European Student Think Tank

The Euro-zone has entered an expec­ted con­sec­ut­ive reces­sion, which has res­ul­ted in dimin­ish­ing pub­lic con­fid­ence in EMU policy-making. With neg­at­ive growth pro­gnosis in the Euro-zone, issues have been mul­ti­plied and solu­tions sim­pli­fied. As a res­ult such a det­ri­mental status quo exacer­bates the incon­veni­ent truth about the com­mon currency.

In the sin­is­ter inter­play between credit raters, banks, European polit­ics and tax­pay­ers, the first two win and the last one loses. European politi­cians should stop deny­ing agency to ‘the fin­an­cial mar­kets’ and act as though they are neut­ral act­ors guided by an invis­ible hand. Rather, they are self-interested act­ors in the global cap­it­al­ist sys­tems. European politi­cians are to blame for not recog­niz­ing this, and for let­ting tax­pay­ers clean up the mess left by fail­ing gov­ern­ments and fail­ing banks.

Great news: in anti­cip­a­tion of a more struc­tural solu­tion to the Eurozone’s debt prob­lems, the euro has been rising in com­par­ison to other world cur­ren­cies for sev­eral weeks. What the, more per­man­ent, sta­bil­iz­a­tion plan will look like has not leaked out yet. Per­haps it will include some plans to fully, or at least par­tially, start [...]

What is the best way to under­stand the cur­rent Euro-crisis? Per­haps the best per­spect­ive is the one of an out­sider: two weeks ago Amer­ican nobel-prize win­ning eco­nom­ist Paul Krug­man wrote a very insight­ful and access­ible ana­lysis of the prob­lems in the Euro-zone. Very worth­while! http://www.nytimes.com/2011/01/16/magazine/16Europe-t.html?_r=1&scp=3&sq=Krugman%20Europe&st=cse