Sean and I have an article on green growth at Vox. It builds on a paper recently published in the Energy Journal. Research funded by the EPA.
Thomas Klau has written an LBS-level piece in today’s Irish Times. The substance of his argument is that Ireland and other nations must accept a further transfer of sovereignty to Europe to save the Eurozone. From the piece:
Ireland’s citizens have made a name for themselves in Europe for their particular reluctance to hand more powers to Brussels. But the disintegration of the euro zone is inevitable unless more powers are given to its joint political authorities – and Ireland should have a strong interest in such powers being exercised through means other than a Franco-German directoire.
It is now apparent that the notorious
Irish insistence on each member state retaining its own right to a European commissioner has backfired very badly: the ensuing expansion of the number of commissioners has been a main factor behind the political decline of the institution, now marginalised by a European Council largely run by Germany and France.
Here is a lesson to be learned: Irish obstreperousness gave Ireland a splendid feeling of leverage for a few months – and has lethally weakened its best ally in Brussels.
There are quite a few problems with Mr Klau’s argument, but I’ll leave our commenters to point them out.
I recently wrote that Dublin does not use MapAlerter, a nifty internet service that allows county councils to alert people in particular areas by SMS, Email, Twitter, RSS. I was wrong. Dublin does use MapAlerter. It even issued a flood warning on Tuesday, October 25, 2011.
Gavyn Davies has a useful piece in today’s FT highlighting the potential inter-country distributional consequences of ECB actions in support of particular countries (see here). These consequences are critical to understanding the economics and politics of ECB interventions. A few key paragraphs:
The implication of this analysis is that the ECB has more than enough “capital” to underwrite the peripheral bond markets, without this being inflationary in the long run. In a single nation state, it would probably prove irresistible to bring forward some of this capital from the future into the present, and then use it to purchase government bonds to resolve the crisis. In countries like the US and the UK, the national treasury could, in extremis, simply command the central bank to do this, which is why independent nation states typically cannot be forced to default on their domestic currency debt (although they might choose to do so by inflation).
The situation of the ECB is different for the now-familiar reason that the institution is the central bank of many nation states, which care very much about the distribution of income and wealth between themselves. The use of the central bank’s non-inflationary capital does not get round this fundamental issue. Since the ECB is owned by all of its members in proportion to their share of eurozone GDP, the future seigniorage of the ECB is similarly owned by all of its members.
If the ECB board chooses to use its notional capital today by buying Italian bonds at subsidised rates, it is in effect triggering a transfer of resources to Italy, away from other members, most notably Germany. This could emerge in the form of ECB losses which might need to be to be recapitalised by member states after an Italian default. Or it might emerge as a reduced flow of future profits from the ECB to nations like Germany. In any event, there would be an implied transfer of resources from Germany to Italy, which is precisely what the German government has opposed implacably.
This NYT article addresses why European banks ended up holding so much risky sovereign debt – you can read it here.