Consultant for Business Intelligence solutions and European Union affairs. Dedicated to promote more transparency in Brussels, better access to public documents and open digital data. Founder of the RootCamp project in 2012.
"The US remains a unique source of innovation." - I don't like this talking down on the United States. We find too many "remains" in the US foreign policy comments recently, and even the pivot to Asia may be a pivot to diplomatic swamp lands at the expense of the Transatlantic community. For the United States regional governance and constitutional reforms may be overdue but even the current system seems capable to adapt to change and present solutions for the current challenges.
Thanks to Helen Mees getting things right. When Mr. Krugman visited Kroes they were both on the same line, Kroes imagined up large scale pan-European infrastructure spending (Telco, Grid etc.) to overcome crisis. the plans didn't materialise.
Krugman's musing about national "austerity" seems misguided in the sense that this is all about fiscal prudence and restoring of agreed community principles. The alternative to discipline is a meltdown, not growth. Getting national governance right and restopring trust is a precondition for large scale European spending. No one is willing to bankroll irresponsible national governments, and their cry and hue about "austerity" and foreign financed "growth" fantasies exactly show why they need to get real. If Kruegman panders to the populism and creditor blame games, fine, that only undermines our respect for this person.
However, Krugman may be right that a "German" excessive spending (for instance on infrastructure) may be appropriate to rebalance the competitiveness gaps within the monetary zone.
I find Mr. Soros misguided here. It is not about austerity, it is about fiscal prudence. The growth talk demonstrates a lack of seriousness. I doubt that it is appropriate to talk down on the eurozone in the case of Cyprus, considering the borderline oriental negotiation tactics of their government. In Germany we tend to get the picture that talks about dominance are to overcome cognitive dissonance while undermining agreed terms. We could accept bad conditions but not undermined fundamental monetary principles. It's all about neat governance.
"And none of the reasons being given for Cyprus to go under are persuasive either. The cost of a cleanup from Cyprus would be a multiple of the cost of buying the entire country."
It makes sense to respect the right of a nations' democratic leadership to chose its financial collapse. I don't think that a self-inflicted Cyprus collapse would have any other than a disciplinatory effect on other member states and strengthen the negotiating powers of the eurozone. Keep in mind that several other nations like Russia, US, UK, China are free to become a white angel.
While the question may arise if an intervention without (prolonged) occupation (cmp. Libya) would have been cheaper and easier we find less and less old school dictators for new regime change experimentation. Now that we all became fearless of weapons of mass destruction the leadership of North Korea has to try harder to get our attention. Yet, it could become the first military confrontation to be settled with milk and zwieback.