My Blogs and Op-Eds on EuroTragedy

April 29, 2020
Europe’s moment of truth

  1. All economic forecasts are optimistic, especially so in Europe, and especially so in Italy.
  2. Northern eurozone economies have the fiscal space for a sizeable stimulus, if just barely.
  3. Southern states—Italy and Spain—do not. They need, between them, at least, 100-150 billion euros in grants.
  4. For now, eurozone authorities are relying on the ECB to buy Italian/Spanish bonds
    1. Given Italy’s financing needs, by year end, the ECB will own over 40 percent of Italian bonds
    2. That is not stimulus, but will keep the balls in the air.
  5. What then if the Italian government cannot service its debts? That will be Europe’s moment of truth.


May 9, 2019
Greek bonds now yield less than Treasurys, and that’s as irrational as it was in 2007
The current exuberance is another instance of “déjà vu all over again.” We are amid the same euro-area irrationality as in July 2007, just before the start of the global financial crisis. The right question today is not why the eurozone will have a crisis. Rather, the right question is why won’t the eurozone have a crisis soon.

May 2, 2019
Europe cannot escape nationalism
Europe is trapped in “confederation,” which is an inherently unstable organizational form. Conflicts among member states, especially on monetary and fiscal policy as well as on foreign and immigration policy, are built in. The conflicts generate continued acrimony and quickly turn ugly. The nation-state is the only organizational form that has democratic accountability and legitimacy. Since a genuine European federation is impossible in any foreseeable future, European leaders must retrace their steps, diminish the reach of European institutions and strengthen a trustworthy nationalism inspired by social democratic principles.

February 1, 2019
The ECB has reached its political limits. Its consequences in eight charts

The political limits on the ECB’s actions make it the least effective of major central banks. Now, as the eurozone slips into recessionary conditions, the ECB will likely remain content with cheap talk. Any active stimulative measures will come late and in half-measures; they will, therefore, be of little value.

January 25, 2019
On the euro's 20th-anniversary, Draghi's tribute perpetuates long-refuted myths

Draghi gets so much of his economics and history wrong, it is scary to wonder what if he has his politics backwards.

January 14, 2019
The ECB's performace during the crisis: Lessons learned, with Milan Nedeljkovic

Central bank interventions are effective if they clearly signal a commitment to reinvigorating the economy and if they address the source rather than the symptom of financial stress. The ECB did not follow these principles, limiting its ability to improve financial market sentiment.

December 21, 2018
Britain has always felt awkward in the EU, so its exit is sure to be bitter and chaotic

A “no-deal” Brexit is highly likely, if not now, then soon enough. Nobler claims that European unity is necessary to preserve international peace and promote democracy have never moved the British. Europe still is an important trading partner but its continuing decline is reducing its transactional value. Britain’s long-held pride in parliamentary sovereignty will tilt the balance in favor of breaking firmly from the EU.

November 12, 2018
Fall of the eurozone's saviours: Why Emmanuel Macron is following Matteo Renzi's path to political oblivion

They inherited poorly performing economies and could not come up anything more imaginative than “labor market reforms.”

November 2, 2018
Angela Merkel's Tragedy

History placed Merkel amid raging storms. Merkel held the ship steady, but the storms continued to rage. Future chancellors could easily be swept away.

October 26, 2018
Italy's Budget Isn't as Crazy as It Seems

European officials should quickly reconsider their position. In this perilous global economic and political environment, failure to pursue a constructive discussion could precipitate economic and political disaster. On the other hand, changing the narrative to give legitimacy to a modest Italian stimulus will reassure investors and calm the markets.

October 16, 2018
The IMF is having a 'Groundhog Day' moment with its economic forecasts
The IMF keeps making the same mistakes with its economic forecasts.

September 21, 2018
The ECB's bond-buying program was a flop, and that's perilous for the eurozone

Economic growth is slowing, and the ECB has hit its political limits.

September 1, 2018
The IMF abetted the European Union's subversion of Greek democracy

The Greek story is not a story of unfortunate technocratic errors. Rather, it is about a colossal failure of accountability in international governance. The IMF, sitting at the pinnacle of international governance, committed the same errors again and again within the course of the long Greek operation even though the evidence was there to behold. For the delusional austerity required by the IMF and European lenders and for, in effect, creating a modern economic colonialism in Greece, it is only right that the IMF display leadership by being the first to forgive Greek debt.

August 18, 2018
Brexit is the consequence of low upward mobility
The referendum gave British citizens an opportunity to pointedly express their pessimism about the future in a way that is not possible in general elections.

August 16, 2018
Italy must wake up, and fix its banks
The storm will, as it always does, cause the maximum havoc where the structure is most fragile: the banking system.

July 31, 2018
Recovering human dignity: Richard Bernstein on the relevance of Hannah Arendt today
Arendt’s message of the importance of direct democracy as a counterweight to aloof and self-interest-ridden representative democracy surely deserves close attention.

June 28, 2018 
Brexit is a done deal—but the social and economic wounds that led to it have not been healed
Prime Minister Theresa May, at first, recognized the true message of the Brexit vote, but rather than move toward a Britain that “works for everyone,” she quickly got sucked into Brexit negotiations.

May 29, 2018
Bloomberg TV Interview

ECB's Draghi Ran Out of Ammunition for Italy, Academic Mody Says

May 29, 2018
Italy's President Just Undermined the Euro
Mattarella and his advisers are trapped in a European groupthink, which denies Italian citizens a voice in running their own country and rules out sensible compromises. In trying to preserve European orthodoxy, they may unleash destructive forces that they can't control.

April 25, 2018
The myth of Franco-German friendship
Since Emmanuel Macron’s election as French president in May 2017, hope has lingered that a mythical friendship between France and Germany will help complete the gaps in the euro area architecture. As this column discusses, however, history provides no basis for such an expectation. National interests, always central to the decision calculus, have diverged even further. French leaders have a pressing task at hand: they need to rejuvenate their own economy and build domestic social cohesion. This may take a generation or more.

March 21, 2018
The euro area's deepening political divide
Two recent European elections – in Germany on 24 September 2017 and Italy on 4 March 2018 – warn that the peoples of Europe are drifting apart. Much of the recent deepening of these divisions can be traced to Europe’s single currency, the euro. The political divide in Europe may now be hard to roll back absent a shift in focus to national priorities that pay urgent attention to the needs of those being left behind.