DiEM25
Europe’s Modern Titanomachy: How Europe’s future is being shaped by large battles on seemingly small matters (Part B)
, 13/09/2012
PART B – Mr Draghi’s nod to Euro-loyalists On 8th August 2012 the President of the ECB acknowledged that the Eurozone was at an advanced process of disintegration and, in the same breath, promised to do what it takes to put a stop to it. On September 6th came his OMT announcement that many commentators […]
Europe’s Modern Titanomachy: How Europe’s future is being shaped by large battles on seemingly small matters
, 12/09/2012
PART A – In the balance They sound technical and minor when projected against the great scheme of Europe’s extraordinarily rich history. Will there be conditionality attached to the ECB’s bond purchases? Will the bonds that it purchases be treated on a pari passu basis in relation to bonds held by private institutions? Will the […]
While awaiting Mr Draghi’s 6th September statement, a reminder: “It is the German banks, stupid!”
, 04/09/2012
In April 2011 I wrote a piece, entitled “It is the German banks stupid” in which I claimed that the primary reason why Europe was allowing a preventable debt crisis to engulf the Periphery had to do with the sorry state of the German banks and with the determination of the German government to do […]
In Praise of Public Investment: On the importance of Mariana Mazzucato’s article in The Guardian
, 03/09/2012
Two are the greatest untruths that have inflicted major damage upon our understanding of how social economies work; and, by extension, upon our societies. First, there is the pseudo-‘law’ of ‘crowding out’; i.e. the illusory belief that when public investment increases private investment suffers. Secondly, there is a widespread misconception that, under capitalism, value is […]
The three conditions for the ECB to cap spreads successfully: and why they will not be met
, 23/08/2012
Adam Smith believed that it was part of human nature to truck, barter and exchange. I am not so sure that he is quite right. What I do observe, however, is that it is in the ‘nature’ of the ECB Council to dither, dawdle and evade.
A warning from the past: N. Kaldor on the Eurozone
, 20/08/2012
They say that bright minds see well into the future, unimpaired by models, simulations and computational statistics. As evidence of this, consider the following lines from 1971. They was written by Nicholas Kaldor, a highly esteemed Cambridge economist who passed away in the mid-1980s. Discussing the prospect of a United States of Europe, which he […]
What Mr Draghi should be aiming at: Or how to move from Ponzi Austerity to Rational Crisis Management by a stepwise implementation of the Modest Proposal
, 17/08/2012
Ponzi growth happens when unsustainable capital flows, wilfully predicated upon funding schemes that Reason knows to be fraudulent, give rise to large spurts of economic activity. Ponzi austerity, in contrast, is what happens when unsustainable spending cuts, wilfully predicated upon funding schemes that Reason knows to be fraudulent, cause significant drops in economic activity. (Click […]
Punishment or Aid? Holland’s TROUW newspaper sets up a debate between myself and Hans Werner Sinn
, 17/08/2012
You may recall the mental experiment that I suggested for working out the true, underlying mood towards Greece (and the rest of the Periphery). Now TROUW has published that piece, in translation of course, and has juxtaposed against Hans Werner Sinn’s take (which comes as close to confirming, in my biased eyes, the point I […]
Convertibility Risk: Acknowledged but not addressed
, 06/08/2012
Further to my previous post on Mr Draghi’s recent undermining of the Office of ECB President, Gavyn Davies of the FT penned the following line: “It is risky for a central banker to acknowledge that the payments system on which the currency stands may not be fully credible. Mr Draghi could simply have repeated the old […]
The week when Mr Draghi greatly diminished the office of ECB President and sacrificed the fiscal-monetary policy distinction
, 03/08/2012
First came the impressive declarations: The ECB will do whatever is necessary to ensure that those who go short on the euro, who bet on its disintegration, will lose. “And, believe me”, he added “it will be enough”. He also, rather significantly, uttered the term ‘convertibility risk’ (code-words for the risk that funds kept in […]
Depression in the Eurozone’s Periphery and how to restore Aggregate Demand without creating new bubbles: My reply to Kantoos Economics
, 30/07/2012
Preamble: Kantoos Economics recently posted an article discussing points of agreement and points of disagreement between us regarding the restoration of growth in Greece, both in the short and in the long run. Here is my reply. The problem with any Crisis is that it eliminates the type of scarcity which helps two crucial markets […]
