Europhiles’ zeal for more EU unification and harmonization does not necessarily lead to effective – or even reasonable – solutions to the Union’s troubles. That is important to bear in mind as EU President Herman Van Rompuy’s taskforce on economic governance prepares to unveil its proposed financial reforms.
PRAGUE – One pillar of the European Union’s single market is harmonization. At first sight, that makes a lot of sense. Harmonized systems of rules make it easier for capital and labor to move around in search of their best use.
Alas, some Europhiles’ unifying zeal has all too often spilled beyond the bounds of economic reason, even common sense. More unification and harmonization does not necessarily lead to effective – or even reasonable – solutions to the EU’s troubles.
The main point of the new European regulatory measures under consideration (apart from the so-called new Basel III rules) is to bring more stability to the financial system. The indirect effect will be to reduce the financial sector’s size – in absolute terms and relative to the economy – and to hinder its growth in the future.
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With elevated global inflation likely to persist for some time, the prospect of competitive exchange-rate appreciations is looming larger. Instead of a race to the bottom in the currency market, there may be a scramble to the top – and poorer countries will likely suffer the most.
warns that a series of competitive exchange-rate appreciations would hurt poorer economies the most.
Neither the invasion of Ukraine nor the deepening cold war between the West and China came out of the blue. The world has been increasingly engaged over the past half-decade, or longer, in a struggle between two diametrically opposed systems of governance: open society and closed society.
frames the war in Ukraine as the latest battle for open-society ideals – one that implicates China as well.
Shlomo Ben-Ami
highlights the lessons countries like China and Iran are drawing from Vladimir Putin’s aggression, offers advice to Ukrainian peace negotiators, and considers the wisdom of Finland and Sweden's NATO membership.
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PRAGUE – One pillar of the European Union’s single market is harmonization. At first sight, that makes a lot of sense. Harmonized systems of rules make it easier for capital and labor to move around in search of their best use.
Alas, some Europhiles’ unifying zeal has all too often spilled beyond the bounds of economic reason, even common sense. More unification and harmonization does not necessarily lead to effective – or even reasonable – solutions to the EU’s troubles.
The main point of the new European regulatory measures under consideration (apart from the so-called new Basel III rules) is to bring more stability to the financial system. The indirect effect will be to reduce the financial sector’s size – in absolute terms and relative to the economy – and to hinder its growth in the future.
To continue reading, register now.
As a registered user, you can enjoy more PS content every month – for free.
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