The Great Debate UK

from The Great Debate:

EU prosperity at stake in crisis disunity

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Paul Taylor Great Debate-- Paul Taylor is a Reuters columnist. The opinions expressed are his own --

The global financial crisis has been a stark reality check for the European Union, exposing divergences over economic policy and highlighting the European Commission's growing difficulty in enforcing common rules.

The European response to the turmoil shows that most real power still resides with member states, not in Brussels. Even after 50 years of integration, governments instinctively reach for national solutions at the risk of harming EU partners.

The 27 EU leaders, especially the big three of Germany, France and Britain, need to take a deep breath before next week's summit and measure how much damage they could inflict on future prosperity and on Europe's credibility in the world if they continue down this path.

The EU united briefly in October behind a plan to avert a meltdown of the financial system and a call for a global summit to reform financial supervision, incorporating the emerging economies of Asia, Africa and Latin America.

from The Great Debate:

Einstein, insanity and the war on drugs

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Bernd Debusmann - Great Debate- Bernd Debusmann is a Reuters columnist. The opinions expressed are his own -

Albert Einstein defined insanity as doing the same thing repeatedly and expecting different results. His definition fits America's war on drugs, a multi-billion dollar, four-decade exercise in futility.

The war on drugs has helped turn the United States into the country with the world's largest prison population. (Noteworthy statistic: The U.S. has 5 percent of the world's population and around 25 percent of the world's prisoners). Keen demand for illicit drugs in America, the world's biggest market, helped spawn global criminal enterprises that use extreme violence in the pursuit of equally extreme profits.

from The Great Debate:

Credit cards unkindest cut for U.S. consumers

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

Government intervention or not, banks will be cutting up America's credit cards at an unprecedented rate, with grave implications for the economy and company profits.

The U.S. Federal Reserve last week added more nutrition to its alphabet soup of rescue programs when it unveiled the Term Asset-backed Securities Loan Facility (TALF), under which, among other things, it will lend up to $200 billion to investors in securities backed by credit-card, auto and student loans.

from The Great Debate:

Dollar demise much exaggerated

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John Kemp Great Debate-- John Kemp is a Reuters columnist. The opinions expressed are his own --

Perhaps the most surprising development over the last three months has been the surging value of the currency at the heart of the crisis. It is almost as if investors have responded to a fire alarm by running towards the source of the fire.

From a recent low on July 15, the U.S. dollar's trade-weighted value has risen 19 percent. The dollar has been broadly stable against China's yuan (+1 percent) while posting massive gains against the Swiss franc (+20 percent), the euro (+26 percent), the British pound (+35 percent) and the Australian dollar (+52 percent). Only against Japan's yen has the currency slipped marginally (-6 percent).

from The Great Debate:

Light at the end of the tunnel

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John Kemp Great Debate-- John Kemp is a Reuters columnist.  The opinions expressed are his own --

After more than a year of denial, misdirected policies and a steadily worsening outlook, the past fortnight has witnessed a marked improvement. For the first time, there are reasons to be cautiously optimistic that the economy faces a recession rather than a prolonged slump, and recovery could get underway in H2 2009.

Markets share some of that optimism. The Dow Jones Industrial Index has risen 15.5 percent over four consecutive sessions, the most sustained rally since April 2008. It is not yet time to break out the champagne. But there are reasons to start looking through short-term weakness to focus on an eventual, albeit modest, recovery by the end of next year.

from The Great Debate:

Even UK guarantee can’t stop housing crash

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

Britain needs to reflate its mortgage markets to save its economy and its banks. Problem is, few want to borrow and there is precious little money to lend.

British property prices are down about 15 percent in a year and mortgage approvals are down 52 percent. Given the freeze in the securitization market and the scarcity of savings in Britain, new net mortgage lending may even fall below zero in 2009, according to James Crosby, former head of UK mortgage bank HBOS, who authored a government report on the mortgage market.

from The Great Debate:

A credible counterterror strategy needed

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brahmachellaney-- Brahma Chellaney is professor of strategic studies at the Center for Policy Research, New Delhi. The views expressed are his own. --

The brazen Mumbai terrorist assaults are just the latest example of how the world’s largest democracy is increasingly coming under siege from the forces of terror.

from The Great Debate:

CDS market: contributor, not cause

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williams_mark-- Mark T. Williams is a finance professor at Boston University’s School of Management. The opinions expressed are his own. --

The Credit Default Swap market shares some blame, but it isn’t justified to make it the Beltway’s latest scapegoat responsible for the economic meltdown.

from The Great Debate:

Silence is no defense for Euro tech executives

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-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

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A man keys in a message onto a mobile phone in a Milan bar March 3, 2006. REUTERS/Daniele LA Monaca When on trial, any attorney will tell you, the best defense is to stick with what you know and speculate about nothing.

from The Great Debate:

Fighting deflation globally ain’t easy

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

With the U.S., Japan and Britain -- nearly 40 percent of the global economy -- facing the threat of deflation, it's going to be just too easy for one, two or all three of them to get the policy response horribly wrong.

The global economy is so connected, and our experience with similar situations so limited that the scope for error is huge.

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