A toxic mix of mutual distrust and rising nationalism – with Taiwan the immediate flash point – has brought Sino-American relations to their lowest point in decades. While neither China nor the United States appears to want a military conflict, we asked PS commentators whether the two powers might nonetheless stumble into one.
FRANKFURT – Despite abundant talk in Europe nowadays, there is no crisis of the euro. Some countries, instead, are dealing with a sovereign-debt crisis and the consequences of inadequate economic reform. The challenges are characteristic not only for the euro area. Most advanced economies around the globe are facing similar problems.
All countries need to draw firm conclusions from the current crisis. In the euro area, instead of continuing to deny that monetary union limits national fiscal sovereignty, they must come to terms with economic reality and follow stricter budgetary rules.
When the global financial crisis erupted, the euro shielded countries that in comparable circumstances would have been plunged into a deep currency crisis. This shield may, perhaps, have worked too well because the more weakly performing countries faced no discipline from financial markets.
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