A substantial gap has now opened up between the U.S. and the EU on fiscal policy. Spain’s parliament Thursday passed by one vote an $18 billion austerity package that included a 5% pay cut for civil servants, while on the same day U.S. Treasury Secretary Tim Geithner continued to lecture the Europeans on the need […]

The turbulence in financial markets in the last couple of weeks has been ascribed by reporters to doubts about the long-term stability of the euro, and of southern European finances. This is over-optimistic. Whether or not the current market downdraft proves temporary, monetary and fiscal policies in the United States and worldwide have been excessively […]

The 750 billion euros ($950 billion) bailout for Greece and other wobbly eurozone economies was greeted by markets with less enthusiasm than expected this week. Politicians should be worried: we may be reaching the limits of their bailout capability. When that happens, it will be healthy, but the panic level will be intense.

The Greek crisis and the EU’s confused response to it have shown that Europe, or at least the Eurozone is deep into an existential struggle between three economic models: the free market liberalism of Margaret Thatcher (1979-90), the spendthrift socialism exemplified in its most extreme form by Greece’s 1980s prime minister Andreas Papandreou (1981-89, 1993-96) […]

From the economic point of view, the 2010 British General Election due on May 6 is one that no sane person would want to win. By far the country’s largest industry, financial services, is in deep trouble, facing concerted worldwide attack by enraged governments and citizenry. The budget deficit is at 12.8% of Gross Domestic […]