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 Malcolm H. Kerr Carnegie Middle East Center

Commentary
Diwan
On AI, Cairo Plays China and the U.S. Off Against Each Other
Huawei pushed hard to enter the Egyptian data centers market, until the Americans made a better offer.
Angie Omar
Commentary
Diwan
Less of America is More
Middle Eastern states should welcome an accelerated U.S. disengagement from their region.
Michael Young
Commentary
Diwan
A Strategic Disaster that Devalues U.S. Military Prowess
In an interview, former ambassador Charles Freeman assesses the Trump administration’s war against Iran.
Michael Young
Commentary
Diwan
In the Trump Gaza Plan, Diplomatic Failure is Success
By failing to address Palestinian representation, the current process is bound to lead to just another temporary arrangement.
Nathan J. Brown
Paper
Egypt’s Military Landlord Economy and its Limitations
The armed forces champion a form of capitalism that is generating revenue, but its reliance on rent faces diminishing returns, leaving the country with massive sunk costs and deferred returns, deepening dependency on external borrowing.
Yezid Sayigh

More Work from Malcolm H. Kerr Carnegie Middle East Center

Commentary

Diwan

On AI, Cairo Plays China and the U.S. Off Against Each Other

Huawei pushed hard to enter the Egyptian data centers market, until the Americans made a better offer.

Angie Omar

Commentary

Diwan

Less of America is More

Middle Eastern states should welcome an accelerated U.S. disengagement from their region.

Michael Young

Commentary

Diwan

A Strategic Disaster that Devalues U.S. Military Prowess

In an interview, former ambassador Charles Freeman assesses the Trump administration’s war against Iran.

Michael Young

Commentary

Diwan

In the Trump Gaza Plan, Diplomatic Failure is Success

By failing to address Palestinian representation, the current process is bound to lead to just another temporary arrangement.

Nathan J. Brown

Paper

Egypt’s Military Landlord Economy and its Limitations

The armed forces champion a form of capitalism that is generating revenue, but its reliance on rent faces diminishing returns, leaving the country with massive sunk costs and deferred returns, deepening dependency on external borrowing.

Yezid Sayigh