by Dr. Kurt Hübner

The German center-right coalition sticks to its tune even when the rest of the orchestra builds toward a shrill crescendo. Jointly with Jens Weidmann, head of the Deutsche Bundesbank and her economic advisor, Chancellor Merkel steadfastly opposes all versions of Eurobonds and any decisive bond purchase program for the ECB. Weidmann may have gone furthest by arguing that both tools are in violation of existing European and German law. Yet saying Merkel would have a more nuanced position would miss the point. Both are not even pretending to be subtle. A look at two scenarios is needed in order to understand this hardliner stance. The first scenario postulates that the crisis mechanisms already in place, or are in the making, and the planned change in policy rules that would come with changes to the Treaty are sufficient to deal with an ever-escalating process. Moreover, the tune goes that those mechanisms are strong enough to handle a Greek default and can stop any contagion. Unfortunately, the probability of this scenario diminishes on a daily base. Internal devaluation kick-starts vicious circles where negative growth drives debt and deficit ratios up and thus generates increases in yield. Higher yields demand, in austerity logic, more cuts and cost reductions that result in an ever-lower growth dynamic and eventually in further increases of yield. Sooner than later this circle runs into economic and political walls. 

Dr. Hübner was recently interviewed for a piece in Brazil's leading newspaper, Correio Brasiliense. The article was titled Tensão no continente and discussed the effects of the European sovereign debt crisis on economies in the Americas. Definitely worth reading if you speak Portuguese.  

The EU Centre in Singapore has published a policy brief by IES Director Kurt Hübner titled 'The Remaking of the Euro: Changes to the Economic Mode of Governance of the Eurozone'.

This policy brief discusses the reasons behind the sovereign debt crisis and the policies that will impact the future of the eurozone. It also looks at how the financial architecture of the eurozone is being rebuilt so that the eurozone can return to seeing economic growth.

(via EU Centre in Singapore)

Negotiations to seal a Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU are expected to wrap up this year. The latest round of talks take place in Ottawa next week with some tough areas still to be negotiated, including the thorny issue of public procurement. With the federal election campaign in full swing Prime Minister Stephen Harper says the talks are very much on track. A number of Canadian groups are campaigning hard against a CETA. On the other side of the Atlantic the European Parliament, which now has the power to veto any deal, is raising questions about the environmental impact of Alberta's oil sands and asking whether the EU wants to import oil from that province. The CETA is far from a done deal.

Scholars from the Canada-Europe Transatlantic Dialogue are on hand to comment on the issues behind the talks.
Experts available:

Kurt Hübner is Director, Chair for German and European Studies and Jean Monnet Chair for European Integration and Global Political Economy at the Institute for European Studies, University of British Columbia. He is editor of the recently released book: Europe, Canada and the Comprehensive Economic and Trade Agreement; Routledge. Well-respected scholars from across Canada and Europe analyze the undercurrents of CETA as well as introducing the key areas which such a deal would encompass. The book provides analytical insights of relevance to policy-makers and students and scholars alike. Denis Saint-Martin's work focuses on public policy, federalism and intergovernmental affairs in Canada and in the EU. In the context of the CETA negotiations, he is interested in the governance arrangements related to global trade agreements. Amy Verdun is Jean Monnet Chair ad Personam and Professor and Chair of the Department of Political Science at the University of Victoria. She is an expert in European Union Politics, and the relations between Canada and the EU.

(via EUCAnet