Entries Tagged as 'Greek Default'

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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Greek Referendum Tempts Economic Disaster

November 3rd, 2011 at 2:33 pm 32 Comments

It’s understandable why Greek Prime Minister George Papandreou wants to hold a referendum before implementing draconian financial restraints that will cause riots, drugstore clashes with police, thumb car burnings, acts of vandalism, and anarchy.

He knows what has to be done, but undoubtedly supposes that if a majority of Greeks support austerity measures, that will neutralize hostility on the streets whenever the government takes unpopular but necessary action.

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China’s Pound of Euro-Flesh

October 31st, 2011 at 3:26 pm 7 Comments

As the euro bailout proceeds, rx there are almost daily references to some foreign country that is being lobbied to “contribute” to an aspect of the fund. China and Japan are the most commonly mentioned potential suitors for guaranteeing or buying new eurobonds. The details are sketchy as to the extent of both’s participation, and likely undetermined for now.

Japan may be interested only to show some countervailing flushness to China’s largesse, but there may be a unique opportunity here for China as well.

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Don’t Praise the Greek Debt Deal

October 27th, 2011 at 4:18 pm 38 Comments

Whether today’s announcement that holders of Greek sovereign debt have agreed in principle to a 50% haircut on the face value of the instruments raises some critical questions.

On the surface, seek with the notion of first-loss guarantees of new debt taking shape, troche this addresses the problem of existing debt for the first time, but first is the question of whether such a deal will actually happen.

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Greece: The End of the Beginning

David Frum October 27th, 2011 at 12:40 am 17 Comments

A deal on the Greek debt may or may not be helpful, but it certainly is clarifying. Now we can begin to understand: the Euro crisis is not about Greece, and it’s not even really about European government overspending.

It’s about the negative consequences of building a monetary union without a political union – and about Europe making the awful decision whether to move forward towards the latter or giving up its hopes for the former.

Alan Greenspan: Wrong on the Euro

October 26th, 2011 at 1:59 pm 33 Comments

Former Fed Chairman Alan Greenspan has been reenforcing the conventional wisdom that the current eurozone debt crisis can be traced to a north-south cultural divide between member states. This is the wrong assessment and blaming culture misses the essence of the problem. The reality is that the structure of the euro was unable to enforce fiscal discipline.

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Save the Euro? Could be Illegal

October 25th, 2011 at 5:34 pm 8 Comments

At some point in this crisis, medical the eurozone is going to have to decide whether it wants to have a solvent euro for the moment in part of the Union, malady or a lawful and democratic Union in all of it.

The EU is groping for ways to bail out a list of states that includes Greece, treatment Italy, Portugal, Spain, or Ireland – or potentially all of them. The trouble is that since 1998, such action is expressly prohibited by the Maastricht Treaty.

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Greece Defies Reform

September 20th, 2011 at 2:57 pm 35 Comments

Back in May of 2010 it became clear that Greece could no longer finance her debt and her budget deficit through the markets. Since then the nations of the European Union (and the IMF) have covered the borrowing needs of Greece with new loans.

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Let’s Call it Hurricane Euro

David Frum September 1st, 2011 at 12:09 am 20 Comments

In my Marketplace column, I ask why no one is preparing for the coming collapse of the Euro:

But why is it only weather stories that command such breathless attention?

Meanwhile, the world’s largest currency union — the euro — continues to careen toward disaster. The euro’s travails weigh heavily on the United States’ economy too. Yet just try getting anybody interested in that outside specialized financial media.

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Be Euro-Scared, Very Euro-Scared

David Frum August 11th, 2011 at 8:28 pm 31 Comments

I have spent the past two days at the annual retreat for Canada’s finance minister, Jim Flaherty, at Gatineau near Ottawa. Participants included prominent Canadian business and financial leaders, economists and academics, experts from the nonprofit sector, and officials from the Ministry of Finance.

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