If freedom of movement within Europe is to be maintained — and if high inflows of non-EU citizens continue — European welfare states face a stark choice: adjust or collapse.
If recent events have taught us anything, it is that threats to the EU stem not from inadequate fiscal risk-sharing, but from insufficient coordination on foreign-policy and security challenges.
In order to avert chaos, Germany has no choice but to impose restrictions on the number of migrants it accepts.
The euro has brought a balance-of-payments crisis to Europe, just as the gold standard did in the 1920s. Only one difference exists between the two episodes: In today's crisis, huge international rescue packages have been available. These rescue packages have relieved the eurozone's financial distress, ...
There is no other way for Italy to correct its price differential with Germany and other EU members than to carry out a real depreciation, something that is easier said than done.
The euro crisis has passed through six phases so far. The seventh phase of the crisis appears to be one of enhanced moral hazard, stemming from a runup in debt.
Eurozone members whose path to regaining competitiveness through price and wage reductions is too long and grueling, and whose societies risk being rent asunder by the imposition of austerity, may have to temporarily exit the monetary union.
Politically it would be a big mistake for Germany to exit the eurozone, because doing so would jeopardize the greatest success story of the postwar period in Europe.
Europe and the world are eagerly awaiting the decision of Germany's Constitutional Court on September 12 regarding the European Stability Mechanism (ESM), the proposed permanent successor to the eurozone's current emergency lender, the European Financial Stability Mechanism. The Court must rule on German plaintiffs' ...
In blatant violation of the Maastricht Treaty, the European Commission has come forward with one bailout plan after another for Europe's distressed economies. Now it wants to socialize not only government debt by introducing Eurobonds, but also banking debt by proclaiming a "banking union." Socializing ...