If the eurozone splinters, it will have been an avoidable disaster. After all, the European Central Bank has already gone to great lengths to shore up the continent’s financial system. Now, the choice lies with Germany, which can save the monetary union if it allows for policies aimed at debt relief and growth, not just slashing deficits.
China seems to want the yuan to dethrone the dollar as the global reserve currency. But don’t expect China’s currency to take over anytime soon. The yuan will rise, but far slower than predicted, and Beijing’s puzzling efforts to help it along reveal flaws in the government’s divided and incremental approach.
As the race to replace Dominique Strauss-Kahn at the IMF heats up, emerging markets finally have a shot at the head table. Here's why they might fail to seize it -- and what it will mean.
Mallaby's update to his January/February 2007 essay ''Hands Off Hedge Funds.''
The massive growth of hedge funds has sparked warnings of instability and demands that the industry be regulated. But the fear of hedge funds is overblown, based on a misunderstanding of their role in the international financial system. In reality, hedge funds do not increase risk; they manage it -- and policymakers, rather than clamping down, should make sure hedge funds have the tools to perform this function well.
The next World Bank president will confront a nearly impossible challenge: saving the institution from a curious alliance of conservatives and radical activists that threatens to undercut its financial viability and effectiveness. Failure to head off the danger will mean the gradual decline of the best tool the world has for managing globalization, just when that tool is more needed than ever.
Mallaby's postscript to his March/April 2002 essay "The Reluctant Imperialist."
Failed states are increasingly trapped in a cycle of poverty and violence. The solution is for the United States and its allies to learn to love imperialism -- again.
This article appears in the Foreign Affairs eBook, "The U.S. vs. al Qaeda: A History of the War on Terror." Now available for purchase.
A divided, decentralized government and a hostile media -- especially cable TV and the Internet -- have hamstrung the presidency, just when the world needs U.S. leadership.