Abstract: A government that systematically finances spending through unsustainable levels of borrowing eventually finds itself in a crisis. The crisis is often triggered when economic growth slows or interest rates rise, leading to a vicious cycle of larger and larger interest payments. Often, such crises result in default on government…
Larry Summers, the former Clinton treasury secretary and more recently a top economic adviser to President Obama, has demonstrated two exceptional abilities. The first is an insightful review of conditions in the European crisis and why political solutions are so hard to come by. The second is he managed to get the same column into two of the world’s leading newspapers…
As the European economic crisis once again comes to a boil, many wonder how the Europeans put themselves in such hot water. This is a political crisis on top of an unemployment crisis, which bubbles on top of a fiscal crisis, underneath which is the critical element of an unsustainable imbalance in trade flows. While the trade imbalances within Europe have many causes,…
In 2002, former British Prime Minister Margaret Thatcher warned that building a European Union superstate “will seem in future years to be perhaps the greatest folly of the modern era.” Less than a decade later, she’s being proved right, as the EU faces the biggest crisis in its history. Last week, Eurozone leaders hammered out a makeshift deal to significantly…
Chairman Warner, Ranking Member Johanns, thank you for the opportunity to testify today. My name is J.D. Foster. I am the Norman B. Ture Senior Fellow at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation. The European Economic Crisis is no accident. It is…
Nile Gardiner discusses Greek austerity measures.…
When President Obama visits Ireland on May 23–24, he is expected to visit Moneygall in County Offaly, the ancestral home of his mother’s family. While finding Irish ancestors is a favorite electoral sport of American leaders, the President would be better advised to spend his time studying the Irish financial crisis, which has important lessons for America. If this…
On November 19, NATO leaders will meet in Lisbon for a formal heads-of-state summit. The dominant issue for the United States will be the adoption of NATO’s new Strategic Concept, the first of the new millennium. However, the Obama Administration should also throw its weight behind further expansion of the alliance, especially Macedonia’s accession. Macedonia has…
Abstract: The pretense that the European Union is successful and stable—and that the euro is a successful and stable currency—has been exploded by events surrounding the financial bailout of Greece. No one knows where the contagion will spread or how it may end. The world’s financial markets have occasionally teetered on the edge of panic. But the full implications of…
Abstract: Long-run federal spending is wildly unsustainable, as almost everyone from right to left agrees. Under President Obama, this long-run problem has been married to an almost equally unsustainable short-run problem of deficit spending. Thus, to watch developments in Europe today is to peer through a clear window into America’s own future. As the nation runs…
This weekend, the Eurozone members and the International Monetary Fund (IMF) proposed a €110 billion ($140 billion) rescue package for the struggling Greek economy. In exchange for imposing tough austerity measures—including a three-year public sector pay freeze, an increase in taxes, and a liberalization of labor laws—Eurozone countries will provide €80 billion in…
(Archived document, may contain errors) 445 July 18, 1985 UmSm GREECE RELATIONS AN AGONIZING REAPPRAISAL INTRODUCTION Greek Prime Minister Andreas Papandreou has provoked considerable teeth gnashing in Washington and the other Western alliance.capitals since assuming power in 19 81. The lapse in Greek security measures that apparently allowed TWA Flight 847 to be…
Today, Cyprus’s banks opened for the first time in more than 10 days, after Cypriot President Nicos...…
January’s unemployment numbers for the 17 countries of the eurozone has moved closer to 12 percent. This underscores...…
French President Francois Hollande told reporters yesterday that Boko Haram, an Islamist terrorist group based in...…
You’re busy. So busy you barely have time to read these words. So why should you care about the us debt? Does it affect...…
Congressional lawmakers met last week to try to hammer out a deal to avert the fiscal cliff. Democrats insist on revenue...…
The President and his team have been blaming "European headwinds" for some of the U.S. economy's woes. But the truth is...…
How did Greece get into its fiscal situation? It’s best explained in a parable. Helen is an elegant, if somewhat...…
Last weekend, the people of France took a sharp turn to the left, and the rest of Europe may be on the brink of...…
The European euro/debt/growth/banking/identity crisis is entering its third year. With so many summits, toasts, tense...…
We’ve corrected Paul Krugman in the past, when he mistakenly invoked imaginary British spending cuts as proof that...…