Entries Tagged as 'european debt'

Let Europeans Vote for EU Officials

David Frum November 30th, 2011 at 4:06 pm 10 Comments

In my column for The Week I explain why the European Union needs more democratic accountability:

The European Union is not a democracy because until now it has been regarded as an association of democracies. The institutions at the center of Europe existed to serve democratic governments, not to replace those governments.

When the euro currency was proposed back in the 1990s, opponents of the euro warned that different countries cannot safely share one money. Either the euro would crack up under pressure (as, say, the Scandinavian cracked up in 1914 after 40 years of Swedish-Danish cooperation) — or else the EU itself would have to evolve into a single polity.

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The Euro Crisis is an American Crisis Too

David Frum November 14th, 2011 at 12:35 pm 7 Comments

In my column for CNN, I explain how the debt crisis in the European Union can spread to America:

The Euro crisis is not just a Greek crisis, or an Italian crisis, or now even a French crisis.

It is an American crisis, too, a crisis that may thrust the U.S. economy back into recession in 2012.

If the Euro cracks up, many European banks who hold Euro-denominated bonds will discover that their bonds have lost value. The bonds won’t fall to zero (hold on a second for the reason why not), but they will lose enough value to play havoc with the bondholders’ capital. The banks will then either have to seek government help or stop their lending to businesses and consumers or both.

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The Euro? Um, Next Question Please

David Frum November 10th, 2011 at 8:32 am 69 Comments

Last night, the CNBC anchors addressed the most urgent economic question of the moment – the fate of the euro – to four of the Republican presidential candidates: Herman Cain, Mitt Romney, Ron Paul and Jon Huntsman.

I want to begin with what we saw today, another rough day for our money, for our 401(k)s. Once again, we were all impacted by the news that the Dow Jones Industrial Average dropped 400 points today. The reason, Italy is on the brink of financial disaster.

It is the world’s seventh largest economy. As president, what will you do to make sure that their problems do not take down the U.S. Financial system? It is the world’s seventh largest economy.

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Save the Euro, Lose Sovereignty

November 8th, 2011 at 12:44 pm 9 Comments

The race to save the euro, and how it’s being conducted, will not just affect bailed out countries’ control over their budgets. It will also likely harm what remaining democratic character the Union has by allowing for influence over debtor states’ votes in a way the treaties anticipate and forbid.

The euro may be saved, but these safeguards, critical to holding members accountable for their votes, will be forever lost.

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Europe’s Greatest Deficit is its Democracy

November 7th, 2011 at 1:46 pm 46 Comments

Though his actions quickly descended into farce, healing soon-to-be-former Greek Prime Minister Papandreou had the right instinct calling for a referendum on the austerity package that European negotiators are imposing on his country. There has been a long-stranding “democratic deficit” within the European Union, with major decisions being made without the input of the Union’s citizens. The latest crisis is only increasing this deficit.

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It’s Germany’s Mess as Much as Greece’s

David Frum November 2nd, 2011 at 3:50 pm 45 Comments

In my column for The Week I argue that Germany bears a lot of responsibility for creating the current European debt crisis:

The other day, a financial friend repeated a joke. “A Greek, an Italian, a Spaniard, and a German walk into a bar. Who pays? The German of course …”

Bzzzt. Let’s stop the tape right there.

That joke — and many comments like it — reveals a broad misunderstanding in the U.S. about the currency crisis destabilizing Europe. Since that same crisis is ravaging U.S. financial markets, Americans ought to understand better.

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