The opponents: Anyone looking to pass economic judgment on the euro crisis cannot ignore the heads of the two leading German think tanks. Sinn, 65, has led the Ifo Institute for Economic Research in Munich for almost 15 years. He appeared in front of Germany's Federal Constitutional Court to support the complaint against the European Stability Mechanism permanent bailout fund. Fellow economist Fratzscher, 42, worked at the ECB until 2012. He has been the president of the DIW economic research institute since the beginning of the year; a few weeks ago, he was part of an appeal for closer political union in Europe.
More than 10,000 people demonstrated in Bangkok against a controversial amnesty bill passed by the lower house of parliament. The bill, which has also to pass the senate, would pardon almost anyone facing charges arising from Thailand’s political turmoil between 2004 and 2010. Critics say its aim is to grant amnesty to Thaksin Shinawatra, who was overthrown as prime minister in 2006 and lives in exile. He is the brother of Thailand’s present prime minister, Yingluck Shinawatra.
MUNICH – Last June, the European Commission announced its about-face on bank restructuring. The money for recapitalizing distressed banks would now come primarily from creditors, not European taxpayers, with a pecking order to specify which lenders would be repaid first. All of this is welcome, at least in principle. In practice, however, the scheme leaves much to be desired.
ILULIALIK FIORD, Greenland—Geologists have long known that deep beneath the forbidding ice of this Arctic island lay buried treasure.
Recognizing that the recent debt restructuring was insufficient to restore Greece's creditworthiness, the IMF will likely toughen conditions for lending to countries with unsustainable debt levels.
In December 2012 we published a blog post reporting that German wage growth rates (year-over-year comparison) for 2012 had been higher than the Eurozone average, with at that time, 2.5 percent versus 1.7 percent. In the meantime the annual rates for nominal wage and salary growth have been published showing that the difference has increased; German wage growth of 3 % compared to a 1.8 percent increase of the euro area. France and Italy had wage and salary growth rates of 2.1 percent and 1.1 percent respectively.
The short answer is: somewhat positive.
The longer, but still broad-brush, answer starts from noting that two important documents have been issued in the last few days: the In-depth reviews following the so called AMR (Alert Mechanism Report) from the European Commission and the World Economic Outlook from the IMF. It is useful to look at these two documents from a specific perspective, namely to find elements to answer the question whether the balance between good and bad news about the euro area is positive or negative. Equivalently, one can use the information and the assessments they provide to conclude how the healing process from the euro area crisis is progressing. An assessment in the same vein, concentrating on the growth problem in the euro-area, is offered by the recent Bruegel Policy Brief by Zsolt Darvas, Jean Pisani-Ferry and Guntram B. Wolff.
Let´s follow the scorpion approach - in cauda venenum - and begin with the good news.
What to do about Cyprus?
Newly elected President Nicos Anastasiades wasted no time setting out his stall for negotiations on a possible €17 billion ($22.14 billion) bailout required before the country runs out of money in June: "I want to be absolutely clear. Absolutely no reference to a haircut on public debt or deposits will be tolerated. Such an issue isn't even up for discussion," he told Parliament on his first day in office.
WASHINGTON, DC – As the world enters yet another year in the shadow of continued financial and economic crisis, a broader view of the contours of the future global economy is required.
The longer-term trends are clear. Dynamic emerging markets from Asia to Latin America are rising in prominence. The United States and Japan remain important drivers of the global economy but face major debt and deficit challenges. Europe is going through a difficult but historic process of re-engineering and integration. The Middle East is transforming before our eyes. Sub-Saharan Africa is breaking through to sustained development – creating a new frontier of growth after decades of stagnation.
These changes are shaping our future in a positive way. Yet there are still considerable roadblocks to overcome. The global economic recovery remains too weak. With more than 200 million unemployed around the world, prospects for job creation are still too dim. And the gap between rich and poor, exacerbated by the crisis, is still too wide.
There is a tough road ahead if we are to turn optimism into reality. I see three key milestones.
In an interview with SPIEGEL, President of the European Central Bank Mario Draghi defends his euro crisis policies and promises to keep prices stable. He also says he's on Germany's side when it comes to encouraging reforms in the euro zone.
BERKELEY – The first two components of the euro crisis – a banking crisis that resulted from excessive leverage in both the public and private sectors, followed by a sharp fall in confidence in eurozone governments – have been addressed successfully, or at least partly so. But that leaves the third, longest-term, and most dangerous factor underlying the crisis: the structural imbalance between the eurozone’s north and south.
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