The cost of Frau Merkel

There are basically two ways to resolve the Euro conundrum. One is the provision of Eurobonds, jointly provided by all the Eurozone members, to underwrite the debts of those Euro countries that get into big trouble through lack of competitiveness or for any other reason. The problem with this is that the Germans, now in a dominant enough position as the paymasters of the EU to be able to dictate terms (70 years after the war) to the rest of Europe, refuse flatly to consider it, on the reasonable enough grounds that they would be the biggest funders of what they see as the profligate and indisciplined periphery. Continue reading

Tobin Tax: not quite the Fourth Reich

I suppose it is a short step from accusing both Gordon Brown and David Cameron of wanting to ‘Sovietise’ Britain to proclaiming Angela Merkel guilty of stealing pages from the Hitler playbook.

But it is analysis and insight of precisely this calibre, nuance and measured tone that has made rightwing commentator Simon Heffer the intellectual power in the land that he has today become.

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A New Deal for Greece, and for Europe?

Though many in the financial markets now think a Greek default is inevitable, a new proposal which might avoid the mayhem of such a scenario is gaining considerable traction. It involves the conversion of a share of national debt to EU bonds. The decision on such a conversion need not be unanimous, since it could be by a voluntary process of enhanced co-operation as was the case when the euro itself was created. Germany might well want to retain its own bonds, and would be able to do so. Significantly, the European bond issues could be globally traded, and could then attract surpluses from the central banks of the emerging economies and from sovereign wealth funds. That could fund growth and cohesion within the Eurozone without fiscal transfers from Member States. Continue reading