EconoMonitor

Peterson Institute for International Economics

Roubini Topic Archive: Eurozone

  • 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 […]

    More ›

  • 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 […]

    More ›

  • 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 […]

    More ›

  • 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 […]

    More ›

  • 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 […]

    More ›

  • Why President Obama Can Stop Worrying About Europe

    Can President Obama’s increasingly confident reelection drive come undone because of the economic turmoil in Europe? That is a question that many in the White House are said to be worrying about. The fears have some foundation based on recent experience. The relatively strong US economic recovery in early 2010—3.9 percent growth in the first […]

    More ›

  • 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. […]

    More ›

  • 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 […]

    More ›

  • 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 […]

    More ›

  • Europe’s Fiscal Union Still Lacks a Blueprint

    The improvement of euro area market conditions in January can be attributed to several factors, including the progress made by Prime Minister Mario Monti in Italy, and some constructive if Delphic signals coming from Berlin. It also suggests that a lot of bad news was already priced in during December, including a “credit event” on […]

    More ›