The deal that may make or break the eurozone

It is no secret that the top priority of the new Greek government will be to negotiate a reduction in the country’s debt – as well as to broker softer terms on the austerity conditions forced by its creditors. Until as recently as the wee hours of Thursday, I thought that this would be unethical. Here is the […]

Turkey: The markets’ Cinderella Man

Seen as one of the most vulnerable emerging markets (EMs) not too long ago, Turkey is on a Cinderella run, attracting significant capital inflows. Foreigners’ net equity and bond investments rose by $0.9 and 1.4 billion respectively during the last four weeks. Here is the intro. to my latest Hurriyet Daily News (HDN) column, where […]

Is the BRICS Contingent Reserve Arrangement a Substitute for the IMF?

Russian President Vladimir Putin has hailed the new BRICS contingent reserve arrangement (CRA) as a substitute for the IMF, saying that it “creates the foundation for an effective protection of our national economies from a crisis in financial markets.” But does it? Under the terms of the arrangement, China can, without being on an IMF […]

Hard Work and External Help: How to Successfully Conduct Macroeconomic Adjustment With Official Assistance

What are the factors that ensure a successful and durable completion of a financial assistance programme? Past experience with IMF-supported adjustment programmes underlines the importance of external conditions but also of fiscal consolidation, financial repair and structural reforms. These findings vindicate the strategy pursued in recent adjustment programmes in the euro area: putting the fiscal […]

The BRICS and the Bretton Woods Twins

The World Cup was not the only event of global significance to take place in Brazil this summer. The leaders of Brazil, Russia, India, China and South Africa met in the city of Fortaleza and announced the formation of two new financial institutions. One is the New Development Bank (NDB), which will finance “sustainable development” projects, […]

Is the BRICS Bank More ‘Democratic’ Than the World Bank?

The launch of the new BRICS development bank “reflects the disparity and democratic deficiency in the global governance and is trying to restart, to rethink that,” according to Nobel economist Joseph Stiglitz.  But is the BRICS bank really more “democratic” than the World Bank, whose governance legitimacy its founders are challenging? As the Geo-Graphic above shows, […]

Hurling BRICS at the World Bank and the $

Brazil, Russia, India, China, and South Africa (the “BRICS”) made a splash last week with the official launch of their new development bank.  The backers made no secret of their intention to challenge the way things are done in the established international financial and monetary architecture. The irony is that India and China are the […]

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