More than two years into the European debt crisis, European leaders are still struggling to find solutions to the eurozone's economic deterioration and the growing debt burdens now engulfing financial markets. During a seminar on Thursday at AEI, panelists discussed how this crisis will affect U.S. growth prospects, electoral politics and foreign policy.
Bank of America’s Michael Levy emphasized that even in the rare instances European leaders have successfully addressed economic difficulties, they have nevertheless failed to properly manage market expectations. In contrast to most commentators, Frank Lavin of Export Now focused on the microeconomic problems that are inhibiting European growth and suggested that a U.S.-European Union (EU) free trade agreement might help resolve some of them.
The panelists then discussed the political ramifications of the euro crisis. Former ambassador to the EU Kristen Silverberg indicated that the region's economic problems are compromising Europe's role as one of the world's economic and political leaders. She emphasized that such abdication of leadership means that the U.S. will find it increasingly hard to lead global discussions on economic policy and human rights.
Finally, Timothy Adams of the Lindsay Group concluded by addressing the crisis's ramifications on U.S. domestic politics, discussing the enormous number of issues the upcoming U.S. president will have to work on as trouble persists in the eurozone.
After more than two years, the European debt crisis continues unabated. The European economy is once again in recession, Greece is on the cusp of exiting the euro and the crisis has now metastasized to Spain and Italy. These developments are now seriously undermining support for established political parties across much of Europe.
This seminar will focus on Europe’s economic and political outlook. It will consider the impact of developments in Europe on the U.S. economy and the appropriate U.S. policy response to the declining economic and political fortunes of its European partners. It will also consider the implications of the likelihood that US-EU relations could be in terminal decline as a result of European economic stagnation and shrinking European defense budgets.