Brussels blog round-up for 8 – 14 December: French
conservatives implode, Wilders resurgent, and should Europe accept higher inflation? – europp
/ LSE
Barry Eichengreen: Europe can
either move forward, toward deeper integration, or it can move backward, toward
national sovereignty. Its leaders and, this time, its people need to decide. It
is on their decision alone that the future of both the euro and the EU depends.
Will a
continent turn its back on democracy?
The main
argument in The Globalization Paradox is that we can’t simultaneously pursue
economic globalization, democracy and national determination, but at most have
two out of three. You also write that EU was the exception that tests the rule.
Well, hasn’t the on-going crisis shown that this trilemma definitely also holds
true for the EU? And hasn’t the crisis revealed that the European nations are
not so similiar as it may have appeared? The differences between North and South Europe are perhaps so great that such a
large union is an unrealistic project, not to mention the Eastern Europe?
The real
difference in material interests generates different visions for the future of Europe.
More and more Europeans are coming around to the view
that Greece needs to
have its debt cut yet again, and that this time official claims on Greece should be
cut as well. But few Europeans today believe that Italy, Spain or Portugal, much
less France, will
need debt reduction. Give them time. It was not so long ago that few Europeans
could imagine a euro crisis.
The German Erosion: Dilemmas of the Last
Triple-A Eurozone Economies – EconoMonitor
Until
recently, the Eurozone crisis was cushioned by the strong performance of the
German economy. But those days are fading.
Capital outflows in the euro area: is there a
sign of relief? – bruegel
The
eurozone’s path to genuine economic union will be fraught with political and
institutional challenges – from determining substantive areas of cooperation to
protecting the rights and interests of all EU countries and safeguarding the
unity of both the internal market and foreign relations. But navigating that
path is the EU’s only option.
Populism has the potential to damage European
democracy, but demonising populist parties is self-defeating – europp
/ LSE
For anyone struggling to grasp German attitudes to
money and debt in the eurozone crisis, all roads lead to Frankfurt.
Financial-transaction
taxes: Early evidence from the French tax – The
Economist
Taxing finance is easier for European politicians than
taking responsibility for it.
The French Death Rattle – Project
Syndicate
So the
death rattle of the French economic model continues. What remains to be seen is
how the end will come. And, whether it comes in the form of a capital strike by
foreign bondholders, or of domestic labor strikes and wider social and
political unrest, France’s leaders remain entirely
unprepared for the inevitable.
Draghi - Interview
with Financial Times – ECB
With Lionel Barber, FT editor and Michael Steen, Frankfurt bureau
chief, on 11-Dec and published on 14-Dec
Sharp banking sector deleveraging still hampers Ireland's economic recovery – Sober Look
Fighting Recession the Icelandic Way – View / BB
Sharp banking sector deleveraging still hampers Ireland's economic recovery – Sober Look
Fighting Recession the Icelandic Way – View / BB
The Icelandic Success Story – ZH
BANKING UNION
After the
euphoria following the agreement on banking supervision that was finally
reached between the 27 member states – the embryo of a banking union – the
European press, given the details of the mechanism worked out in Brussels, has lost some enthusiasm.
EU Bank Regulation Deal Marks Path to True Economic Union – View / BB
The euro area still needs a permanent system for
fiscal transfers to help vulnerable economies in the future. Yet the fact that
leaders could agree on a single banking authority shows there is a desire and
the political will to achieve a true economic union. It may take another five
years to get there, but the pathway has been marked.
Macroprudential supervision in banking union – voxeu.org
Macroprudential supervision in banking union – voxeu.org
Eurozone
banking union discussions are full of questions about the scope of Eurozone
microprudential bank supervision. Yet, this column argues that there is
surprisingly little debate on the macroprudential supervision that is necessary
to safeguard the wider European financial system. After all it is macro
developments, such as fast rising housing prices, that lie at the heart of the
ongoing crisis in Europe. To safeguard the financial system, Eurozone macroprudential tools
should be under the ECB, separate from microprudential functions, with input
from national central banks when differentiation is necessary.
BANKING
Financial Stability
Review Dec-2012 – ECB
Banks are changing. That means other providers of
capital must step forward, especially in Europe
Non-bank finance:
Filling the bank-shaped hole – The
Economist
Europe’s banks are
shrinking. What will take their place?
ITALY
Europe’s worries about Italy – The
Economist
The resignation of Mario Monti as Italy’s prime
minister, provoked by Silvio Berlusconi’s attempt to return to power, is
worrying Europe’s chancelleries.
Italian prime minister Mario Monti has said he’ll
resign, making elections likely to occur next February. But who is likely to
win, or even who will run, remains unclear. Both Mr Monti and Silvio Berlusconi
are possible candidates. Guy Dinmore, FT bureau chief in Rome, Tony
Barber, Europe editor, and
Ferdinando Giugliano, leader writer, join Gideon Rachman.
Will Monti run for
prime minister? – The
Economist
How to prevent Silvio Berlusconi from returning to
power
Italian politics in
turmoil: Run, Mario, run – The
Economist
A rare chance of reform in Italy—but its
current prime minister needs to come out fighting