havoc on the Eurozone as well as the global economy.

Greece has finally secured a new $170 billion loan from its European landlords, and the terms are just as unrealistic and doomed-to-fail as you expected. The fact that the country requires a second bailout that’s practically the size of its economy — now crashing through $270 billion and still falling* — tells you what you need to know about the hopelessness of Greece.

via Greece Is Still Doomed: Why the New Bailout Is a Fantasy – Derek Thompson – Business – The Atlantic.

Deep Dive Series at FP | Managing a Changing World

Great briefings on emerging issues facing global governance in short pieces from FP.com.  (I somehow missed this series but appreciate the authoritative commentary, somewhat wide-ranging views, and engaging, magazine-style writing that will help students and policymakers keep informed.)

The focus on “Managing a Changing World” reframes the landscape in which the US is neither the global boss nor the lowest serf:

The trajectory of the rising powers is uncertain, but their current influence is a central fact of geopolitics. Already the financial crisis, the Copenhagen climate negotiations, and the Iran sanctions dust-up have illustrated the potential, the pitfalls, and, above all, the centrality of the relationship between American power and the influence of rising actors. The emerging powers cannot dictate the shape of the coming era, but they can block and complicate U.S. initiative. From its new position, the United States confronts not a rigid bloc of emerging powers, but complex and shifting coalitions of interest. The greatest risk lies, not in a single peer competitor, but in the erosion of cooperation on issues vital to U.S. interests and a stable order. U.S. power is indispensable for that purpose, but not sufficient. No longer the CEO of Free World Inc., the United States is now the largest minority shareholder in Global Order LLC.

via Managing a Changing World – By Bruce Jones | Foreign Policy.

England v. Europe and End of the Dream

The stakes are rising, and Krugman calls it a “depression” with an authoritarian slide occurring “in the heart of Europe.”  Meanwhile, the EU and UK square off in something far more serious than soccer, leaving Cameron “alone on the island.”

Nobody agrees about what the consequences are now going to be. Some think this is a real turning point: The rest of Europe will forge ahead with a closer fiscal relationship and will simply begin making treaties without Britain—treaties that the British and their banks will simply have to follow if they want to do business with their nearest neighbors. Others note, accurately, that the new treaty arrangements (which still may not prevent economic crisis, by the way) will be under negotiation for a good while longer, and the British may find a way to slide themselves back into the loop if they want to.

But even if everyone keeps muddling along, as they so often do, this sudden moment of isolation won’t be quickly forgotten.

via England vs. Europe: Why David Cameron rejected a treaty to save the euro. – Slate Magazine.

Europe’s Real Puzzles Can’t Be Answered in a Crisis: Clive Crook – Bloomberg

Much talk over the EU summit this week.  The future of Europe hangs in the balance:

Yet this would leave vitally important questions about Europe’s future unanswered or even unaddressed. The depth of the crisis and the ineptitude of the EU’s collective leadership — if one can call it “leadership” — have conflated three distinct issues. Keep each separately in mind when asking, “Is this deal of any use?”

The first is how to stabilize Europe’s economy. The second is how to avoid a similar breakdown next time. Even more important is a third question, one that Europe’s leaders invariably ignore: how to secure the right of Europe’s citizens to hold their governments to account.

The nuttiest aspect of the current talks has been Germany’s insistence that the second question comes first. Conceivably, I grant you, this could make sense. You might say, for instance, that to lessen any future moral hazard, Italy’s debts should never be underwritten by the EU as a whole. That idea would be wrong, but it would at least be intelligible. And it would answer questions one and two together: no bailouts, now or in the future.

via Europe’s Real Puzzles Can’t Be Answered in a Crisis: Clive Crook – Bloomberg.

A Rags-to-Riches Career Highlights Latin Resurgence – WSJ.com

Need some good news this weekend?  How about the real rise of the per capita income and fall of the regional poverty rate, according to the UN?

While that income level is below what would be considered middle class in the U.S. or Europe, it is one way to define middle class: individuals earning between about 45% and 70% of per capita income.

A study this year by the United Nations Economic Commission for Latin America and the Caribbean concluded that tens of millions of the region’s inhabitants have risen into the middle class over the past two decades. That’s prompted “a notable expansion of the consumer market,” thanks to growing economies, greater access to education and lower birth rates.

Millions of Latin Americans—construction workers, cooks, secretaries and micro-entrepreneurs—have punched their ticket into the consumer class over the past decade. Some eight million Brazilians took their first plane ride during the past 12 months, according to Sao Paulo’s Data Popular market research firm. In Mexico, the number of credit cards in circulation has quadrupled to 24 million over the past decade. In downtown Lima, middle-class consumers have turned a chaotic 40-block stretch of shops in the Gamarra district into a retail powerhouse, with an estimated $1.5 billion in annual revenues, says Peruvian consultant Juan Infante.

via A Rags-to-Riches Career Highlights Latin Resurgence – WSJ.com.

Serious Minds Debate the N.American Economy

Summary from the Munk Debates in Toronto via Ian Bremmer with the topic “Be it resolved North America faces a Japan-style era of high unemployment and slow growth.”

A vote taken before the debate revealed that most of the crowd agreed with Krugman and Rosenberg on the pessimistic side of the question. Before the debate began, 56 percent voted in agreement with the proposition. 26 percent disagreed, and the rest were undecided. The vote immediately following the debate suggested that Larry and I had managed to swing all the undecideds and a few of those who had voted in favor. We narrowed the final margin to just 55-45 in favor of the proposition.

via Munk Debates: Bremmer and Summers vs. Krugman and Rosenberg – By Ian Bremmer | The Call.

Most helpfully, Bremmer offers links to the full debate as well as the arguments for and against the proposition.