The Missing EU Approach

Economy in Crisis
The German position (no new money, no ECB guarantees, and no euro bonds) would place the whole burden essentially on troubled countries to reform with very little additional help from eurozone partners.
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Are there signs of a comprehensive EU approach to the crisis?
Uri Dadush
No. The last EU summit on October 27 issued a communiqué that contained references to all the needed reforms—increased capacity of the European Financial Stability Facility (EFSF), bank recapitalization, and Greek debt restructuring. It also opened the door for longer-term reforms to the set up of the Economic and Monetary Union (EMU) that would require treaty changes.

However, the devil is in the details and there was no new money pledged for the EFSF, the bank recapitalization gave scope for banks to cut back instead of increase lending, and the Greek debt restructuring lacked crucial elements that still require negotiation. And the intention to reform EMU governance, requiring approval by parliaments across the eurozone, is not sufficiently specified or credible.

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The result is that very little remains of the October 27 package, which is one reason markets are so jittery, and so much has been placed in the lap of the European Central Bank (ECB). The German position (no new money, no ECB guarantees, and no euro bonds) would place the whole burden essentially on troubled countries to reform with very little additional help from eurozone partners. This is unrealistic.
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In Fact



of the Chinese general public

believe their country should share a global leadership role.


of Indian parliamentarians

have criminal cases pending against them.


charter schools in the United States

are linked to Turkey’s Gülen movement.


thousand tons of chemical weapons

are in North Korea’s possession.


of import tariffs

among Chile, Colombia, Mexico, and Peru have been eliminated.


trillion a year

is unaccounted for in official Chinese income statistics.


of GDP in oil-exporting Arab countries

comes from the mining sector.


of Europeans and Turks

are opposed to intervention in Syria.


of Russian exports to China

are hydrocarbons; machinery accounts for less than 1%.


of undiscovered oil

is in the Arctic.


U.S. government shutdowns

occurred between 1976 and 1996.


of Ukrainians

want an “international economic union” with the EU.


million electric bicycles

are used in Chinese cities.


of the world’s energy supply

is consumed by cities.


of today’s oils

require unconventional extraction techniques.


of the world's population

will reside in cities by 2050.


of Syria’s population

is expected to be displaced by the end of 2013.


of the U.S. economy

is consumed by healthcare.


of Brazilian protesters

learned about a massive rally via Facebook or Twitter.


million cases pending

in India’s judicial system.

1 in 3


now needs urgent assistance.


political parties

contested India’s last national elections.


of Egypt's labor force

works in the private sector.


of oil consumed in the United States

is for the transportation sector.


of Chechnya’s pre-1994 population

has fled to different parts of the world.


of oil consumed in China

was from foreign sources in 2012.


billion in goods and services

traded between the United States and China in 2012.


billion in foreign investment and oil revenue

have been lost by Iran because of its nuclear program.


increase in China’s GDP per capita

between 1972 and today.


billion have been spent

to complete the Bushehr nuclear reactor in Iran.


of Iran’s electricity needs

is all the Bushehr nuclear reactor provides.



were imprisoned in Turkey as of August 2012 according to the OSCE.

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