A Proper Yield Curve for Greece to Kick-Start Financial Intermediation. ECMI Policy Brief No. 21, 10 December 2013

At present, the market is severely mispricing Greece’s sovereign risk relative to the country’s fundamentals. As a result of the mispricing, financial intermediation in Greece has become dysfunctional and the privatisation of state-owned assets has stalled. This mispricing is partially due to an illiquid and fragmented government yield curve. A well-designed public liability management exercise can lead to a more efficient pricing of Greece’s government bonds and thereby help restore stable and affordable financing for the country’s private sector, which is imperative in order to overcome Greece’s deep recession. This paper proposes three measures to enhance the functioning of the Greek government debt market: i) Greece should issue a new five-year bond, ii) it should consolidate the 20 individual series of government bonds into four liquid securities and iii) it should offer investors a swap of these newly created bonds into dollar-denominated securities. Each of these measures would be beneficial to the Hellenic Republic, since the government would be able to reduce the face value and the net present value of its debt stock. Furthermore, this exercise would facilitate the resumption of market access, which is a necessary condition for continuous multilateral disbursements to Greece

The European Community's Trade and Trade-Related Industrial Policies

This paper examines the objectives and instruments of trade policy in the European Community (EC) from 1987 until mid-1992. It reviews the Community’s institutional setting and policy environment as background to recent trends in EC trade policies and trading arrangements. A discussion of key issues and developments in the internal market program and its interactions with the Uruguay Round of multilateral trade negotiations is followed by a review of the main issues underlying trade disputes with third countries and trade-related industrial policies.

The global imbalances and the contradictions of US monetary hegemony

Over the last decade, the world economy has been characterised by escalating global current account imbalances between the United States (US) and East Asia in particular. This article argues that US monetary hegemony has been a necessary condition for the emergence of these imbalances. It is contended that the notion of structural power is indispensable to understanding the nature of US monetary hegemony and its relation to the imbalances. US monetary structural power has both induced East Asian states to increase their accumulation of dollar-denominated assets and allowed the US to decrease its savings. The article also shows that the mechanisms of US structural monetary power contain several contradictory dynamics that are able to undermine its own purpose, which is to avoid the burden of adjustment to balance-of-payments disequilibria. Journal of International Relations and Development (2010) 13, 105-135. doi:10.1057/jird.2009.3