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    The Euro Loses a Big Supporter and Gains a New Neo-Con

    Definition of an American neo-conservative: A liberal mugged by reality. The new poster child for the budding European neo-conservative: Oskar Lafontaine? Lafontaine, German history majors will recall, is the Social Democrat and former German finance minister who helped launch the European Monetary Union (EMU). He is also the latest European-style … More

    Eurozone Crisis Creates Another Challenge for Merkel

    As opposition to the euro continues to build within the eurozone, Germany, the motor of the eurozone—frankly, the only thing holding it all together—is not immune. Recently, a new political organization has formed in Germany called Alternative for Germany. So far the group is only a collection of like-minded euro-skeptic … More

    Cyprus Rejects Draconian EU Bailout Plan

    The parliament of Cyprus today emphatically rejected a European Union (EU) bailout plan that would have taxed private bank deposits. The plan did not garner a single vote in support, while 36 members voted against the plan; 19 parliamentarians abstained and one was absent for the vote. The deeply unpopular … More

    A United States of Europe? Margaret Thatcher Lecture to Assess the Future of National Sovereignty in Europe

    Twenty-five years ago, in her groundbreaking 1988 Bruges speech, Margaret Thatcher spoke against the rise of a supranational federal Europe, warning that to try to suppress nationhood and concentrate power at the center of a European conglomerate would be highly damaging and would jeopardize the objectives we seek to achieve.… … More

    As Spain and Greece Burn, Estonia Offers a Lesson

    Over the past few days, new strikes and riots have convulsed Greece and Spain. Conventional wisdom (including from economist Paul Krugman) suggests that cuts in government spending—often described as “austerity”—are a primary cause of the economic downturn in these nations and across much of Europe. This “demand deficiency” hypothesis leads … More

    Will America Catch the Eurovirus?

    In a new Backgrounder, “How Contagious Is Europe’s Economic Crisis?”, we discuss several channels through which a European crisis could be transmitted to the U.S. economy and note the key policy responses needed in the U.S. and in Europe. Current effects. The U.S. is already affected by lower demand for … More

    Italian Prime Minister Warns of EU Collapse

    In an interview with Germany’s Der Spiegel magazine on Sunday, Italian Prime Minister Mario Monti warned of the “psychological break-up” of Europe if the euro crisis is not soon resolved. To which there is only one thing to say: The European Union has been a schizophrenic construct from the very … More

    Morning Bell: The Grecian Formula for Economic Decline

    The President and his team have been blaming “European headwinds” for some of the U.S. economy’s woes. But the truth is that the policies pursued by Washington and Athens are frighteningly similar—and the outcomes are not good for either country. Both countries are in need of comprehensive fiscal reforms, yet … More

    The Greek Myth

    How did Greece get into its fiscal situation? It’s best explained in a parable. Helen is an elegant, if somewhat faded, woman of a certain age. She has impeccable taste and indulges herself freely. She supports her debonair lifestyle with a cushy government job where she is paid for 14 … More

    Is Austerity Crushing Europe?

    Numerous governments across Europe have embarked on strict austerity programs. Europe is also sliding into a deep recession, with some countries already essentially in deep depression. Are the two phenomena related? Is the austerity exacerbating the economic downturn? Yes and no, and the yes should be no surprise. For context, … More