23 crucial days for Greece
, 28/07/2012
On 20th August, the Greek government will have to borrow 3.2 billion from one arm of the Eurozone (from the EFSF) in order to repay another (the ECB). Yet Greece is insolvent. The very idea of an insolvent entity borrowing more from a community, like the Eurozone, in order to repay that same community is […]
A Mental Experiment for establishing the relative mood for solving the Crisis in Europe, in Britain & in the USA
, 23/07/2012
I have a hunch: that the Eurozone’s profound difference to both the United States and Britain is that, unlike these anglosaxon ‘currency unions’, the Eurozone’s real elite does not want the Crisis to disappear quickly and painlessly. In this post I offer a mental experiment that will help each and every reader rule on the […]
On the solvability of the Euro Crisis and the mood in Germany: Concluding my debate with Kantoos Economics
, 22/07/2012
Kantoos Economics (KE) replied to my post on what constitutes a rational and decent critique of Germany’s stance during this Euro Crisis. After a series of exchanges between us, I think that this dialogue is now reaching its natural limits (click the following for a blow by blow perusal of our debate: KE1 was KE’s original […]
What the EIB makes the ECB unmakes: The latest from the Greek front
, 22/07/2012
“We just showed that good news is possible in Greece”, said a beaming Greek minister the other day when it was announced that the European Investment Bank (EIB) was about to start funding investments in Greece again, after it withdrew toward the end of 2011 (in fear of losing its triple-A rating by associating itself […]
It is now official: The Eurozone's monetary transmission system is broken
, 17/07/2012
Under normal conditions, the interest rates that you and I must pay on a home loan, a car loan, our credit card, a business loan are pegged onto two crucial rates. One is the rate that banks charge one another in order to borrow from each other. The other is the Central Bank’s overnight rate. Alas, […]
Criticising Germany: Three principles for the fair assessment of proud nations
, 09/07/2012
Generalising is the first step toward racism. Every sentence beginning with “The Germans believe this” or “The Greeks do that” is an initial slide on a slippery slope leading, eventually, to bigotry. As I have argued before (click here for a video version) there is no such thing as the Germans, or the Brits, or the Greeks […]
The Latin Troika's Coup: what is left of the joy it generated a week later
, 04/07/2012
The half life of joy and celebration, following Europe’s Summits, is continuing to slide. The 19th such Summit since the Crisis erupted was, as I wrote here, the most successful (in that it produced, for the very first time in two and a half years) a decision that is not wholly fraudulent, irrational and irrelevant. It was, […]
Unanimity is not essential to cutting the ‘Gordian debt’: our letter to the FT as published today
, 02/07/2012
The other day I posted a letter that Stuart Holland and I sent to the Financial Times. Today it was published. Click here for the FT or…
June 2012 EU Summit Verdict: A good decision that will, probably, go to waste
, 29/06/2012
Mrs Merkel went to Brussels intent on striking two birds with one stone, pick up her bag immediately and return to Berlin with no further ado. The stone was the fraudulent re-packaging of existing structural and EIB funds (with the addition of a paltry 10 billion euros) into a grandiose-sounding ‘Growth Pact’. The two birds […]
Saving the Eurozone does not depend on Germany: Our letter to the Financial Times
, 28/06/2012
From Professors Stuart Holland and Yanis Varoufakis Europe is deadlocked in assuming that resolving the Eurozone crisis must be unanimous. Yet it does not need this. It could do so by ‘enhanced cooperation’ which needs support by nine or more member states while, on a motion for an enhanced cooperation policy, only those supporting it […]
A(nother) PROPOSAL FOR SAVING THE EURO ZONE: Guest post by Marshall Auerback
, 28/06/2012
This blog was established, initially, for the purposes of proposing solutions to the euro crisis; and in particular to propagate our Modest Proposal for Resolving the Euro Crisis. Two and a half years later, the eurozone is crashing and burning, while European politicians are steadfastly refusing to adopt a systemic solution. Those of us who […]
Open letter to a good friend and colleague (who happened to become Greece’s Finance Minister yesterday…)
, 27/06/2012
Dear Yanni, On the one hand I am writing to congratulate you. And on the other to express my disdain towards those who handed my friend the good ship’s wheel after the vessel has struck the iceberg. Utterly familiar with your effervescent optimism, I know you mean it when you declare confidence in Greece’s capacity […]