The Great Debate

Europe should avoid eating its seed corn

By Thomas Cooley
October 21, 2011

By Thomas Cooley
The views expressed are his own.

The European debt crisis has put the banking system in peril and is threatening to end the grand European experiment. It is a test of whether European governments can find enough political common ground to find a solution to the problems created by sovereign fiscal policies in the periphery countries. Severe as the fiscal issues are, there are other problems that are likely to divide Europe into prosperous and stagnant zones for a very long time to come. The periphery countries have underinvested in human capital since the Euro was created and this will continue to exacerbate the economic division of Europe. Persistent inequality cannot be good for the stability of the union.

from Ian Bremmer:

Slaughtering the PIIGS

By Ian Bremmer
September 14, 2011

By Ian Bremmer
The opinions expressed are his own.

Nobody likes to be called PIIGS. For years, Europe’s so-called peripheral countries -- Portugal, Italy, Ireland, Greece and Spain -- have complained about this acronym, but the euro zone’s sovereign debt problems have only entrenched it further. Yet, it’s time to acknowledge that the PIIGS have a point. They don’t deserve to be lumped together. Their actions and their circumstances have sharply diverged over the past three years.