Daniel Gros
Daniel Gros is Director of the Center for European Policy Studies.
-
2012-02-03
| As the European economy risks falling into recession, many observers are asking whether austerity could lead to such a sharp decline in economic activity that revenues fall and the fiscal position actually deteriorates further. But it would be dangerous for the eurozone’s highly indebted countries to abandon austerity now.... read |
-
2012-01-03
| Great empires rarely succumb to outside attacks. But they often crumble under the weight of internal dissent – a vulnerability that seems to apply to the eurozone as well.... read |
-
2011-12-07
| Despite sufficient economic resources, EU leaders have failed to come up with a solution to the eurozone debt crisis and are now seeking external aid. But Europe’s policymakers cannot offshore a problem that Europeans can and must address by themselves.... read |
-
2011-11-03
| Greek Prime Minister George Papandreou’s call for a referendum on the rescue package agreed at the eurozone summit in October has profound implications for European governance and the euro's future. Financial markets have reacted so strongly because investors now comprehend that “sovereign debt” is the debt of a sovereign that can simply decide not to pay.... read |
-
2011-11-02
| A central bank always has a crucial role to play in a financial crisis. But the ECB’s role within the eurozone nowadays is even more “central” than that of the Federal Reserve or the Bank of England, because it has been forced to substitute for the cross-border interbank market.... read |
-
2011-10-05
| The eurozone might just be stepping back from the brink – that is, if a new framework to resolve the ongoing sovereign-debt crisis includes liquidity support for solvent governments. If investors knew that a liquidity squeeze was no longer possible, they would refrain from speculative attacks on such governments' bonds.... read |
-
2011-09-06
| Interest rates are now close to zero throughout the developed world, but the global economy is slowing down, and financial markets went into a tailspin during the summer. The fundamental problem is simple: the market cannot be brought back into equilibrium when savers do not want to lend to those who would be willing to take these savings.... read |
-
2011-08-05
| Governments in the eurozone’s periphery, including Spain and Italy, now face a dilemma: they must undertake structural reforms to increase their long-term potential growth, but at the cost of even greater short-term pain. The debt crisis will end only when they have shown that they have understood this and accepted the inevitable sacrifices.... read |
-
2011-07-07
| Karl Marx famously wrote that history repeats itself as farce. In the case of Greece, history looks more like a much larger version of Argentina’s tragedy.... read |
|
The EU’s Rules to Default By
|
Daniel Gros 
|
|
Greece’s troubles with its ballooning public debt are again throwing Europe’s financial markets into turmoil, because the entire regulatory framework for the financial system was built on the assumption that government debt is risk-free. We now know that it is not, though EU regulators are still encouraging banks to take on as much of it as they want.... read
|
-
2010-09-03
| The slowdown in the pace of economic recovery, particularly in the US, has predictably led to calls for further fiscal and monetary stimulus. But economic policy can do little more than ease the social pain of the long and difficult structural adjustment that countries like the US face as they try to re-establish the skills needed to strengthen exports.... read |
-
2011-06-03
| Greece’s troubles with its ballooning public debt are again throwing Europe’s financial markets into turmoil, because the entire regulatory framework for the financial system was built on the assumption that government debt is risk-free. We now know that it is not, though EU regulators are still encouraging banks to take on as much of it as they want.... read |
-
2010-09-03
| The slowdown in the pace of economic recovery, particularly in the US, has predictably led to calls for further fiscal and monetary stimulus. But economic policy can do little more than ease the social pain of the long and difficult structural adjustment that countries like the US face as they try to re-establish the skills needed to strengthen exports.... read |
-
2010-06-04
| The EU is now obsessed with closing the competitiveness gap that has emerged between eurozone countries. But this approach risks leading in the wrong direction, because competitiveness is a relative concept: restoring competitiveness in some countries, such as Greece and Spain, would require others (Germany in the first instance) to accept deterioration in theirs.... read |
-
2010-11-03
| For decades, the world has complained that the dollar’s role as global reserve currency has given the US guaranteed access to cheap money. But there is no free lunch; the US must choose between job creation, which requires a more competitive exchange rate, and cheap financing of its external and fiscal deficits.... read |
-
2010-07-07
| Europe’s policy makers have let themselves been misled by politically convenient views of the crisis, first believing that all problems came from the US, and now blaming reckless fiscal policy by the eurozone's southern members. But the real problem is the EU's weakly capitalized banks, which are so interconnected that problems in one country quickly jeopardize the entire system. ... read |
-
2010-04-23
| Unless Greece reschedules its massive debt, it is unlikely to be able to roll over the approximately €30 billion maturing annually for the next few years. But if Greece reschedules its debt in the absence of a credible fiscal-adjustment program, financial markets would view the delay as merely a prelude to eventual default, which would drive the risk premium on Greek debt even higher.... read |
-
2005-03-03
| Most independent observers agree that the European Union’s budget no longer reflects its main tasks and policy goals. Aid to agriculture, a declining sector, consumes over 40% of spending and little is spent on the future (R&D) or on fields in which the EU must assume new responsibilities, such as internal and external security. ... read |
-
2008-02-07
| Over the last three decades, house prices in the US and Europe have tended to follow three slow-moving, related boom-bust cycles. If that pattern holds, the downturn in house prices will not be limited to the US, and, on both sides of the Atlantic, the decline is likely to undermine consumer spending.... read |
2012-02-03
