The global economy has still not overcome effects of the financial and economic crises in 2008 and 2009. Despite improvements in the American and European financial markets in 2010, the fiscal crisis in Greece and the rising U.S. deficit have caused a decline of trust in the capital markets and have overshadowed any growth in the real economy. Overcoming the recession and returning to a sustainable growth pattern is of paramount importance for the wealth and security of all nations and has an impact on almost all other policy areas. A cornerstone of the important transatlantic business partnership, German and American economic policies go beyond domestic issues and influence global markets, businesses, and governments.
There is currently no national government in the European Union (EU) that is not indebted to a certain extent. The same holds true for the United States, Switzerland, and the other member countries of the Organization for Economic Cooperation and Development (OECD). Moreover, many sub-national jurisdictions (e.g., states, cities) in these countries… Read more >
Download Policy Report The observed capital flows out of distressed countries into countries that are seen as “safe harbors” have in fact resulted in historically low yields of German and U.S. government bonds and helped the respective government budgeting. However, the current trading levels are unlikely to be sustainable and should not… Read more >
American elections are many things. One thing they rarely produce, however, is a deep and detailed discussion of policy proposals. This is particularly true for economic policy. In 2012, both presidential candidates have gone to great lengths to avoid discussing what they would actually do if elected because each is likely to… Read more >
“Risk” and “risk management” are not normally words applied to transatlantic trade. In general, observers assume trade is mutually beneficial, and that the benefits outweigh any costs. Of course, life is not so simple: even in mutually beneficial interactions, there are possible downside effects, or “risks,” where the amount of risk faced is a product of the hazard (downside effect) and the probability of that effect occurring. This essay focuses on two narrowly defined areas of government risk management in trade policy: the risks posed to consumers, the environment, and investors; and the risks posed to politicians and governments.
In recent years the shortcomings of both the market and of the state in providing decent housing for everyone has become particularly apparent. On the one hand housing, until recently a rather conservative inflation hedge, has increasingly become a speculative investment as new financial instruments emerged and ever more capital became available… Read more >
The euro crisis has come to a preliminary halt following the two massive liquidity injections by the European Central Bank (ECB) in December 2011 and February 2012. However, these ECB interventions and the double haircut for private bondholders of Greek debt have not brought sustained stability. Moreover, the new Fiscal Compact adopted in December 2011 by twenty-five European Union (EU) countries is not a convincing remedy for the problems of the euro area. Indeed, the euro summit diplomacy of 2011-2012 has largely been inconsistent and the institutional limbo of the Economic and Monetary Union calls for broader reforms.
China’s Importance for the Transatlantic Relationship How does the rise of China affect the transatlantic relationship? The United States and European Union are increasingly shifting their attention toward China as its economic growth and greater significance in international affairs make the country’s resurgence to the world stage a central feature of the… Read more >
The idea that the euro crisis is over is hopeful at best, naïve at worst. It is far from over. We are actually at the beginning of a dangerous new phase of political uncertainty across the eurozone that could massively impact its financial markets. On the other side of the Atlantic, continuing… Read more >
The Greek financial crisis seems finally to have been overcome, thanks to emergency European Union (EU) and International Monetary Fund (IMF) lending to the Greek government. Bondholders will have been punished, too, losing 75 percent of their capital in the transaction, and Greece itself will continue to be yoked to austerity budgets… Read more >
Same Economic Nightmares, Different Solutions: Transatlantic Approaches to International Macroeconomic Policymaking in the Face of the Crisis
Policy Report 48 argues that, in a climate of economic crisis and distress, transatlantic cooperation is still essential and must be expanded, despite current differences in policy.