The World Bank is the second best international organization after the International Monetary Fund (IMF) in terms of reputation and quality, but it is an institution of diminishing significance. Its current president, Robert B. Zoellick, is stepping down at the end of his five-year term, and the Obama administration has announced that it will nominate […]
The two most crucial questions about the Greek public debt crisis have been whether the country would be forced to default on its public debt and whether it would have to leave the euro area. At present Greece has pursued an orderly default on its privately held debt, but it remains in the euro area. […]
Last week’s renewed anxiety over bond market collapse in Europe’s periphery should come as no surprise. Greece’s EU/IMF program heaps more public debt onto a nation that is already insolvent, and Ireland is now on the same track. Despite massive fiscal cuts and several years of deep recession Greece and Ireland will accumulate 150% of GNP in debt by 2014. A new road is necessary: The burden of financial failure should be shared with the culprits and not only born by the victims.
On January 1, 2009, Gazprom cut off natural gas deliveries to Ukraine claiming that it had failed to pay for gas deliveries in 2008 and for the penalties exacted from these delayed payments, and because no agreement had been reached on the price for deliveries in 2009. After Ukraine began charging gas as payment for its transit services, Prime Minister Putin ordered drastic cuts.
Suddenly, Russia stands out as one of the countries likely to be worst hit by the international financial crisis, although it entered the crisis with huge budget and current accounts surpluses since 2000 and the third-largest currency reserves in the world. It would be unfair to blame only international markets, as Prime Minister Vladimir Putin does, considering how flawed his own economic policy is.
This is the worst global asset bubble and financial panic since the Great Depression of 1929–33. Still, almost all argue that it cannot become equally bad, because we have learned those lessons.