The Great Debate UK
Greece and the mythology of the EU
- Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own. -
The (probably temporary) resolution of the Greek crisis seems to have produced a result which was unexpected – by me, at least. For the first time in the history of the EU, the German taxpayer has refused to be sacrificed on the altar of European solidarity.
To see the significance of this event, recall that the Eurozone was born out of the willingness of former Chancellor Helmut Kohl, supported by the majority of Germany’s political class, to ride roughshod over the wishes of his electorate in the name of the country’s supposed postwar responsibilities and the associated moral imperatives.
By contrast, the current chancellor’s stance is an eloquent statement that Germany no longer feels any compulsion to play that role, that it can now be guided by its own national self-interest just like France or Britain, and that it is time for the EU to grow up and stand on its own two feet.
from The Great Debate:
The global economy, films and natural disasters
-- Dr. Gerard Lyons is chief economist and group head of global research at Standard Chartered Bank. The views expressed are his own. --
From three films to three natural events
Last year at the IMF, I spoke about the global outlook in the context of three films. The first was ‘No Country for Old Men’, as the catchphrase of that film – “You can’t stop what's coming” – described the imminent global recession. The second was ‘Apollo 13’, in which the head of mission control, Gene Krantz, is told, “This is NASA’s worst moment”. He replies that if the three astronauts are brought back to earth safely, it will be NASA's best moment – and is proven right. Likewise, if the problems facing the financial sector were addressed properly and it emerged from the crisis in good shape, this would be an Apollo 13 moment for the financial industry.
from The Great Debate:
Don’t cry for the dollar, yet
-- Agnes T. Crane is a Reuters columnist. The views expressed are her own --
It looks bad for the dollar, but looks can be deceiving.
Its sharp decline in the last week has pushed the euro to its highest level in a year and reignited fears that there's only one place for the dollar to go, and that's down.
Rhetoric from influential investors like Warren Buffett as well as big foreign buyers of U.S. debt like China and Russia has fed that sense of doom.
Wrong, wrong and wrong again – a response to “Latvia: let the lat go”
- Morten Hansen is a guest columnist, the views expressed are his own. He is head of the economics department at the Stockholm School of Economics in Riga -
The debate for or against a Latvian fixed exchange rate rages on. There are good pieces of analyses on both sides of the debate, there are less good ones, there are mediocre ones – and then there is Jonathan Ford’s “Latvia: let the lat go” from 29 July.
G8 signals end to dollar supremacy
- John Kemp is a Reuters columnist. The views expressed are his own. -
Reports that China has asked for a discussion about reserve currencies at next week’s expanded Group of Eight summit in Italy has added to confusion about whether the country wants to dethrone the dollar from its status as the world’s sole reserve currency. But the very fact the issue has been pushed onto the agenda suggests that a fundamental shift is underway.
Given the U.S. government’s enormous borrowing requirements over the next decade to cover the bank bailout, fiscal stimulus and deficits in Social Security and Medicare, the dollar’s reserve status depends on emerging markets’ continued willingness to accumulate U.S. liabilities rather than switching to other stores of value, such as the euro or the IMF’s Special Drawing Right (SDR).
from The Great Debate:
Reform the IMF and World Bank
- Johannes Linn is a Senior Fellow and the Executive Director of the Wolfensohn Center for Development at the Brookings Institution. The views expressed are his own. --
One of the tasks for the G20 Summit in London is the reform of the IMF and the World Bank, key global institutions to help address the current crisis and to prevent the occurrence of future crises. Reform of the IMF is more urgent both in the short and medium term while reform of the World Bank, although equally important, is less pressing.
from The Great Debate:
World stuck with the dollar, more’s the pity
-- James Saft is a Reuters columnist. The opinions expressed are his own --
The dollar is, and will remain, the U.S.'s currency and its own and everyone else's problem.
The idea of creating a global currency, as espoused by China earlier this week, is interesting, has a certain amount of merit and is simply not going to happen any time soon.
from The Great Debate:
Challenges for the G20: The IMF and regulation
-- Stephany Griffith-Jones is executive director of the Initiative for Policy Dialogue at Columbia University. The views expressed are her own. --
There are many important challenges facing G20 leaders when they meet in London in early April.
from The Great Debate:
New economies want power before paying
--Paul Taylor is a Reuters columnist, the views expressed are his own--
Anyone who expected the major emerging economies to write fat checks in exchange for being invited to the first G20 leaders' summit on rescuing the world economy will have been disappointed.
But that should only have surprised the naive.
Despite intensive lobbying by British Prime Minister Gordon Brown of Saudi Arabia and China, the rising powers were never likely to make a cash down-payment to the International Monetary Fund before getting more seats and votes at the top table.
