Today Europe faces a great question indeed: whether a system of continual dilution of national sovereignty in order to create a pan-European government is more effective, stable, and just than one in which the continued sovereignty of numerous states allows them to determine their own destiny.

Central banks would be ill advised to look solely in the rearview mirror when assessing the inflationary outlook.

Three considerations make it likely that Greece, Ireland and Portugal will choose to default before the establishment of the European Stability Mechanism in 2013

Is a monetary union along the lines of Emu a good idea for countries that fail to meet the basic economic criteria of an optimum currency area?

One might well ask how much sense it makes for Europe to be considering tightening its macroeconomic policy stance.

The European fiscal stability pact ought to be redefined in terms of cyclically adjusted rather than actual budget targets.

One would hope that Jean-Claude Trichet would use his leadership of the European Central Bank to forge the pre-emptive type of monetary policy in order to avert the risks of deflation.

There has been much gnashing of teeth and rolling of eyes over eurozone leaders' repeated inability to solve their financial crisis once and for all. The rest of the world can best help, the reasoning goes, by shouting exhortations at Europe to just try harder. But what, exactly, are Europeans being urged to do?