Germany and the Euro-Surrealpolitik

This articles reviews the theory behind Optimum Currency Areas and the lack of willingness in the European Union and particularly of Germany to lead the process of political and fiscal unions. With Britain maintaining its euro-skeptical status and France and Italy immersed in political crisis, there remains little hope that the Eurozone will ever become […]

The Thermidor: Push Back Against Germany

European officials found a compromise between those wanting to allow the ESM to recapitalize banks directly, until the bank financed resolution funds has adequate resources, and those that who were opposed.  German opposition was most vocal and the compromise was to allow the German parliament veto power over any direct aid from the ESM. Others may […]

What Should Be Done About Germany’s Current Account Surplus?

On November 13, the European Commission released the Alert Mechanism Report (AMR) for 2014 as part of its annual cycle for identifying and addressing macroeconomic imbalances (the so-called Macroeconomic Imbalance Procedure). Based on a scorecard of macroeconomic indicators with indicative thresholds, the AMR identifies those countries for which an in-depth review of potential macroeconomic imbalances and corresponding […]

EC Investigation Calls into Question Sustainability of German Subsidies

While the shale boom in the US has lowered electricity bills for consumers, Europeans are struggling to keep up with rising energy costs, in large part due to ambitious emissions targets set by the EU. In Germany, known for both its aggressive push towards renewables and the storied competitiveness of its exporters, companies may soon […]