EconoMonitor

Peterson Institute for International Economics

Roubini Topic Archive: Europe

  • The Political Redefinition of Europe

    Opening remarks at the Swedish Financial Markets Committee’s (FMK) Conference on “The European Parliament and the Financial Markets,” Stockholm, June 8, 2012 For the past few years, headlines in Europe have been dominated by the financial and economic developments of the crisis, first in the banking system and then in sovereign debt markets. Throughout this period […]

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  • Despite Its Troubles, the Euro Area Is Making Progress

    Yes, the headlines from the euro area are discouraging. The region’s Purchasing of Managers Index (PMI) is falling again—to 45.9 in May, with even German levels down. The European stock markets are down. The euro has slid to 1.25 vs. the dollar, accelerating preparations for a Greek euro exit. No resolutions of the political crisis […]

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  • Implementing Basel III in the European Union: A Deeply Flawed Compromise

    By all accounts, EU member countries have for months been debating how to implement the minimum bank capital standards agreed under Basel III. Their arguments have unfolded as the EU works to complete its fourth Capital Requirements Directive (CRD4) and its Capital Requirements Regulation (CRR); (see Véron 2012). Three issues have been contentious: (i) whether […]

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  • Endgame in Greece: Don’t Look for an Imminent ‘Grexit’

    As the countdown toward a new Greek election heads toward June 17, most analysts predict an imminent Greek exit from the euro area. Almost anything can happen, but a few possibilities are worth considering. Any newly elected Greek government will have trouble implementing the current austerity program called for by euro leaders and the International […]

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  • Is Europe Ready for Banking Union?

    Systemic fragility in the European banking sector predates the Greek fiscal crisis. It was revealed by the subprime/Lehman shock of 2007–08, and has never been properly addressed since then in spite of successive stress tests. In recent weeks, several senior policymakers have become more explicit on the need for a banking union—in other words, a […]

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  • Is the Risk Free Status of Euro Area Sovereign Debt in Tatters?

    In the first week of March, the euro area experienced the biggest sovereign debt restructuring in history and the first ever triggering of sovereign credit default swaps (CDSs) for an industrialized country. Yet nothing happened after these events struck Greece. It was a market non-event that was fully anticipated. For the often maligned euro area […]

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  • Will the French Elections Derail the Fiscal Compact in Europe?

    On March 2, 25 European Union members signed their long-discussed fiscal compact, the treaty committing them to balance their budgets in the future, paving the way for national ratification of the compact before January 2013. Most analysts expect the compact to be ratified in most countries. But a few signs of doubt have emerged over […]

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  • Why Greece Must Not Leave the Euro Area

    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. […]

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  • An Alternative for Greece: An Incomes Policy to Achieve Internal Devaluation

    The sad fact is that no one outside officialdom (who are duty-bound to talk nonsense when sense is too embarrassing) seems to regard the recent privately held debt write-down and second Greek bailout as likely to offer an exit to Greece from its nightmare, even in the long run. The reason is simple: Greek competitiveness […]

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  • Brinkmanship in Brussels, Sturm and Drachma for Greece and Europe

    Just as it did when Congress recently extended the payroll tax cut, brinkmanship has produced a deal in Europe to extend a new lifeline to Greece and clear the way for the biggest sovereign bond restructuring in history. Both pieces of the agreement—the privately held Greek debt write-down of more than €100 billion and the […]

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