While the global economy has overcome many of the effects of the financial crisis, slow growth, job losses in traditional sectors, and increasing inequality are testing the ability of governments in advanced economies like the United States and Germany to provide broad-based prosperity. A high-standard, rules-based international trading system and well-regulated financial markets will continue to be important drivers of economic growth and a focus of attention for governments and business alike.
In this week’s At Issue, Executive Director Dr. Jackson Janes discusses the declining value of the dollar versus the euro and the implications for both Germany and the United States in maintaining confidence in economic fundamentals at home and abroad.
In an essay originally written for Handelsblatt, AICGS Trustee and former U.S. Ambassador to Germany John Kornblum argues for a new Atlantic equation as current events slowly make the old format of the transatlantic alliance obsolete. Kornblum writes that by defining a pragmatic vision of openness and transparency for transatlantic relations, we can maximize each side’s strengths to set a global example for the future. This essay originally appeared in the April 15, 2011, edition of Handelsblatt.
As the financial crisis within the euro zone widens, governments have been at a loss for immediate action to resolve the situation. In an essay based off of his remarks given at a recent AICGS conference on Balancing Global Macroeconomic Discrepancies, Jacob Funk Kirkegaard of the Peterson Institute for International Economics suggests that the Brady Plan from the Latin American debt crisis in the 1980s might provide a good model for the euro zone as it tries to extricate itself from further crisis.
The outcome of the euro area meeting last week was far more substantive than expected, even if one takes into account that the expectations had been at rock bottom, writes Jacob Kirkegaard, research fellow at the Peterson Institute for International Economics and a regular contributor to the Advisor. Not only did EU leaders demonstrate how they intend to prevent peripheral defaults, they also gave us an idea of their longer-term solutions for Europe’s economic problems and future integration, Kirkegaard argues.
The “creative economy” is an important economic factor in Germany, write former Deutsche Bank/AICGS Fellow Thomas Dapp and Philipp Ehmer, producing goods and services worth over 60 billion euros in 2009. The industry has significant growth potential for the future, but some changes within the sector are necessary – namely some changes to copyright and patent statutes – to achieve the maximum growth potential.
Chancellor Angela Merkel has some major challenges ahead regarding the future of the euro, writes Senior Non-Resident Fellow Dr. Ulrike Guérot of the European Council on Foreign Relations (ECFR). Dr. Guérot argues that Chancellor Merkel’s options regarding reform efforts in the euro zone have been severely limited by domestic issues, and that her ability to reach a compromise with other EU countries depends on the outcome of these domestic developments. This essay originally appeared in the ECFR’s blog on February 24, 2011.
In this week’s At Issue, Executive Director Dr. Jackson Janes examines the current concerns about the future of the euro and the challenges of securing both consensus among the euro zone members and domestic political support for the European single currency, especially in Germany.
As euro zone governments quietly work on a proposal to relieve Greek bond debt, a much louder debate over the future of the euro zone has come about across Europe. The following several articles focus on the debate and show the range of opinions regarding the future of the euro zone.
Germany has become the object of Europe’s resentment, writes Stefan Theil, Newsweek correspondent and a regular contributor to the Advisor, mostly because the weak euro has meant a strong German. But at the same time, Theil argues, Germans are starting to feel some disillusionment with supporting some fellow euro zone members, a growing attitude that will eventually force action – action that Germany will likely lead. This essay originally appeared in the January 23, 2011, edition of Newsweek.
Jochen Bittner, a regular contributor to the Advisor, argues that behind all of the euro zone debate lies a simple but unpleasant truth: The monetary union came too soon. Certainly it is difficult to shift strategies in the middle of a crisis, but Bittner contends that nothing less than a ‘reset’ will help the euro zone out of this mess, something the German government is eager to tackle, even if it won’t admit so publicly. This essay originally appeared in the January 18, 2011, edition of Die Zeit and is available in German only.
As Portugal, Spain, and others have to pay exorbitant interest rates on their government debt, all of Europe is threatened with an increasingly worse economic crisis, writes Senior Non-Resident Fellow Dr. Sebastian Dullien. Germany could help, Dr. Dullien argues, but instead a ‘stingy’ Chancellor Merkel is endangering the euro zone with her government’s mindset of demanding punishment for countries in crisis. This essay originally appeared in the January 17, 2011, online edition of Der Spiegel and is available in German only.