NEW YORK | The year is coming to an end and the European sovereign crisis is definitely THE topic of the 2011 special issues. We have extracted some quotes and reading tips for our readers.
From The Times:
“With mounds of European debt due to be refinanced early next year, the crisis is far from over.
“Both Spain and Ireland have run balanced budgets, or even budget surpluses, in recent years, and both were well within the Maastricht criteria, but became speculative targets in the credit crisis anyway.
“Austerity tends to bring recession, not growth, and Europe needs growth to cope with its debt.
“Britain’s isolation and the visible division in the union are not welcomed by most members of the EU, who value British practicality and economic liberalism and see it as a vital part of the European single market.
“Italy and Spain suddenly found themselves forced to pay the steep interest rates investors had been charging countries like Portugal and Ireland.”
From The New Yorker:
“Italy and Spain have genuine troubles: their economies are weak and their debt loads are high. But these problems are manageable as long as the interest rate on their debt stays reasonably low.
“The push for more short-term spending cuts is both heartless and self-defeating: these countries desperately need anything that can promote economic growth.
“Even if Europe hadn’t decided to gird itself for fiscal austerity with no monetary relief, growth is decelerating markedly elsewhere around the globe. Blame the tragedies of Japan’s tsunami or Thailand’s floods or the European sovereign debt crisis if you will, but the world’s growth engine is stalling.
One of the most controversial op-eds in the last weeks has been David Brook’s column about the origins of the crisis. Mr Brook said:
“Over the past few decades, several European nations, like Germany and the Netherlands, have played by the rules and practiced good governance. They have lived within their means, undertaken painful reforms, enhanced their competitiveness and reinforced good values. Now they are being brutally browbeaten for not wanting to bail out nations like Greece, Italy and Spain, which did not do these things, which instead borrowed huge amounts of money that they are choosing not to repay.”
NY Mag‘s Jonathan Chait calls Brooks op-ed a “familiar conservative morality tale”.
That stereotype of lazy southern Europe and the hard working North is just not reflected in the data, as explained the Global Macro Monitor.
With a great amount of irony, Matthew Yglesias writes for Slate: Since When Do Conservative Pundits Love Northern European Social Democracies?
“American liberals who’ve spent years, decades, even!, talking admiringly about the northern European social model. And most of us still admire it. But what aspects of it do the American right admire? It doesn’t seem to be the budgetary priorities, so maybe it’s the way putting labor union representatives on corporate boards of directors seems to help inspire a less conflict-oriented approach to wage-setting?
“Note that for the United States to live within its means in the way that Germany and the Netherlands have would be to increase taxes, cut defense spending, institute health care price controls, and make social welfare benefits more generous.”
Enjoy the reading!