Closing the Gap: Can Europe’s Economy Finally Catch Up with the U.S.?
Issue Brief 53 The year 2016 has been characterized by growing uncertainty about the strength of the global economy: uncertainty about the ability of emerging markets—and especially China—to successfully address …
Stepping Over the Line: Schäuble Criticizes ECB
German finance minister Wolfgang Schäuble was forced by Jens Weidmann, president of the powerful Bundesbank, to publicly state that he fully respects the independence of the European Central Bank (ECB) …
The Perfect Storm
The ongoing refugee crisis has exposed new cracks in the European Union. While some European leaders, including those in the German government, had been reluctant to define the debt crisis …
Pleasing and Appeasing Markets: A Fatal Attraction
Following the recent and ongoing turmoil in financial markets, largely triggered by the growing uncertainty about the health of the Chinese economy, financial investors have started to expect and demand …
The New Greek Bailout and the Never-Ending Political Fallout in Germany
Greece and its international creditors moved closer to securing a third bailout on Tuesday, paving the way for national parliaments to vote on the agreement before a crucial repayment to …
Saving the Euro: On the Edge between Dream and Disaster
The tough negotiations that led to a deal to negotiate another deal between Greece and its creditors can certainly not be described as the finest hour in the history of …
Breakdown or Breakthrough?
The past few days have certainly been rich with dramatic twists and turns in the Greek drama. Nobody knows with certainty how the story will end—not the Greek politicians, the …
“The Great Divergence”: Elements for an Early Assessment
At the beginning of 2015, as many investors grew increasingly skeptical about the prospects of the euro area’s economy and its central bank’s capacity to fight what appeared to be …
Restructuring Greece’s Sovereign Debt: It’s Not the Answer, Yet
Greece barely managed to repay a loan installment to the International Monetary Fund (IMF) this week, only being able to do so by tapping its own buffer reserves at the …
Greece and Sisyphus: When Myths Risk Becoming Reality
Officially, Greece was not even on the agenda at the Spring meetings of the IMF and World Bank Group last week. But the country’s obstinate flirtation with disaster was very …
U.S. Loses in Attempt to Isolate New Chinese Development Bank
The recent spat between the U.S. administration and the British government over the UK’s decision to join the Chinese-led Asian Infrastructure Investment Bank (AIIB)–despite U.S. opposition–has triggered much public noise. Initial …
Grexit: The Wrong Way Out of the Crisis
Now that the latest installment of the Greek drama is over, it is useful to draw some lessons from the experience. It has become clear that the tail risk of …