Wednesday, July 29, 2015
  1. Don’t Lend to Your Euro Friends

    Hans-Werner Sinn

    Don’t Lend to Your Euro Friends

    5

     warns that the European Union must stop socializing member states' sovereign debt.

    Greek Parliament Athens Kostas Pikoulas/ZumaPress

    After months of brinkmanship, and only a week after Greek voters rejected the conditions for a rescue package, the eurozone's political leaders agreed to start negotiations on a much larger package, worth almost half of Greece’s GDP. Unfortunately, the deal reveals Europe’s apparent determination to reenact the same tragedy in the future. READ MORE

  2. The Lethal Deferral of Greek Debt Restructuring

    Yanis Varoufakis

    The Lethal Deferral of Greek Debt Restructuring

    6

     asks why Greece's creditors refuse to write down old loans before issuing new ones.

    Alexis Tsipras and Euclid Tsakalotos Marios Lolos/ZumaPress

    The point of restructuring debt is to reduce the volume of new loans needed to salvage an insolvent entity: Creditors offer debt relief to get more value back and to extend as little new finance to the insolvent entity as possible. Remarkably, Greece’s creditors seem unable to appreciate this sound financial principle. READ MORE

  3. The IMF’s Euro Crisis

    Ngaire Woods

    The IMF’s Euro Crisis

    5

     identifies six lessons that the Fund failed to apply in the Greek bailout.

    Christine Lagarde IMF/Flickr

    Over the last few decades, the IMF has learned six important lessons about how to manage government debt crises. In its response to the crisis in Greece, however, each of these lessons has been ignored. READ MORE

  4. Depression’s Advocates

    J. Bradford DeLong
  5. The Eurozone’s German Problem

    Philippe Legrain

    The Eurozone’s German Problem

    16

     explains why Germany’s massive current-account surplus is the main threat confronting the eurozone.

    Angela Merkel European People's Party/Flickr

    It cannot be Greece’s fault that the eurozone economy as a whole – in which it plays a miniscule role – is faring worse seven years after the start of the crisis than Europe did during the Great Depression of the 1930s. In fact, the real problem in the eurozone is not Greece’s debt, but Germany’s beggar-thy-neighbor policies. READ MORE

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