Europe needs to make up its mind

Europe s Trust Deficit

Europe s Easy Money Endgame

Europe s Pointless Deficit Targets?

Only the European Central Bank could implement true socialization of national debt in the eurozone. But EU law expressly forbids any form of ECB financing of deficits.

European Central Bank President Mario Draghi s announcement last summer that the ECB would do whatever it takes to preserve the euro reassured financial markets. But, as pressure from financial markets has eased, so has European leaders incentive to address problems with the eurozone s underlying economic and political dynamics.

In the last 60 years, the US has underpinned global growth by running persistent current account deficits. Under the Bretton Woods system, the US ran deficits that enabled war torn Europe and Japan to rebuild.

CAMBRIDGE The European Central Bank is moving, hesitantly but ineluctably, toward quantitative easing. The threat of deflation and the ineffectiveness of its previous measures leaves it no choice.

Its monetary policy cannot be perfectly suited to all members needs all of the time. For the euro s first ten years, the ECB s policy was too lax for Spain now it is too lax for Germany.

Europe did not have it al their own way though on a pleasant, breezy day south west of Paris.

A mild recession is expected in Europe this year, and unemployment is on the rise. Beyond deficit reduction, we need to implement a 120 billion ( 155 billion) European investment plan, and deepen the European Single Market to unleash its growth potential.

Unfortunately, Europe s system of direct government financial support is falling victim to Europe s slow economic growth and budget deficits. Particularly for those countries that have adopted the euro, government spending on the arts will be constrained for some time by the requirement that fiscal deficits be kept to 3 of GDP.

Europeanizing Europe

Europe s economy remains shackled by three problems sovereign debt, the euro, and wobbly banks despite several new policy backstops the European Stability Mechanism (ESM) the European Central Bank s easy money policies and holdings of sovereign debt and the ECB s takeover in November of supervision of the 130 or so largest pan eurozone banks. None of these reforms has been sufficient to restore the stronger growth that Europe desperately needs.

But Europe must not heed short sighted calls to relax its environmental standards, which some claim harm its competitiveness vis à vis countries with looser rules. Given their global reputation as guarantors of quality, Europe s high environmental standards are crucial to its future competitiveness, and should therefore be actively promoted, particularly in trade agreements.

Rich Europe, Poor Europe

Adding 400 billion would increase the pool substantially. Together with asset backed securities, covered bonds, and corporate bonds, 1 trillion of assets the threshold widely thought to make quantitative easing by the ECB credible would be available for purchase.

But few official pronouncements, let alone policies, are addressing Europe s deficit of trust and credibility. The current crisis has exposed the original lacunae and widening cracks in the compact between Europe s citizens and EU institutions, between Europe s north and south, and between its peoples and its elites.

Thus, if anything, emerging market leaders should have complained about European austerity, not about US quantitative easing. Fed Chairman Ben Bernanke s talk of tapering quantitative easing might have triggered the current bout of instability but emerging markets underlying vulnerability was made in Europe.

Europe (ESA)

How Europe Can Rescue Europe

Richard Nixon s treasury secretary, John Connally, once told a group of European leaders that while the dollar was America s currency, its misalignment was Europe s problem. Today, the misalignment of the dollar and the euro against the renminbi and other Asian currencies is increasingly becoming Asia s problem.

NEW YORK The European Central Bank has finally launched a policy of quantitative easing (QE). The key question at this stage is whether Germany will give the ECB the freedom of maneuver needed to carry out this monetary expansion with sufficient boldness.

Pushing up asset prices and pushing down the euro s exchange rate will require the ECB to buy bonds on the secondary market not the crisis countries bonds per se, but those of all eurozone members. In other words, it will require quantitative easing.

After years of austerity, infighting, and unemployment, it is time to implement a QE program that delivers what Europe needs.

An institution, the European Investment Bank (EIB), already exists to carry out such a program. It should be recapitalized on a sufficient scale to offset the contractionary effects of Europe s national deficit reduction programs.

1 Council of Europe, European Treaties, ETS No. 74.

They cite the southern European countries chronic external deficits. They highlight the eurozone s institutional deficits a single currency and a central bank but none of the other elements of a well functioning monetary union.

Nor does the ECB have reason to be gratified with its strain of quantitative easing. Despite a doubling of its balance sheet, to a little more than 3 trillion ( 4 trillion), Europe has slipped back into recession for the second time in four years.

The European Oasis

Ecb Is Now Europe s Anchor

Europe u0027s Unity in European Values

Within the Asia Europe Meeting (ASEM)

Last year, the eurozone was on the verge of a double dip recession. When it recently fell into technical deflation, the European Central Bank finally pulled the trigger on aggressive easing and launched a combination of quantitative easing (including sovereign bond purchases) and negative policy rates.

But none of these is the deficit that really matters. The deficit that prevents Europe from drawing a line under its crisis is a deficit of trust.

In addition, the ECB could purchase EIB bonds on secondary markets, which would help to keep funding costs low or even reduce them. More important, purchases of EIB bonds would enable the ECB to undertake quantitative easing without triggering the degree of controversy implied by intervening in 18 separate sovereign bond markets, where concerns that ECB purchases would affect the relative pricing of sovereigns are very real.

In collaboration with ESA ESRIN, SPOT Image is currently conducting a comprehensive evaluation of SPOT ERS data complementarity in European Community ESA ASEAN pilot projects in tropical and equatorial regions, with a particular focus on applications concerning cartography, interferometry and agriculture.

The European Union s Maastricht criteria, which cap deficits at 3 of GDP, belong in the same category a measure that could be relaxed as the political pressure changed, but which did help initially in reducing deficits and borrowing costs.

But, for the ECB's plan to work, its QE must be robust and that will require broad support. After all, eurozone monetary policy is the product of joint decision making within the ECB governing council, where Germany's influence is strong.

The Sub Commission nominated the following experts as members of the working group Halima Warzazi (Africa), Miguel Alfonso Martínez (Latin America and the Caribbean), Gudmundur Alfredsson (Western Europe and other States), Gáspár Bíró (Central and Eastern Europe), and Chin Sung Chung (Asia).

The Sub Commission nominated the following experts as members of the working group Halima Warzazi (Africa), Miguel Alfonso Martínez (Latin America and the Caribbean), Gudmundur Alfredsson (Western Europe and other States), Gáspár Bíró (Central and Eastern Europe) and Chin Sung Chung (Asia).

But the euro weakness triggered by quantitative easing has further boosted Germany s current account surplus, which was already a whopping 8 of GDP last year. With external surpluses also rising in other countries of the eurozone core, the monetary union s overall imbalance is large and growing.

Economic Commission for Europe (ECE)

Europlatforms European Economic Interest Grouping

(c) European Trade Union Confederation (ETUC)