How the U.S. Will Pay for the Euro Crisis

{
  "authors": [
    "Uri Dadush",
    "William Shaw"
  ],
  "type": "legacyinthemedia",
  "centerAffiliationAll": "",
  "centers": [
    "Carnegie Endowment for International Peace",
    "Carnegie Europe",
    "Carnegie Russia Eurasia Center"
  ],
  "collections": [
    "Transatlantic Cooperation"
  ],
  "englishNewsletterAll": "",
  "nonEnglishNewsletterAll": "",
  "primaryCenter": "Carnegie Endowment for International Peace",
  "programAffiliation": "",
  "programs": [],
  "projects": [],
  "regions": [
    "North America",
    "United States",
    "Western Europe",
    "France",
    "Germany",
    "Europe",
    "Eastern Europe"
  ],
  "topics": [
    "Economy",
    "EU"
  ]
}

In The Media

How the U.S. Will Pay for the Euro Crisis

The euro crisis has grown too big for Europeans to handle alone. The United States must act to help save the euro—or risk paying a much bigger price if it collapses.

By Uri Dadush and William Shaw

Published on Dec 7, 2011

Source: National Interest

How the U.S. Will Pay for the Euro CrisisAs Secretary Geithner travels to Europe again this week to express America’s “deep concern” about the escalating euro crisis, his counterparts will listen politely—but here is what they will really be thinking: “We know we have a big crisis on our hands and that we have to act decisively, thank you—but what can you do to help? Yes, we appreciate the Fed’s participation in enhanced swap lines, but we all know this is just a palliative.”

His fellow finance ministers will grow impatient. “We understand that you have a fiscal mess, but we don’t have a lot of time right now. We really need to prepare for the meetings with the Chinese, Brazilian and Mexican delegations. After all, as you and your president keep repeating, this is Europe’s crisis to deal with.”

This is more than ironic. It is unreal, tragic in fact, because everyone around the conference table will know that a collapse of the euro would not only be a calamity for Europe but also a disaster for the United States.

This article was originally published by the National Interest. Click here to continue reading.

About the Authors

Uri Dadush

Former Senior Associate, International Economics Program

Dadush was a senior associate at the Carnegie Endowment for International Peace. He focuses on trends in the global economy and is currently tracking developments in the eurozone crisis.

William Shaw

Former Visiting Scholar, International Economics Program

Shaw was a visiting scholar in Carnegie’s International Economics Program. He is the co-author of Juggernaut: How Emerging Markets Are Reshaping Globalization.

Economy EU North America United States Western Europe France Germany Europe Eastern Europe

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

More Work from Carnegie China

Commentary
When It Comes to Superpower Geopolitics, Malaysia Is Staunchly Nonpartisan
For Malaysia, the conjunction that works is “and” not “or” when it comes to the United States and China.
Elina Noor
Commentary
Today’s Rare Earths Conflict Echoes the 1973 Oil Crisis — But It’s Not the Same
Regulation, not embargo, allows Beijing to shape how other countries and firms adapt to its terms.
Alvin Camba
Commentary
How China’s Growth Model Determines Its Climate Performance
Rather than climate ambitions, compatibility with investment and exports is why China supports both green and high-emission technologies.
Mathias Larsen
Commentary
What’s New about Involution?
“Involution” is a new word for an old problem, and without a very different set of policies to rein it in, it is a problem that is likely to persist.
Michael Pettis
Commentary
The Chinese Investment Riddle: What Cities Reveal
While China's investment story seems contradictory from the outside, the real answers to Beijing's high-quality growth ambitions are hiding in plain sight across the nation's cities.
Yuhan Zhang

More Work from Carnegie China

Commentary

When It Comes to Superpower Geopolitics, Malaysia Is Staunchly Nonpartisan

For Malaysia, the conjunction that works is “and” not “or” when it comes to the United States and China.

Elina Noor

Commentary

Today’s Rare Earths Conflict Echoes the 1973 Oil Crisis — But It’s Not the Same

Regulation, not embargo, allows Beijing to shape how other countries and firms adapt to its terms.

Alvin Camba

Commentary

How China’s Growth Model Determines Its Climate Performance

Rather than climate ambitions, compatibility with investment and exports is why China supports both green and high-emission technologies.

Mathias Larsen

Commentary

What’s New about Involution?

“Involution” is a new word for an old problem, and without a very different set of policies to rein it in, it is a problem that is likely to persist.

Michael Pettis

Commentary

The Chinese Investment Riddle: What Cities Reveal

While China's investment story seems contradictory from the outside, the real answers to Beijing's high-quality growth ambitions are hiding in plain sight across the nation's cities.

Yuhan Zhang