The Bundesbank isn’t mad. In a world where it is increasingly fashionable to call for central banks to print money, the German central bank is one of the last bastions of orthodoxy. Although its stance is extreme, it is a useful antidote to the theory that easy money is a cost-free cure to economic ills.
The UK faces half a decade of limbo-land. David Cameron’s promise of an in/out referendum on Britain’s membership of the European Union by the end-2017— provided he wins the next election – means an extremely long period of uncertainty for business. That will be bad for investment. It also heightens the risk of an eventual “Brexit” – a British exit from Europe – which would be even worse for the economy.
Mario Draghi didn’t quite coin a new phrase last week. But the European Central Bank president certainly popularised the expression “positive contagion”. After years in which the euro zone has been suffering from plain old contagion – which doesn’t even need the qualifier “negative” – Draghi now thinks a positive dynamic is in play.
David Cameron is planning a keynote speech on Britain’s relationship with the EU later this month. Here is what the UK prime minister should say.
The euro crisis is forcing euro zone nations to rethink how they wish to run their currency union. It is also forcing European Union countries that don’t use the single currency, such as Britain, to rethink their relationship with Europe.
One doesn’t have to be a Mayan to believe that tomorrow represents a numerological end of an era. Apocalyptic visions stem from reading the Mesoamerican Long Count Calendar. But even using the widely used Gregorian Calendar, there’s something special about today: 20.12.2012.
Who is Europe’s most powerful man? If one phrased the question as who is Europe’s most powerful person, the answer might well be Angela Merkel. But the deliberate use of the masculine excludes Germany’s chancellor, leaving the field open to Mario Draghi.