Western capitalism has few sacred cows left. It is time to question one of them: the independence of central banks from elected governments. The rationale for entrusting monetary policy fully to central banks is well understood: politicians, overly tempted during the electoral cycle to create more money, pose a threat to economic stability. While progressives […]
Europe’s Illiberal Establishment
On March 25, Europe’s leaders convened in the birthplace of the “European project” to celebrate the 60th anniversary of the Treaty of Rome. But what exactly was there to celebrate? Were they reveling in Europe’s disintegration, which they now call “multi-speed” or “variable geometry” Europe? Or were they there to applaud their business-as-usual approach to […]
A New Deal To Save Europe
“I don’t care about what it will cost. We took our country back!” This is the proud message heard throughout England since the Brexit referendum last June. And it is a demand that is resonating across the continent. Until recently, any proposal to “save” Europe was regarded sympathetically, albeit with skepticism about its feasibility. Today, […]
The ECB’s Illusory Independence
A commitment to the independence of central banks is a vital part of the creed that “serious” policymakers are expected to uphold (privatization, labor-market “flexibility,” and so on). But what are central banks meant to be independent of? The answer seems obvious: governments. In this sense, the European Central Bank is the quintessentially independent central bank: No […]
Imagining a New Bretton Woods
The financial meltdown of 2008 prompted calls for a global financial system that curtails trade imbalances, moderates speculative capital flows, and prevents systemic contagion. That, of course, was the goal of the original Bretton Woods system. But such a system today would be both untenable and undesirable. So, what might an alternative look like? The […]
Why The UK Should Stay In The EU
In an interview with EUROPP’s editor Stuart Brown, former Greek finance minister Yanis Varoufakis discusses the launch of his new ‘Democracy in Europe’ movement (DiEM25), the UK’s upcoming referendum on EU membership, and why a surge of democracy is needed to prevent the EU from sliding toward disintegration. You have just launched a new political movement, DiEM25, […]
Greece’s Two Currencies
Imagine a depositor in the US state of Arizona being permitted to withdraw only small amounts of cash weekly and facing restrictions on how much money he or she could wire to a bank account in California. Such capital controls, if they ever came about, would spell the end of the dollar as a single […]
The Great Greek Bank Robbery
Since 2008, bank bailouts have entailed a significant transfer of private losses to taxpayers in Europe and the United States. The latest Greek bank bailout constitutes a cautionary tale about how politics – in this case, Europe’s – is geared toward maximizing public losses for questionable private benefits. In 2012, the insolvent Greek state borrowed […]
Schäuble’s Gathering Storm
Europe’s crisis is poised to enter its most dangerous phase. After forcing Greece to accept another “extend-and-pretend” bailout agreement, fresh battle lines are being drawn. And, with the refugee influx exposing the damage caused by divergent economic prospects and sky-high youth unemployment in Europe’s periphery, the ramifications are ominous, as recent statements by three European […]
The Refugee Crisis, Immanuel Kant And Germany’s Moral Leadership
Economists err when they think that human rationality is all about applying one’s means efficiently in order to achieve one’s ends. That the efficient application of available resources in the pursuit of given objectives is an important dimension of our Reason, there is no doubt. The error however sips in when economists, and those influenced […]
Democratizing The Eurozone
Like Macbeth, policymakers tend to commit new sins to cover up their old misdemeanors. And political systems prove their worth by how quickly they put an end to their officials’ serial, mutually reinforcing, policy mistakes. Judged by this standard, the eurozone, comprising 19 established democracies, lags behind the largest non-democratic economy in the world. Following […]
The Greek Plan For Growth & Recovery: Two Documents Tabled In May And June 2015
Now that Greece’s Third Memorandum of Understanding has passed (see here for my annotated version), after the SYRIZA government surrendered on 12th July 2015, it is perhaps of interest to compare the ‘Reform Agenda’ in that agreement with the agenda the Ministry of Finance had presented to the institutions on two occasions, in May and June 2015. During the five […]
