Tag Archives: Eurozone

The New York Times Editorial Board’s Incoherence on Italian Austerity and the Euro

Posted on June 4, 2018 by William Black | 1 comment

William K. Black
June 2, 2018 Bloomington, MN

(Third in a series of articles on Italy, Austerity, and the euro)

The New York Times’ editorial board published a May 29, 2018 editorial about Italy’s ongoing political and financial issues that praised austerity in Italy. The board cheered the anti-democratic appointment of “Carlo Cottarelli, a solidly pro-Europe and pro-austerity economist and former official of the International Monetary Fund, to form a nonelected government.” In particular, the board expressed its horror that Italy (which continues to have unemployment levels one expects to find in a severe recession) would have adopted “grandiose spending plans” (fiscal stimulus) if the Italian establishment had not sought to block the results of the recent Italian election.

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Posted in William K. Black

Tagged Austerity Doctrine, eu, Eurozone, Italy

Is the euro a foreign currency for peripheral Eurozone (EZ) countries? – Part 2

Posted on August 14, 2016 by Devin Smith | Comments Off

By Ignacio Ramirez Cisneros

Some considerations on the IMF’s Independent Evaluation Office (IEO) latest assessment on the handling of the euro crisis.

Part II

If decisive large scale interventions on the part of the Eurosystem would have been enough to quell financial panic –along with the strategic functioning of the EZ large transactions payment platform, Target2, allowing capital repatriation by core EZ financial agents- the IMF should not have had a role in the crisis resolution process to begin with. The IMF is brought in when a country is in need of foreign reserves to bridge temporary difficulties in the balance of payments or when debt restructuring is imperative. The first case does not apply to any of the main three EZ countries that turned to the IMF for assistance, since the large majority of capital outflows were to EZ partners, and in any case almost all liabilities were euro denominated. Continue reading →

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Posted in Guest Blogger

Tagged euro, Eurozone

CHINA’S STOCK MARKET TUMBLE AND THE OUTLOOK FOR THE GLOBAL ECONOMY

Posted on August 26, 2015 by L. Randall Wray | 10 comments

Interview of L. Randall Wray by Dasha Chernyshova, Moscow reporter for the Sputnik News Agency

Q: In simple terms, how is the slowdown in China affecting the Eurozone?

A: I think the impact is overstated. China is still growing relatively rapidly. Her consumers enjoy rising incomes. They want high quality foreign manufactured goods—prestige goods, luxury goods. Over the short run, the Eurozone will still enjoy positive growth of Chinese demand. The bigger impact could be on commodities exporters (Russia, Brazil). China is learning how to economize on use of natural resources in her attempt to move toward sustainable growth.

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Posted in L. Randall Wray

Tagged China, Eurozone

Austerity, Greece’s Debt Crisis, and the Death of Democracy: A Book about Greece and Much More

Posted on August 19, 2015 by Joe Firestone | 3 comments

The Eurozone is an instrument of the globalization process that is setting financial elites over all nations of the world, including the democracies. The situation in Greece exposes the true nature of the Eurozone institutions as a naked fact, beyond spinning, for all to see. They are popular sovereignty-thieves and democracy-killers, with the power necessary to shut democratic governments down.

The architectural flaw in the Maastricht Treaty: that the nations of Europe were giving up their monetary sovereignty, was immediately recognized as fatal by acute economists, and many predicted failure. But, what was not seen clearly were the political implications of giving the ECB, the ability to deny liquidity to the banking systems of nations, and, in so doing to perform, essentially, coups rendering elected governments of democratic nation states powerless to enact policies they were elected to pass. This “theft of democracy” contradicts the EU’s commitment to advance democracy. It steals what was so hard won from the peoples of Europe. Continue reading →

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Posted in Joe Firestone

Tagged austerity, EC, ECB, Eurozone, Greek Debt Crisis, IMF, theft of popular sovereignty, troika, tyranny

Three UMKC Professors Among The Nine Who Predicted Eurozone Crisis

Posted on August 5, 2015 by Devin Smith | Comments Off

KCUR.org feature includes recorded interview with Randy Wray and others regarding the current crisis in the eurozone. Randy explains that some economists predicted the problems with the European Monetary Union with an explanation of sectoral balances.

