Europe after the Greek election: Difficult decisions for a divided Europe

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Post Event Summary
The recent Greek election underscored the continued deterioration of the Greek economy, which has contracted by 16 percent and Greece now faces unemployment across a quarter of its population. At an AEI event on Tuesday, a panel of experts discussed the implications of Greece's election for the survival of the eurozone and the impact on the U.S.

Bruce Stokes of the Pew Global Attitudes Project addressed the public perception problems facing countries like Greece and Italy —  issues which are only compounding those countries' debt problems —but also emphasized that some European leaders such as Germany’s Angela Merkel are capable of exploring creative solutions.  Alessandro Leipold of the Lisbon Council then discussed how long-held tenets of European Union integration were falling apart, stressing how these tenets were testing the limits of Europe's political and financial frameworks. 

Philip Suttle of the Institute of International Finance reoriented the discussion away from Greece and toward Spain's financial sector issues, accentuating how the growing financial problems in Europe have transformed into pressing political and social dilemmas.  Finally, John Makin of AEI summarized the panel's conclusions by describing how Europe has passed an inflection point that makes reactive policy counterproductive.  In order to forestall future crisis and restart growth, he said, leaders must make proactive decisions that preempt problems.

Event Description
Greece’s second parliamentary election on June 17 — which will follow an earlier, failed attempt at creating a national government — could have critical bearing on the euro’s survival. Greece’s political prospects and position within the eurozone in the aftermath of the upcoming election could result in the country leaving the euro.

A panel of economic and financial experts will assess the likelihood of a Greek exit from the euro and will discuss the consequences of any such exit for the survival of the zone. The panel will also consider the impact of an intensified European debt crisis on the U.S. economy and the upcoming U.S. presidential election.

Full video will be posted within 24 hours.

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About the Author

 

John H.
Makin
  • John H. Makin is a resident scholar at the American Enterprise Institute (AEI) where he studies the US economy, monetary policy, financial markets, corporate taxation and banking. He also studies and writes frequently about Japanese, Chinese and European economic issues.

    Makin has served as a consultant to the US Treasury Department, the Congressional Budget Office, and the International Monetary Fund. He spent twenty years on Wall Street as the chief economist, and later as a principal of Caxton Associates a trading and investment firm. Earlier, Makin taught economics at various universities including the University of Virginia. He has also been a scholar at the Bank of Japan, the Federal Reserve Bank of San Francisco, the Federal Bank of Chicago, and the National Bureau of Economic Research. A prolific writer, Makin is the author of numerous books and articles on financial, monetary, and fiscal policy. Makin also writes AEI's monthly Economic Outlook which pairs insightful research with current economic topics.

    Makin received his doctorate and master’s degree in economics from University of Chicago, and bachelor’s degree in economics from Trinity College.


    Follow John Makin on Twitter.

  • Phone: 202-862-5828
    Email: jmakin@aei.org
  • Assistant Info

    Name: Brittany Pineros
    Phone: 202-862-5926
    Email: brittany.pineros@aei.org

 

Desmond
Lachman
  • Desmond Lachman joined AEI after serving as a managing director and chief emerging market economic strategist at Salomon Smith Barney. He previously served as deputy director in the International Monetary Fund's (IMF) Policy Development and Review Department and was active in staff formulation of IMF policies. Mr. Lachman has written extensively on the global economic crisis, the U.S. housing market bust, the U.S. dollar, and the strains in the euro area. At AEI, Mr. Lachman is focused on the global macroeconomy, global currency issues, and the multilateral lending agencies.
  • Phone: 202-862-5844
    Email: dlachman@aei.org
  • Assistant Info

    Name: Emma Bennett
    Phone: 202.862.5862
    Email: emma.bennett@aei.org

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