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.

 

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.

Regional multilateralism: The next paradigm in global affairs – GPS

What comes next as a model for dealing with global trouble spots?  Think about more Libya approaches:

In a world of diminished U.S. involvement and unsuccessful multilateralist endeavors, an alternative vision for global engagement is necessary. Instead we are faced with a reluctant China, an unprepared India, an European Union in the midst of a financial debacle and a host of regional powers that focus on their neighborhood rather than claiming a global role. Given these realities, regional multilateralism can serve as the way out from this dead end.

via Regional multilateralism: The next paradigm in global affairs – Global Public Square – CNN.com Blogs.

Why Havel Matters

As the WSJ writes, “A man for all seasons on behalf of liberty,” Havel inspired the world.  The Czech leader also mused that it was harder to put in place his philosophy as his country’s political leader than it was to develop his ideas.  (Interesting that most critics find his art sub-par.)   David Remnick assembles this most worthy reading list that conveys the important issues, thinkers, and ideas of the era.

[A] top-ten list, the first entry being Havel’s greatest hits, and the rest books and writers whom Havel admired—contemporaries or near contemporaries who lived in the same region and under similar regimes.

via News Desk: Reading List: Havel and Beyond : The New Yorker.

And thanks to CFR for assembling Havel’s own “lasting words,”  among which should be the memory of how Havel encouraged Americans to mitigate their isolationist tendencies in the face of the Cold War’s end.  The “Declaration of America’s Interdependence” is, for me, one of Havel’s most important contributions as it updates the post-WWII consensus embodied in our increasingly outdated international organizations.

He grasped, as Max Fisher eloquently observed in the Atlantic, lessons that we need today, including  personal and global responsibility in the face of multiple threats, the importance of a climate freedom and guarantees of peace, and the need to change human nature–a ‘global revolution of human consciousness’ as Fisher quotes Havel’s 1990 statement before the U.S. Congress.

Havel’s track record as a political leader was mixed, which should continue to give us pause as we think about what is happening as Iraq moves out to live on its own, Afghanistan prepares for its own  possible future alone, China continues its peaceful rise and geopolitical power and economic might shifts toward Asia.  Even so, his ideas are his most important contribution:

I favor ‘anti political politics, politics not as the technology of power and manipulation, of cybernetic rule over humans or as the art of the utilitarian, but politics as one of the ways of seeking and achieving meaningful lives, of protecting them and serving them. via Richard Eskow, Huffington Post.

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.

For Turkey, Lure of European Union is Fast Fading – NYTimes.com

Turkey tips eastward.  Is the european moment lost, or just faded?

Meanwhile, Turkish officials say relations with the European Union have reached a state of hopeless disrepair, made worse by the prospect of Cyprus taking over the rotating presidency of the union next year.Turkey has been locked in an intractable political fight with Cyprus since 1974, when it invaded the island to prevent a proposed union with Greece and set up a rival government in the ethnic Turkish part of Cyprus that only it recognizes. In London last month, President Abdullah Gul disparaged Cyprus as “half a country” that would lead a “miserable union,” Milliyet, a Turkish newspaper, reported. Then, when France took the unusual step last week of proposing that Turkey be invited to take part in a meeting of the union’s foreign ministers to discuss Syria, Cyprus vetoed the idea.

via For Turkey, Lure of European Union is Fast Fading – NYTimes.com.

Words of a Euro Doomsayer Have New Resonance – NYTimes.com

Will Bernard Connolly become the Nouriel Roubini of the euro crisis?

The current policy of lending plus austerity will lead to social unrest,” Mr. Connolly told investors and policy makers at a conference held this spring in Los Angeles by the Milken Institute, arguing the case that Greece, Italy, Portugal and Spain could not simply cut their way to recovery.“And one should not forget that of the four countries we are talking about, all have had civil wars, fascist dictatorships and revolutions. That is history,” he concluded, his voice rising above the chortles and gasps coming from the audience and the Europeans on his panel. “And that is the future if this malignant lunacy of monetary union is pursued and crushes these countries into the ground.”

via Words of a Euro Doomsayer Have New Resonance – NYTimes.com.

Mario Monti Accepts Job as Italy’s Premier – NYTimes.com

 

 

A new era for Italy, indeed.  Can Super Mario fix the country that appears to be a much better place to visit than live.

For their part, European leaders had come to see Mr. Berlusconi as a liability both to Italy and to the single currency after his government repeatedly fell short on promises of fiscal and economic reform. Mr. Berlusconi resigned after Parliament finally approved a package of austerity and growth measures but denied him the majority support he needed to remain in office.

The Berlusconi government had been shadowed in recent years by sex scandals surrounding the prime minister. Mr. Monti attended Mass with his wife on Sunday morning in the Roman Catholic Church of Sant’Ivo in the historic center of Rome.

Many Italians awoke on Sunday to what they felt was a new day in Italian politics, even if many did not quite believe that Mr. Berlusconi, a fixture of public life here for nearly two decades, was really gone. Some young Italians, who increasingly feel shut out by a labor market that protects older workers, considered his departure to be good sign.

via Mario Monti Accepts Job as Italy’s Premier – NYTimes.com.