Barry Eichengreen’s VoxEU column arguing that the euro was irreversible has been viewed over 230,000 times. Now it appears to be wrong. In this column, originally posted on the website ‘The Conversation’, he looks to see where his predictions went wrong. Basically the economic analysis – which focused on bank runs – was right. He went wrong in overestimating the political competence of Greece and its creditors.
Barry Eichengreen, Wednesday, July 1, 2015 - 00:00
Domingo Cavallo, Tuesday, June 30, 2015 - 00:00
Grexit and the reintroduction of the drachma would have severe consequences for the Greek people. This column argues, based on Argentina's experience, that this would produce a sharp devaluation of the drachma, inflation, and a severe reduction in real wages and pensions. The effects would be far worse than the reductions that could have occurred as a consequence of the policies proposed by the Troika. By resuming negotiations, continuing with measures to achieve fiscal consolidation and carrying out adequate structural reforms, Greece could reverse the current situation in a sustainable way. It has the great advantage that the ECB, most European governments and the IMF are willing to resume negotiations.
Charles Wyplosz, Monday, June 29, 2015 - 00:00
This weekend’s dramatic events saw the ECB capping emergency assistance to Greece. This column argues that the ECB’s decision is the last of a long string of ECB mistakes in this crisis. Beyond triggering Greece’s Eurozone exit – thus revoking the euro’s irrevocability – it has shattered Eurozone governance and brought the politicisation of the ECB to new heights. Bound to follow are chaos in Greece and agitation of financial markets – both with unknown consequences.
Thorsten Beck, Sunday, June 28, 2015 - 00:00
The breakdown of negotiations between Greece and the Troika comes as a shock. It is not, however, the end of the game. This column argues that the rupture can serve as a starting point for a new relationship between Greece and its creditors – an approach that does not provide fresh cash to the Greek government and does not impose specific policy reforms from outside.
Richard Baldwin, Sunday, June 21, 2015 - 00:00
Vox columnists have posted a steady stream of research-based policy analysis and commentary on the Greek Crisis. This column provides a list of all the relevant columns posted since the beginning of 2015.
Elias Papaioannou, Richard Portes, Lucrezia Reichlin, Friday, June 19, 2015 - 00:00
Greece seems to be on the verge of an agreement that would release much needed funds. This column argues that an agreement on completion of the second programme will not restore confidence, nor will it resolve the deep economic, financial and political uncertainties that confront Greece today. The focus should swiftly shift to the design of an efficient, realistic and truly reforming new programme.
Carlos Cantú, KeyYong Park, Aaron Tornell, Sunday, April 12, 2015 - 00:00
The wisdom of structural reform during a crisis is a subject of heated debate. This column compares Greece’s experience to that of Mexico during the debt crisis of the 1980s. Mexico did not receive a haircut until seven years into the crisis – after structural reform was already underway. In Mexico that reform was the outcome of an internal conversation – not a diktat from the outside – and it happened during the height of the crisis.
Ana-Maria Fuertes, Elena Kalotychou, Orkun Saka, Thursday, March 26, 2015 - 00:00
David Amiel, Paul-Adrien Hyppolite, Sunday, March 15, 2015 - 00:00
Thorsten Beck, Monday, February 2, 2015 - 00:00
Jean-Pierre Landau, Tuesday, December 2, 2014 - 00:00
Irina Balteanu, Aitor Erce, Wednesday, November 12, 2014 - 00:00
Pierluigi Bologna, Arianna Miglietta, Marianna Caccavaio, Tuesday, October 14, 2014 - 00:00
Ramon Xifré, Friday, September 12, 2014 - 00:00
Edoardo Campanella, Tuesday, August 12, 2014 - 00:00
Separatism is on the rise in Europe. This column argues that, while the Eurozone Crisis is certainly reinforcing regional tensions, the underlying causes are globalisation and the deepening of the European project. Independence campaigners want access to the larger European market, while unfettering their regions from the centralised control of national governments. Renegotiating the terms of the relationship between national and regional governments is preferable to resorting to political threats or the use of force.
Fernando A Broner, Aitor Erce, Alberto Martin, Jaume Ventura, Wednesday, July 23, 2014 - 00:00
Since 2010, Eurozone periphery countries have faced severe debt problems and falling credit to the private sector. This column interprets these events with a theory that has three main ingredients. First governments can favour domestic creditors. Second, public debt trades in secondary markets so debt holdings shift from foreign to domestic residents. Third, due to private financial frictions, this shift crowds out private investment and growth.
Joshua Aizenman, Thursday, July 3, 2014 - 00:00
After a promising first decade, the Eurozone faced a severe crisis. This column looks at the Eurozone’s short history through the lens of an evolutionary approach to forming new institutions. German dominance has allowed the euro to achieve a number of design objectives, and this may continue if Germany does not shirk its responsibilities. Germany’s resilience and dominant size within the EU may explain its ‘muddling through’ approach to the Eurozone crisis. Greater mobility of labour and lower mobility of under-regulated capital may be the costly ‘second best’ adjustment until the arrival of more mature Eurozone institutions.
Marco Buti, Philipp Mohl, Wednesday, June 4, 2014 - 00:00
Investment in the Eurozone is forecast to remain below trend until 2015, with a particularly large shortfall in the periphery. Low investment reduces aggregate demand, thus lowering short-term growth, and it also hampers medium-term growth through its effect on the capital stock. This column highlights three causes of low Eurozone investment – reduced public investment, financial fragmentation, and heightened uncertainty – and proposes a series of remedies.
Susan Schadler, Monday, April 28, 2014 - 00:00
The IMF has had a preferred creditor status throughout the history of its lending. This implies that borrowing countries are expected to give priority to meeting their obligations to the IMF over other creditors. This column reviews the onset of this preferred status, its purpose, and the way it changed after the recent Eurozone crisis. By lending €30 billion to Greece in 2010, the IMF introduced the option to permanently waive the requirement that a borrowing country is on the path to stability. This option increases the chance of moral hazard and undermines the strong framework for the preferred creditor status.
Anne-Laure Delatte, Julien Fouquau, Richard Portes, Thursday, April 17, 2014 - 00:00
In retrospect, it is striking that the sovereign bond spreads of peripheral Eurozone countries surged while the economic conditions were gradually deteriorating. This column provides a new explanation for this phenomenon. It suggests that the markets in credit default swap indices have exacerbated shocks to economic fundamentals. The same change in fundamentals had a higher impact on the spread during the crisis period than it had previously.