Exchange Rate Policy and the Central and East European Financial Crisis

A prominent specialist on economic developments in the former Soviet Union and Central and Eastern European (CEE) countries examines the ways in which the global financial crisis of 2008-2010 has impacted the economies of the 10 new eastern member states of the European Union (CEE-10). The author assesses the multiple preconditions of the crisis (e.g., excessive current account deficits, large foreign debt, inadequate currency reserves, immense credit expansion, rising inflation and real estate prices) as well as the rapid financial adjustments that had to be undertaken to overcome it (e.g., current account rebalancing, reducing budget deficits, pension and fiscal reform). He devotes considerable attention to the key issue of how the differences in exchange rate policies in these countries affected their abilities to respond to the crisis and outlines measures that should be implemented to enhance the crisis management capability of non-eurozone states relying on currency boards or floating exchange rates.     

Between myth and reality: the euro crisis and the downfall of Silvio Berlusconi

In mid-November 2011, Prime Minister Silvio Berlusconi tendered his formal resignation to President Giorgio Napolitano. It was a humiliating ‘political exit’ for the controversial Italian leader who had been the dominant figure in Italian politics since the mid-1990s. With Italy in the throes of an unprecedented financial crisis, Berlusconi’s squabbling centre-right coalition had appeared increasingly incapable of dealing with the economic emergency engulfing the country. To restore credibility, Napolitano appointed Mario Monti who quickly put together an emergency government. Since then, the downfall of Italy’s longest-serving post-war prime minister has generated a good deal of controversy. Allegations that Berlusconi was pushed out of power by a cabal of domestic and international detractors have been rife both inside and outside Italy. But how plausible are these claims? Was Berlusconi brought down by a conspiracy orchestrated by Napolitano and instigated by Italy’s EU partners? This article will address these questions and, to do so, it will chart the dramatic events that led to his downfall and examine the international and domestic contexts in which these events took place.