Wednesday, May 19, 2010

Noyau dur de la droite post-Sarkozyenne?

Copé, Baroin, Le Maire, Jacob: read about the ambitious quadrumvirs in L'Express. Maybe Villepin isn't the one Sarko should be worrying about.

Sarko's "Brain" Joins Luc Besson

Emmanuelle Mignon, the brains behind Sarkozy's successful 2007 presidential campaign, has joined the production company of filmmaker Luc Besson.

Europe's Impact on the World

Another good post from James Hamilton, this one interpreting the global markets' reaction to the bad news from Europe. For Hamilton, the markets fear that European austerity will lead to falling commodity prices, falling global profits, and a new credit crunch, as banks with weakened balance sheets become reluctant to lend to private borrowers as in 2008.

This discussion by Paul De Grauwe is also interesting. In particular:

This has everything to do with the build-up of major imbalances involving the private sector. As argued earlier, some countries (not only in Southern Europe) allowed unsustainable real estate and consumption booms to emerge and to be financed by bank debt. Much of the financing of these unsustainable booms was done by the “virtuous” countries with current-account surpluses. These imbalances will occur even when all countries follow balanced budget rules. Thus it appears that the German government’s proposal to install balanced budget rules is a major cover-up of its own responsibility in contributing to the imbalance within the Eurozone.

In all fairness it should be added that there is an important new and positive element in the recent Commission’s proposals. This is that not only the government budget debts and deficits must be monitored, but also the private sector imbalances, in particular private debt levels. The issue here is how this monitoring can be made effective so as to avoid new crises. One can have doubts whether this can be achieved without a further transfer of sovereignty to European institutions.

The Underground Economy, Inflation, and the Euro

A very interesting argument by James Hamilton (h/t mg).