‘You Can’t Always Get What You Want’ sang the Rolling Stones in 1969. Jagger wasn’t singing about economic policy, but it’s a sentiment felt keenly by policy-makers the world over. They often face difficult choices between conflicting objectives.
Dani Rodrik, political economy professor at Harvard, has described an ‘inescapable trilemma’ at the heart of the world economy: we can have two of democracy, national sovereignty and open markets – but not all three fully and simultaneously.
As Europe’s elite desperately searches for a solution to stave off economic Armageddon, they face a similar trilemma. Technocrats’ assumption of power in Greece and Italy are cases in point. Continue reading
Yes, it can.
The real question is whether there is a coalition of the willing to move beyond rhetoric and do what it takes. A related question is whether those with the power to save the euro have the democratic mandate to do so.
Events this summer laid to rest any remaining doubts that the European monetary model is flawed, and ultimately unsustainable in its current form.
There is a broadening consensus forming around the need for deeper economic and fiscal integration to steady the ship. ‘Eurobonds’ have been the rallying call of the left as a means of effectively cross-subsidising weaker eurozone members, and there is certainly much of merit in this idea. ‘More Europe’ may be part of the answer. Continue reading