The real cause of today’s currency tensions lies not in the international monetary system, but in misguided domestic policies in the world’s major economies, which must undertake long overdue and largely internal reforms.
One way to prevent a long and painful decline in the region's economy would be for Germany to leave the eurozone, allowing indebted nations to devalue their currencies.
The current cycle of globalization could end in a painful period of debt adjustment and payment imbalances across the globe, with a likely slowdown of growth in China, a possible abandonment of the euro, and the risk of increasing U.S. protectionism.
A failure by Italy to finance its debt could cause a massive banking crisis that could spell the end of the euro, but Italy's problems are too severe to be remedied by any simple solutions.
Financial market turmoil and U.S. debt woes threaten to undermine the global recovery, but the biggest danger to the world economy comes from Europe and its worsening debt crisis.
Germany's comments about Chinese plans to export two power reactors to Pakistan do not help address international uncertainty over whether these exports would violate Nuclear Supplier Group guidelines.
If Europe wishes to prevent long-term high unemployment and stagnation, Spain must acknowledge its own debt problems and Germany needs to recognize its role in promoting regional and global imbalances.
The recent nuclear disaster in Japan has many people re-thinking the risks and benefits of nuclear energy. Germany took a bold stance two weeks ago when it pledged to shut down its nuclear reactors by 2022.
Global trade imbalances result from national policies that stimulate high or low saving or consumption rates, rather than from cultural predispositions to save or spend, making coordinated policy reform crucial to rectifying those imbalances.
While markets seem calm for now, the failure of the EU's recent summit, combined with Portugal’s recent request for aid and other political setbacks, leaves the euro area vulnerable to a relapse of crisis.