A few days ago, Edward explored the gap between the Eurozone’s monetary and political architecture (and the lack of the latter) as a potential risk to the Eurozone itself.   But in what looks likely to be a weekend of rapidly changing events, here is a new wrinkle: Nicolas Sarkozy has convened an emergency heads of [...]

Asset freezes.  Threats of litigation.  Expressions of mystification about the intentions of a foreign government.  The latest round with another axis of evil country?  No: the current state of relations between the UK and Iceland.  As we were saying before we were so rudely interrupted, Iceland is leading the way from a banking crisis to [...]

With European countries in a rush to take banking sector liabilities onto the public balance sheet, they might want to take a look at where that route goes, in extremis: Iceland, as a banking crisis becomes a full blown macroeconomic crisis.  Today has seen a bewildering series of events, even against the backdrop of a [...]

Gordon Brown does a nice job of grabbing the headlines with Peter Mandelson’s return to the Cabinet as Business Secretary.  It’s hard to divine what this means for the European Commission.  Catherine Ashton will take his place as Trade Commissioner and there’s nothing in her background that indicates that she’s as ready as Mandy was [...]

One of the diagnoses of why the Great Depression was so bad is that countries engaged in “competitive devaluation” — weakening their exchange rates to make exports cheaper, but when all try to do this, no one gains, and confidence runs out.  One wonders today if Ireland has created a new version of this risk [...]

When the dust settles on whatever form of banking bailout the US Congress eventually approves, attention will turn to reassessing the philosophy that got the US to this point.  But perhaps Europe will have to revisit some conventional wisdom too.  Consider the case of Benelux financial services giant Fortis, which if this evening’s reports are [...]

The IMF has just released its latest assessment of Hungary (news release, detailed report).  It’s interesting and sobering reading — this is a country where the budget deficit nearly hit 10% of GDP last year and which is still spending 4% of GDP a year on public debt service.  In Ireland we know how this [...]

That’s what Paul Adamson argues for in today’s Financial Times.  The basis of the argument is that we should acknowledge that the commissioners are not a dispassionate executive branch of the European Union, but people who bring their country interests to their respective portfolios — so why not make this explicit and let the commissioners [...]

In an action that may remind the White House why their ally can sometimes be exasperating even to them, Georgian President Mikheil Saakashvili apparently pre-empted an announcement that George Bush will attend  a special “Summit of Friends of Georgia” in late October - which would be within a fortnight of the US elections in November.  White [...]

Russia-Georgia is likely to be one of the main foreign policy issues “debated” at the Republican National Convention in Minnesota.  Dick Cheney is in Baku this evening and here is a statement from George Bush announcing a package of aid measures.  It includes the assertion –
The people of Georgia withstood the assault from the Russian [...]