Global Economy

Weidmann said the policies of austerity he supported would work slowly but staying the course was important. To him, a lost generation of young workers, who were denied skilled training and out of work for several years, is a matter for individual countries. He cannot see that sovereign states under the current arrangements are denied the funds to invest and improve productivity over the longer term. He cannot see that austerity, if only for this reason, is self-defeating.

At the Time Warner Center, anEnclave of Powerful Russians

Four principles for an effective state

Four principles for an effective state

For the third time in a century, America will have to ride to Europe's rescue

For the third time in a century, America will have to ride to Europe's rescue

Greece threatens tilt to Russia and China unless Europe yields

Greece's radical new government has threatened to seek money from Russia and China to avert a financial crisis rather than yield to austerity demands from Europe,

the defence minister

Jobs, Productivity and the Great Decoupling

The Greek Austerity Myth

Greece actually spends less on debt service than Italy or Ireland, both of which have much lower (gross) debt-to-GDP ratios. With payments on Greece's official foreign debt amounting to only 1.5% of GDP, debt service is not the country's problem.

The new Greek government's argument that this is an unreasonable target fails to withstand scrutiny. After all, when faced with excessively high debt, other European countries – including Belgium (from 1995), Ireland (from 1991), and Norway (from 1999) – maintained similar surpluses for at least ten years each, typically in the aftermath of a financial crisis.

In fact, creditors arguably are more responsible: typically, they are sophisticated financial institutions, whereas borrowers frequently are far less attuned to market vicissitudes and the risks associated with different contractual arrangements. Indeed, we know that US banks actually preyed on their borrowers, taking advantage of their lack of financial sophistication.

Every (advanced) country has realized that making capitalism work requires giving individuals a fresh start.

There is a fear that if Greece is allowed to restructure its debt, it will simply get itself into trouble again, as will others.

even if all of its past debts are forgiven.

But even if Greece’s debt had been completely wiped out, going from a primary deficit of 10% of GDP to a balanced budget requires massive belt tightening – and, inevitably, recession.

Nonetheless, Europe needs to be much more generous in permanently writing down debt and, even more urgently, in reducing short-term repayment flows.

A Possible Day of Reckoning, Again, for Greece and Europe

Black & White and Scanned All Over

Aluminium Industry

Chief EU scientist backs damning report urging GMO ‘rethink’

German Study Finds GM Crops Good for Farmers and the Environment

The Geopolitical Impact of Cheap Oil