Board of Governors of the Federal Reserve System
. . . there are significant downside risks to the economic outlook, including strains in global financial markets.
- Roger Altman, “America and Europe are on the verge of disastrous recession“
Overall, we could be in for a repeat of the experience of 1937, when America fell back into recession after three years of recovery from the Great Depression.
- Charles Dumas, “Spain, not Greece, may be the biggest eurozone threat“
The chances are high of a Spanish asset price slide and banking crisis, with stagnation (at best) or depression, if it sticks in the euro. For Portugal they are close to 100 per cent.
New York Times
- Floyd Norris, “Constraints on central banks leave markets adrift“
. . . the slogan for markets as the International Monetary Fund and World Bank meet this week in Washington could well be, “You’re on your own. Don’t count on anybody to bail you out.”
- Romain Leick, “The weakness behind Sarkozy’s European vision“
Thinking about Germany has become a French obsession, because France is worried. It is wondering whether Germany will remain true to the European Union and the euro . Will Germany choose solidarity over discipline? Will Germany ultimately accept the measure that prevailing Parisian opinion considers inevitable and agree to collectivize national debt within the euro zone?
- David Böcking, “Belligerent Berlusconi Toys With Europe“
Italian Prime Minister Silvio Berlusconi refuses to recognize that his country is in trouble. Vast debt, sluggish growth and rising borrowing rates indicate that Rome too may be infected by the euro-zone debt crisis. But the EU has few tools at its disposal to get Italy to take action.
- The World from Berlin, “Italy’s chief problem is its own government“
Prime Minister Silvio Berlusconi blasted Standard and Poor’s on Tuesday, saying its downgrade of Italian debt was politically motivated. German commentators tend to agree, but they say the real problem is Berlusconi himself.
- Michael Bordo, “A fiscal union for the euro: some lessons from history“
The single European currency is the first of its kind – a union where monetary policy is decided centrally and fiscal policy decided nationally – something that many argue is the root cause of its troubles. This column looks to history to find examples of federal states with a common currency but without the frailties currently being exposed in the Eurozone. The main lesson: No bailouts.