The saddest thing about the European crisis is the determination of today’s leaders to present their policies as the only ones possible, and the fear they feel when any political shock looks likely to disturb this happy equilibrium.
To pick up a few billion in exports, we’re now willing to sell anything to anyone. We’re willing to become a tax haven, to have oligarchs and multinationals paying less in taxes than the middle and working classes, to ally with rather unprogressive oil emirates just to get a few crumbs for our foot…
The problem of the day is that Cypriot banks, in effect, don’t have that money anymore: it was invested in now-depreciated Greek bonds and real estate investments that were partly illusory. Quite naturally, the European authorities are reluctant to bail out banks without getting anything in return,…
On the other hand, there are domains like financial regulation and tax havens where each country can’t do much on its own, where the right level of intervention is clearly European. At the scale of the global economy, France and Germany are hardly bigger than Greece or Ireland. By remaining divided…
Why do the vast majority of economists believe in free trade? Because they learned in school that it’s more efficient, in the first instance, to try to produce as much wealth as possible by relying on free and competitive markets to maximize everyone’s comparative advantage. Even if that means, in …
