ECONOMIC PERSPECTIVES

European Economies

Can entrepreneurship be encouraged in Europe if the continent’s social welfare policies remain unchanged? Is the European Central Bank too focused on inflation? Is Italy the new "sick man of Europe"?

These types of questions are the focus of Project Syndicate's monthly commentaries on European economics, edited by one of the continent's leading economists, Niels Thygesen of the University of Copenhagen.

RECENT COMMENTARIES

FEATURED COMMENTARIES

Behind the ECB’s Wall of Money

Benedicta Marzinotto Series: European Economies

2012-01-16

The "wall of money" that the ECB unleashed to markets just before Christmas will have a huge influence on Europe's economy, and an even larger impact on its politics. This approach to ending the eurozone's sovereign-debt might work, but it could also destroy the single market.... read

Comments: 1 Recommended: 0 Read: 15081

Greening the European Investment Bank

Manana Kochladze Series: European Economies

2011-12-23

The European Investment Bank can help countries worldwide to make vital progress on reducing greenhouse-gas emissions at a time when political solutions based on international agreement remain elusive. Unfortunately, the EIB’s lending priorities and energy-investment portfolio are making the problem worse.... read

Comments: 3 Recommended: 0 Read: 10698

The ECB Fear Factor

Philippe Legrain Series: European Economies

2011-12-13

Exceptional times demand exceptional measures, and the ECB will inevitably feel obliged to act if the eurozone is pushed to the brink. But the longer it delays, the greater the hit to people's jobs and savings, the deeper the damage to investors' confidence in the eurozone financial system, and the bigger the risk of a catastrophic mishap.... read

Comments: 1 Recommended: 1 Read: 20973

The Italian Exodus

Adriano Farano Series: European Economies

2011-11-23

Roughly 90,000 people leave Italy every year – almost a million in the last decade, from a country of 60 million. Silvio Berlusconi's departure won't stem the tide, for it is rooted in the ambiguous legacy of Italian unification in the nineteenth century.... read

Comments: 7 Recommended: 0 Read: 9060

Cross-Border Banking in the Balance

Erik Berglof Series: European Economies

2011-11-14

Eurozone leaders must aim to preserve not just the single currency, but also the gains from financial integration in Europe. No region has benefited more from cross-border banking, yet these achievements are now at risk – and with them the European banks themselves.... read

Comments: 3 Recommended: 0 Read: 15202

A Path through Europe’s Minefield

George Soros Series: European Economies

2011-10-12

Eurozone leaders' next move will have fateful consequences, either calming the markets or driving them to new extremes. All agree that Greece needs an orderly restructuring, but, when it comes to the banks, the eurozone’s leaders are contemplating some inappropriate steps.... read

Comments: 6 Recommended: 1 Read: 21041

Getting to Yes (Again) with Germany

Marc Flandreau Series: European Economies

2011-09-19

Europe’s slow-motion sovereign-debt crisis may appear unique, but it is not. Just a few decades ago, Europe had the Exchange Rate Mechanism, which collapsed during a crisis very much akin to the one afflicting the eurozone today.... read

Comments: 4 Recommended: 0 Read: 14939

The ECB’s Moment of Decision

Gene Frieda Series: European Economies

2011-09-16

It is not too late to resolve the current eurozone crisis, but an effective response must be immediate, overwhelming, and free of the ideological rivalries that have enfeebled the common currency since its launch. The European Central Bank is the only institution that can generate such a response.... read

Comments: 1 Recommended: 0 Read: 9088

Eurobonds or Bust

Simon Tilford Series: European Economies

2011-08-08

The eurozone’s institutional weaknesses have been laid bare. The attempt to run a common monetary policy without a common treasury has failed. Investors do not know what they are buying when they purchase an Italian bond – is it backstopped by Germany or not? We now know that the best credit must stand behind the rest, or else bear runs are inevitable. Debt mutualization alone will not save the euro, but, without it, the eurozone is unlikely to survive intact.... read

Comments: 1 Recommended: 1 Read: 13690

Europe for Sale	Francois Godement
In Bulgaria last March, one of Chinese Premier Wen Jiabao's ministers quipped that “there will always be someone pointing fingers at us whether or not we buy.” But, as Wen’s recent trip to the UK, Germany, and Hungary showed, China is indeed buying – and EU leaders are eagerly selling.... read

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The Case for a Global Financial-Transaction Tax

Peer Steinbrück Series: European Economies

2009-09-21

Despite all economic pain caused by their recklessness, financial-market participants gained significant benefits from government bailouts. It is time for them to pay their fair share of the costs, and the most just and efficient way to ensure this is for the G-20 to implement a global financial-transaction tax.... read

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Beggar-Thy-Neighbor Exchange Rates?

