Project Syndicate

Project Syndicate (Wikipedia) is an international not for profit newspaper syndicate and association of newspapers. It distributes commentaries and analysis (“opinion pieces”) by experts, activists, Nobel laureates, statesmen, economists, political thinkers, business leaders and academics to its member publications, and encourages networking among its members. It is based in Prague, Czech Republic. It currently consists of approximately 439 newspapers in 150 countries, with a total circulation of nearly 50 million copies, making it the world’s largest commentary focused syndicate. Edin Mujagic and myself are a member of Project Syndicate’s Economists’ Club.

Europe’s Crisis Goes to Court
03-09-2012 (By Sylvester Eijffinger and Edin Mujagic)

Throughout Europe and beyond, economists are debating potential solutions to the eurozone’s sovereign-debt crisis. But these discussions often neglect, or at least downplay, one crucial element of any resolution: the German Constitutional Court (Bundesverfassungsgericht) in Karlsruhe, which is responsible for determining whether measures taken by Europe’s leaders are legal by German standards. (Project Syndicate website). On September 12, the court will determine whether the European Stability Mechanism (ESM), Europe’s permanent emergency fund, complies with Germany’s constitution. Although German policymakers backed the ESM in June, ratification is on hold until the court’s ruling (more).

Exit and Enforcement in the Eurozone
16-07-2012 (By Sylvester Eijffinger and Edin Mujagic).

In 1992, the Maastricht Treaty set rules for European countries’ public finances that would facilitate economic integration. The Stability and Growth Pact (SGP), agreed in 1997, extended these rules to enable the euro’s creation and ensure that the new currency became an established part of the global monetary firmament. But the rulebook was left unfinished, with dire consequences: if the euro survives the current crisis, it is destined to remain unstable, except in periods of exceptionally high economic growth – that is, unless Europe’s leaders finish writing the rules. Among the SGP’s criteria for adopting the common currency was an annual budget deficit of less than 3% of GDP. But some countries qualified only through temporary measures – or outright cheating (more).

01-03-2011 The West’s Punch Bowl Monetary Policy
Sylvester Eijffinger and Edin Mujagic

Abstract
There are times for thinking and acting outside the box. And then there are times to return to normality. The West’s major central banks – the Bank of England, the European Central Bank, and the United States Federal Reserve – should take this to heart. As former Fed Chairman William McChesney Martin put it: “It’s the task of the central bank to take the punch bowl away when the party is still going.” Recently, however, the Fed decided not only to keep the punch bowl in place, but to refill it.

17-01-2011 Who’s next at the ECB helm ?
Sylvester Eijffinger and Edin Mujagic

Abstract
Two years ago, the leaders of the world’s central banks were considered heroes for their efforts in preventing financial crisis from turning into Great Depression II. Today, however, central banks are being sharply criticized, and their independence is coming under severe pressure in many countries, particularly in the eurozone, as Mario Draghi, the head of the Bank of Italy, recently pointed out. The type of person at the helm of any central bank is always important – but now more than ever, because financial crises always threaten central banks’ independence.

31-05-2010 Our Deep Debt Future
Sylvester Eijffinger and Edin Mujagic

Abstract
The 1980’s was the decade in which high inflation was supposedly consigned to the dustbin of history, while the 1990’s were all about the so-called new economy. Governor Mervyn King of the Bank of England once called it the NICE decade (No Inflation, Continuing Expansion) – a time when the economy reached the promised land of high growth and price stability. The following decade turned out to be one of, first, the war on terror and, later, the worst financial and economic crisis in almost a century – a time when virtually every developed economy experienced a long and deep recession.

08-02-2010 The Euro’s Final Countdown
Sylvester Eijffinger and Edin Mujagic

Abstract
The introduction of the euro in 1999, it was claimed, would narrow the economic differences between the member countries of the monetary union. Unemployment rates would converge, as would other important macroeconomic variables, such as unit labor costs, productivity, and fiscal deficits and government debt. Ultimately, the differences in wealth, measured in terms of income per capita, would diminish as well. After the common currency’s first decade, however, increased divergence, rather than rapid convergence, has become the norm within the euro area, and tensions can be expected to increase further.