Greece's Debt Crisis: A National Tragedy of European Proportions. Nikolaos Zahariadis, Mediterranean Quarterly, Fall 2010, pp. 38-54. On 3 September 2009, Greek prime minister Constantine Karamanlis called for a snap election halfway into his second term. Despite widespread outcry from his own party and opinion polls that predicted a loss, he insisted this was best for the country. It was certainly best for him, for the victorious socialists under George Papandreou announced three weeks after their victory on 4 October 2009 that the government’s budget deficit would hit 12.5 percent — twice as high as previous estimates. Not long thereafter, the country teetered on the brink of bankruptcy, crushed by high borrowing costs. Although initially remote, the prospect of national default became the only way out of the crisis. What happened? Is it the result of national failure or the outcome of a flawed European Monetary Union (EMU)? READ MORE

The Rise of the New Global Elite. Chrystia Freeland, The Atlantic, Jan/Feb 2011, var. pages. "The changing economy has created a new class of business megastars. Super-rich and often self-made, they tend to be ambivalent about the rest of us, and they increasingly form a nation unto themselves." READ MORE

Making Transatlantic Economic Relations Work. Henning Meyer and Stephen Barber, Global Policy, January 2011, pp. 106-111. Relative to security issues, Transatlantic Economic Relations (TER) has been neglected by politicians and underexplored by academics and yet is of increasing importance. This article argues that TER is characterised by the mutual dysfunctionality of the political agenda and its institutional structure. The traditional narrow agenda, which has focused almost exclusively on reducing non-tariff trade barriers, is a principal reason for this. This article uses the case of industrial and labour relations to demonstrate that greater engagement with major stakeholders and broadening the political agenda are key to breaking the deadlock. The article also argues for institutional innovations that could in principle be transferred to other neglected policy areas of TER. READ MORE

Out of Balance: The Fragile World Economy. Stephen Fidler and Alexander Nicoll, Survival, December-Janaury 2010, pp. 89-106. The world's economic system is in transition as governments try to manage the tensions generated by the financial crisis that began in September 2008. While the crisis has had financial, economic and political consequences, a further set of effects could be termed geopolitical and geo-economic: broadly, the impact on the way that countries relate to each other politically and economically. It had been clear well before the crisis that emerging economies, and particularly China, were playing a more important role in world affairs. However, the crisis accelerated that process and helped create a more fluid situation in international affairs, in which the instincts of governments are more towards national responses, and established global institutions and regional organisations are no longer seen as the automatic port in a storm, or as the only route to international solutions. Two years after the 2008 crisis, the state of apparent flux in international economic relations could be but an interlude before harsher realities once again force further international coordination and create pressures for a new global compact to be forged. READ MORE

How Do Rising Powers Rise? Andrew F. Hart and Bruce D. Jones, Survival, December-January 2010, pp. 63-88. The idea that a single group of emerging powers, principally the BRIC states, are reshaping global politics is now prevalent. However, the basis of their newfound power is not well understood. Their influence is primarily a function of their regional clout, and their outsized weight in multilateral institutions; but also because the goals of US policy frequently play to emerging-power advantages. Investigation of how the emerging powers are choosing to wield this influence in the economic, financial, and security realms finds that, although they have some blocking power, the most prevalent strategies thus far have been to bargain hard to protect their own interests and national space, and to balance the growing influence of their BRIC counterparts. READ MORE

International financial regulation after the crisis. Barry Eichengreen, Daedalus, Fall 2010, var. pp. [...] cooperation could create a viable alternative to the uncontrolled bankruptcy of troubled financial institutions on the one hand and emergency rescues on the other. To the extent that a rescue is financed by taxpayer money, present or future, it is rightly seen as unfair. [...] because banks know they will receive assistance in the event that the bets they make go bad, they have an incentive to place bigger and riskier bets. READ MORE 

How to Reform the IMF. Randall W. Stone, Current History, November 2010, pp. 342-348. International governance—the broad set of rules, international organizations, and informal understandings that facilitate cooperation among states in the contemporary world—has reached a decisive moment. The world’s essentially liberal international institutions, participatory but US-led, expanded rapidly after the end of the cold war. Now they face new challenges, as they will be forced to adapt to dramatic economic growth in emerging markets in Asia and Latin America. Under particularly heavy challenge is the role that the United States plays in international financial institutions, most notably the International Monetary Fund (IMF) and the World Bank, where America has traditionally exerted a degree of informal influence out of proportion to its formal voting rights. READ MORE 

The Global Budget Race. Douglas J. Besharov, Douglas M. Call, The Wilson Quarterly, Autumn 2010, var. pp. Like many other countries, the United States is buried under a pile of mounting debt. Tunneling out will mean making some tough choices that can’t be put off much longer. News stories regularly remind us that most national governments in the developed world are essentially insolvent. The United States has one of the worst balance sheets, with a projected debt in 2050 of $123 trillion. Of course, what can’t happen won’t happen, as economist Herbert Stein taught us. Long before that point, most countries will get their finances in order—either after a careful analysis of the alternatives or because they will be unable to borrow money and will be forced to take corrective action. How capably they respond will determine their future economic competitiveness and their standard of living. Those countries that do a better job of bringing revenues and spending into balance—in a way that fosters a healthy and productive citizenry—will have a competitive advantage in the global economy, and they may be able to avoid economic decline. READ MORE