Charles Wyplosz Series: European Economies

2009-04-09

The Swiss National Bank's recent announcement that it was intervening on the foreign-exchange market with the aim of reversing the appreciation of the franc has been met not by protest at the prospect of competitive depreciations, but by silence. Does this indicate that all other central banks entertain the possibility of using that option?... read

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The ECB’s Path Not Taken

Olivier Blanchard and Francesco Giavazzi Series: European Economies

2005-12-01

It is now clear that the European Central Bank views higher interest rates as the right response to rising oil prices. As a result, the ECB risks painting itself into a corner, for the logic behind this week’s interest-rate hike implies that more increases will follow – a series of policy mistakes that will cost the Eurozone economies heavily.... read

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Europe, An Engine of Peace

Wim Duisenberg Series: European Economies

2005-08-01

Critics of European monetary integration often point out that, in the absence of political union, monetary union is doomed to fail. I agree with the critics’ conclusion, but not with their premise, for the success of the single currency so far has been due precisely to the political commitments of the Union’s member countries.... read

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The Scoundrels of Economic Patriotism

Harold James Series: European Economies

2006-03-20

Samuel Johnson called patriotism “the last refuge of a scoundrel.” If that is true, what should we think of today’s mounting economic nationalism, sometimes euphemistically described as “economic patriotism”?... read

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France’s Ghetto Economy

Guido Tabellini Series: European Economies

2005-11-17

The youngsters who are ravaging France realize that they don’t have a future. That is why they are burning cars. But how many French politicians realize that their beloved “social model” is partly to blame?... read

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The EU’s Small Leaders

Harold James Series: European Economies

2005-07-29

The defeat of the EU’s Constitutional Treaty in referendums in France and the Netherlands has, it seems, given rise to a new consensus that further enlargement of the Union should be slowed down, or even stopped. Advocates of this position see EU voters as terrified by the consequences of the May 2004 enlargement of the EU, when eight formerly communist states joined, and angry that they were not consulted about it. ... read

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The Next Gas Crisis Awaits

Yuliya Tymoshenko Series: European Economies

2006-01-06

Europe’s sigh of relief at the supposed end of the dispute between Russia and Ukraine over gas pricing was audible here in Kyiv. But the settlement raises more questions than it answers. By placing Ukraine’s energy needs in the hands of a shadowy company linked to international criminals, the agreement has planted the seeds of new and perhaps more dangerous crises.... read

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An Agenda for Growth in Europe

Niels Thygesen Series: European Economies

2006-02-23

A recent OECD study reminds us, once again, that per capita income levels are roughly 30% lower in the euro area, as well as in the three largest Continental countries – France, Germany, and Italy – that dominate its performance, than in the United States. That gap is likely to widen as Europe’s demographic profile darkens, and if productivity continues to grow more slowly than elsewhere in the industrial economies.... read

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Europe Re-Divided?	George Soros
With the entire burden of adjustment being shifted to the eurozone's debtor countries, the next step in European integration must be clearly acknowledged alongside implementation of the EU’s crisis-resolution mechanism. Otherwise, deficit countries will have no reason to hope that they can escape their predicament.... read
Edmund Phelps’s Journey	Jean-Paul Fitoussi
The winner of this year’s Nobel prize for economics, Edmund Phelps, is a giant in the field. His contributions have been, and remain, so important as that they have altered traditional ways of thinking. According to the social science citations index, he ranks well among the most important economists since Adam Smith. Economists working on the macro economy, its micro foundations, exogenous and endogenous growth theory, the formation of expectations and problems of information and discrimination all refer back to Phelps. ... read

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