If you have any spare cash laying around and need of a vacation, Chevy Chase would probably recommend that you go to Europe. The euro currency has dipped to a nine-year low against the dollar. That is good for tourists going to Europe, but is not good for European economic prospects in the long term. Why?
If the Republican Party takes full control of the U.S. Congress in the midterm election, policy gridlock is likely to worsen, risking a rerun of the damaging fiscal battles that led last year to a government shutdown and almost to a technical debt default. More broadly, the gridlock will prevent the passage of important structural reforms that the U.S. needs to boost growth.
Underlying and reinforcing fears is the knowledge within the financial community that sovereigns expended so much of their capital in coping with the last worldwide economic crisis, there is little left for policymakers to react with when the next big financial and economic tsunami strikes the global economy.
Germany has the most unequal distribution of wealth in the eurozone. In this sense, Germany faces the same challenge as China: a high-export and saving economy which needs to rebalance through policies that create a greater flow of wealth to households, thus spurring greater consumption. This, in turn, can create demand for imports from Germany's European neighbors.
All great reforms must first mature. To be successful, they must be fully understood by society. This process requires time and a lot of explanations. However, the need to obtain the consent of the people must not deter the leaders from their mission, even if it makes them unpopular. As it is written in the American Federalist Papers: "When occasions present themselves, in which the interests of the people are at variance with their inclinations, it is the duty of the persons whom they have appointed to be the guardians of those interests, to withstand the temporary delusion, in order to give them time and opportunity for more cool and sedate reflection (Federalist Papers Nr. 71). What is called "populism" nowadays is not really tantamount to defending the real interests of the people. Rather, it is a political ruse, which consists of using ultra-simplified language that is easily understood by the people, playing on their sense of fear, to conquer power.