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Just as Julius Caesar crossed the Rubicon river, in spite of the warnings of the Roman Senate not to, so has Alex Tsipras, leader of the anti-austerity party, Syriza, decided to try to end austerity in Greece, in spite of Europe’s leaders saying he shouldn’t. Whether Tsipras will succeed is still unclear, but whatever happens, his victory represents a crucial turning point for Europe—a signal that time has run out on austerity policies.
Scottish independence could lead to economic disaster. But debates over national independence are seldom rational. Younger Scots aren't thinking about costs and uncertainties so much as the idea that a different future is possible.
Most economists agree that the global economy is stagnating and that governments need to stimulate growth, but lowering interest rates still further could spur a damaging cycle of booms and busts. Instead, central banks should hand consumers cash directly.
Wealthy Russian expats seem to wield substantial influence over the British government's approach to the Ukraine crisis, which points to the outsized role that such super-rich play in British politics. But all that foreign money reveals deep structural weaknesses in the British economy.
Blyth takes on the claim that austerity is the best way to enhance growth and reduce public debt and finds it utterly deficient. Stuckler and Basu approach austerity policies from a medical perspective, producing an extensive array of evidence to show that austerity increases illness and death.
The results of Europe’s experiment with austerity are in and they’re clear: it doesn’t work. Here’s how such a flawed idea became the West’s default response to financial crises.
Two years, three sovereign bailouts, more than a trillion euros in cheap ECB loans, and dozens of summits later, the latest developments in Germany suggest that Berlin is moving to solve the continent's crisis. But the country’s idea of a solution remains a system in which Berlin gets de facto and de jure veto power over national budgets in return for eurobonds. That misses the point: the crisis is not fiscal, but financial. It began, and it will end, with the banks.
As the eurozone's biggest economy, it was Germany's job to stabilize the system when the first signs of financial trouble appeared. Instead, it did precisely the opposite. Whether the euro survives depends on Frankfurt finally assuming its role as leader.
The EU agreement to refinance Greece's debt may have calmed the markets, but ongoing austerity measures across Europe are leave open potentially worrying side effect that policymakers have yet to address: the chance for China to buy sensitive assets at fire-sale prices.
The upheavals in the Middle East have much in common with the recent global financial crisis: both were plausible worst-case scenarios whose probability was dramatically underestimated. When policymakers try to suppress economic or political volatility, they only increase the risk of blowups.
This article appears in the Foreign Affairs/CFR eBook, The New Arab Revolt.
The recent G-20 meeting in Toronto ended with the world's largest economies promising to cut deficit spending. But such a course is unwise and unlikely to lead to growth -- it is time for finance ministers to take on the speculators who are calling for retrenchment.
The British election on May 6 is not just business as usual. It will reconfigure British domestic politics and foreign policy.