The Board of the International Monetary Fund yesterday approved a $16 billion loan facility for Ukraine, with $4.5 billion being drawn immediately.Â Perhaps the main news, at least for anyone not paying close attention to the details of the package as it evolved, is that any attempt at an exchange rate peg for Ukraine is dead.Â The IMF announcement makes repeated references to a “flexible exchange rate regime” and in particular —
Base money will be the near-term anchor for monetary policy until an inflation targeting regime can be implemented.
In other words, targets will be set for the growth of a narrow definition of the money supply and that will be the only explicit basis for interest rate adjustments.Â Among other things, the Fund doesn’t want the central bank to be blowing reserves on a futile defence of a particular level of the exchange rate.Â Â And money targets are back in style.Â It’s the 1970s all over again.
Typically, the discussions about Europeâ€™s future consist of the exchange of qualitative arguments, and are often only superficial. Problematic is that historical facts â€“ as far as they are known and properly understood â€“ are often selectively interpreted. Local interests of decision makers and their inability to understand what is at stake, make this often unavoidable. These biases often hinder decision-makers in Brussels and the capitals of the EUâ€™s member states. In order to speed up Europeâ€™s unification, these discussions should – if possible – be objectified. The unification of Europe is important â€“ as I will explain in this paper â€“ because Europe â€“ as the rest of the world – will unavoidably be confronted with global and regional problems that require intense cooperation, in order to avoid â€˜devastatingâ€™ consequences of these developments. In this paper I will show that complexity science can contribute to a more objective approach of these European challenges. I will show that the development of Europe towards a social cohesive â€˜unitâ€™ can be quantified: Europe is not a virtual reality or an artificial entity, but a hard â€˜factâ€™.
I invite our readers to go and have a look at this paper and to share their thoughts on it.
A lot of attention has been given here in Europe to the US presidential election 2008. According to some recent polls 78% of the French, 72% of the Germans and 68% of the Spanish would like to see Obama in office. Some European pro Obama “voters” see him as a welcome change from Bush, others are looking to America as an example of true democracy (how many black presidential candidates have we had in Europe?) and still others think he would usher in a new era of Transatlantic friendship and cooperation.
What do our readers think? First of all, who will be the next US president? What would it really mean for Europe to see Obama victorious? And what about McCain? Surely he must have something to offer us as well?
And, as a bonus question, are there countries in Europe that are ready for a black, or immigrant, PM or president?
Personally, I have no real answers to these questions. The only thing I am worried about is this: