The Great Debate UK

from MacroScope:

Political economy and the euro

February 8, 2010

The reality of  'political economy'  is something that irritates many economists -- the "purists", if you like. The political element is impossible to model;  it often flies in the face of  textbook economics;  and democratic decision-making and backroom horse trading can be notoriously difficult to predict and painfully slow.  And political economy is all pervasive in 2010 -- Barack Obama's proposals to rein in the banks is rooted in public outrage; reading China's monetary and currency policies is like Kremlinology; capital curbs being introduced in Brazil and elsewhere aim to prevent market overshoot; and British budgetary policies are becoming the political football ahead of this spring's UK election. The list is long, the outcomes uncertain, the market risk high.

from Global News Journal:

Does Greece really deserve such a market pummelling?

February 3, 2010

So there's no question Greece has work to do to improve its bookkeeping.

Not only must it get spending in check,  but it needs to be a bit more honest about where its finances stand in the first place. After all, it's not often an EU country says one month that its budget deficit is a little over three percent of GDP and admits a few weeks later that, oh dear, it's actually nearer 13 percent.

Greece loses a major incentive to stay within EMU

January 28, 2010

cr_mega_503_JaneFoley-150x150-Jane Foley is research director of Forex.com. The opinions expressed are her own.-

from Breakingviews:

Has Greece delivered another Trojan horse?

January 14, 2010

Greece's economic statistics are dubious in more than one sense. The country probably bent its figures to get into the euro zone. Now, the EU is angry that Greece has not been straightforward about the size of its fiscal deficit. But the greater doubts concern how an uncompetitive, highly indebted, weakly governed country can live with a strong currency such as the euro.

Too soon to predict that EMU will wobble

January 13, 2010

foley-Jane Foley is research director at Forex.com. The opinions expressed are her own.-

from The Great Debate:

Icelandic, Greek sagas show sovereign risks

January 7, 2010

-- James Saft is a Reuters columnist. The opinions expressed are his own. --

Developments in cash-strapped Iceland and Greece nicely illustrate two themes for 2010: sovereign risk and financial balkanization.

from MacroScope:

The euro gets a warning shot of Greek fire

January 6, 2010

Juergen Stark , Germany's ECB executive board member, is well known as a true believer in tight fiscal discipline, so his reported comments in Italy's Il Sole 24 Ore about not bailing Greece out of its financial difficulties are not out of character. But the market reaction must have at least given pause for thought to EU leaders wondering how far to go in coddling their wayward child.

from Global Investing:

Who were the investment winners and losers in 2009?

December 30, 2009

Let's not beat about the bush: the winners in this year's investment stakes were those who cashed out early in the financial crisis, looked at hugely oversold stock markets in March and jumped back in. The losers were those who spent too much time thinking about it or, worse, thought it was a good idea to put all their money in Dubai stocks and  Greek government debt.