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Posted in L. Randall Wray

Tagged ECB, Eurozone, greece, MMT, Modern Monetary Theory

The BBC’s Inept but Revealing Attempt at a Game Theoretic View of Greek Crisis

Posted on June 26, 2015 by William Black | 6 comments

By William K. Black
Quito: June 25, 2015

The BBC came up with a good “hook” for a story on the troika’s assault on the Greek economy and people. “Yanis Varoufakis, the Greek finance minister, spent his academic career … studying game theory.” Professor Marcus Miller, a UK economist (U. Warwick) wrote an article for the BBC premised on how Varoufakis would apply game theory to Greece’s negotiations with the troika (the IMF, ECB, and the European Commission). Miller is a colleague of the great Robert Skidelsky and has co-authored with him an article explaining the economic illiteracy and self-destructive nature of the troika’s (and UK’s) infliction of austerity in response to the Great Recession.

The BBC, however, is such a great fan of austerity that one rarely reads why the vast majority of economists think that using austerity to respond to a Great Recession is akin to the quackery of bleeding a patient to make him healthier. Miller’s article in the BBC about game theory has the wrong title (recall that the author often does not get to choose the title), the wrong game, the wrong concept, and the wrong payoffs. The title of the article is: “Can game theory explain the Greek debt crisis?” The article does address that issue. It is limited to the issue of the new Greek government’s negotiations with the troika concerning a crisis that they inherited.

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Posted in William K. Black

Tagged ECB, Eurozone, greece, IMF, troika

Greece wants to save Europe, but can it persuade Europeans?

Posted on February 18, 2015 by Pavlina Tcherneva | 4 comments

By Pavlina Tcherneva
Cross posted from aljazeera.com

Most analysis of the Greek debt crisis ignores an important reality: While Greece may be the villain du jour, every eurozone nation is profoundly short of cash. That’s because of a well-acknowledged, but not fully appreciated, flaw at the heart of eurozone financial architecture that converted a historically unprecedented number of nations from issuers of their own currency to users of a common currency.

Greece is simply the first country to experience the extreme consequences of that loss of monetary sovereignty. With no independent source of funding, no currency of its own, no central bank to guarantee its government liabilities, it has had to ask others for help. And as a condition for securing that help, Greece has until now been forced to consent to radical austerity policies.

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4 Comments

Posted in Pavlina R. Tcherneva

Tagged eu, Eurozone, greece, troika

Get a TAN, Yanis: A Timely Alternative Financing Instrument for Greece

Posted on February 16, 2015 by Devin Smith | 44 comments

By Rob Parenteau

The recent election of an explicitly anti-austerity party in Greece has upset the prevailing policy consensus in the eurozone, and raised a number of issues that have remained ignored or suppressed in policy circles. Expansionary fiscal consolidations have proven largely elusive. The difficulty of achieving GDP growth while reaching primary fiscal surplus targets is very evident in Greece. Avoiding rapidly escalating government debt to GDP ratios has consequently proven very challenging. Even if the arithmetic of avoiding a debt trap can be made to work, the rise of opposition parties in the eurozone suggests there are indeed political limits to fiscal consolidation. The Ponzi like nature of requesting new loans in order to service prior debt obligations, especially while nominal incomes are falling, is a third issue that Syriza has raised, and it is one that informed their opening position of rejecting any extension of the current bailout program.

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Posted in rob parenteau

Tagged austerity, Eurozone, greece, troika

The NYT Gives S&M Advice to the Greeks: Stand by Your Sadist

Posted on January 24, 2015 by William Black | 8 comments

By William K. Black
Bloomington, MN: January 24, 2015

The New York Times’ coverage of the eurozone crisis remains execrable. Sometimes, however, it is so bad that it achieves brilliant, albeit unintentional self-parody.” The latest example is a column that, for the NYT, is in the top 5% of its efforts on Europe. Even at its best (least worst) the paper cannot help itself.

The January 23, 2015 column is entitled “After an Anxiety-Filled Campaign, Greek Voters Consider a Turn to the Left.” It does admit that Greece’s economic condition is horrific.

“After five years in which the country’s economy has shrunk by 25 percent and the number of jobless has risen far beyond what its creditors ever predicted….”

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Posted in William K. Black

Tagged Eurozone, greece, nyt, Syriza

EU Deflation Arrives and the Troika Continues to Fiddle While the EU Burns

Posted on January 8, 2015 by William Black | 1 comment

By William K. Black
Bloomington, MN: January 7, 2015

The troika (the EU Commission, the ECB, and the IMF) are flirting with throwing the entire eurozone back into a third Great Recession and much of the periphery into the continuation of the Troika Depression. For nations like Greece, the current Great Depression is now more severe and longer lasting than the Great Depression of the 1930s. The New York Times and the Wall Street Journal’s journalistic malpractice in covering the troika’s gratuitous infliction of misery upon the people of Europe has been the perfect side dish to complement the troika’s toxic economic malpractice.

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