The Europe Center is jointly housed in the Freeman Spogli Institute for International Studies and the Stanford Global Studies Division.
FSI's research on the origins, character and consequences of government institutions spans continents and academic disciplines. The institute’s senior fellows and their colleagues across Stanford examine the principles of public administration and implementation. Their work focuses on how maternal health care is delivered in rural China, how public action can create wealth and eliminate poverty, and why U.S. immigration reform keeps stalling.
FSI’s work includes comparative studies of how institutions help resolve policy and societal issues. Scholars aim to clearly define and make sense of the rule of law, examining how it is invoked and applied around the world.
FSI researchers also investigate government services – trying to understand and measure how they work, whom they serve and how good they are. They assess energy services aimed at helping the poorest people around the world and explore public opinion on torture policies. The Children in Crisis project addresses how child health interventions interact with political reform. Specific research on governance, organizations and security capitalizes on FSI's longstanding interests and looks at how governance and organizational issues affect a nation’s ability to address security and international cooperation.
The 1400 page Lexikon der Geisteswissenschaften (Encyclopedia of the Humanities) offers a co
The 1400 page Lexikon der Geisteswissenschaften (Encyclopedia of the Humanities) offers a co
Transitions in technology are shaping, defining and establishing the future of the globalized social sphere with increasing pace and impact. As seen from a systemic viewpoint, the overall process seems to consist of a two-fold movement, in which an outer process of transition is joined by an inner transformational drive. While new social media like Facebook, Twitter, webcams, smartphones and iPads change the outer dimension of how we perceive, interpret and handle our social lives, thus transforming our habits of cultural consumption, contemporary brain and consciousness research are changing the inner dimension of the contemporary social by dramatically re-shaping the self-perception and interpretation of the individual through the findings, cultural distribution and practical applications of neuroscience and neurotechnology, thus questioning the conceptual cornerstones of sociality as conceived by Western modernity. This two-fold argument examines both processes from the inside out and the outside in. As such, the primary task as at now may not be trying to “explain” the meaning(s) of the new developments, but rather to identify an array of crucial questions at the inter- and trans-disciplinary crossroads between the different societal fields, culturo-political trends and scientific disciplines.
From 2007 to 2010, a financial and economic crisis gripped the United States, Europe and the world. 7 million Americans and 2 million Europeans lost their jobs, and 10 million were pushed below the poverty line. Thousands of families lost their homes, and many lost their savings. A global recovery from the effects of the crisis will take years.
As a result of the crisis, social banking and social finance have become important trends among bank customers in Europe. In fact, European social banks are the big winners of the crisis, growing by more than 20% per year and doubling their assets between 2007 and 2010. The crisis transformed social banks from niche institutions to large, publicly visible players. This success is due to the conviction of a growing number of bank customers in Europe that social banking is a less speculative and more responsible, ethical, and community-oriented way to deal with money than traditional banking. In the aftermath of the crisis, many see social banking as less egoistic and more caring for the overall progress of society than mainstream banking. Thus, social banking may provide important lessons for the banking and finance sector as a whole, in order to avoid further crises in the future.
In order to see what can be learned from social banking, let us first take a look at what social banking is; second, review the most important social banks today; and third, examine lessons from the success of social banks.
One hundred years after the deportations and mass murder of Armenians, Greeks, Assyrians, and other peoples in the final years of the Ottoman Empire, the history of the Armenian genocide is a victim of historical distortion, state-sponsored falsification, and deep divisions between Armenians and Turks. Working together for the first time, Turkish, Armenian, and other scholars present here a compelling reconstruction of what happened and why.
This volume gathers the most up-to-date scholarship on Armenian genocide, looking at how the event has been written about in Western and Turkish historiographies; what was happening on the eve of the catastrophe; portraits of the perpetrators; detailed accounts of the massacres; how the event has been perceived in both local and international contexts, including World War I; and reflections on the broader implications of what happened then. The result is a comprehensive work that moves beyond nationalist master narratives and offers a more complete understanding of this tragic event.
European leaders converged in Brussels to figure a way out of a worsening debt crisis and agreed to greater financial oversight and centralization. England refuses to go along with the plan, and Stanford political scientist Francis Fukuyama says he expects some countries will start bailing out of the eurozone.
“The political difficulties of deepening any fiscal union are so great that I wouldn’t bet on that happening,” says Fukuyama, the Olivier Nomellini Senior Fellowat Stanford’s Freeman Spogli Institute for International Studies and a resident at FSI’s Center on Democracy, Development, and the Rule of Law. “The easier path is going to be for countries to begin exiting.”
Fukuyama talks about the summit, the euro’s chances of survival and what’s at stake for America if the currency collapses.
What does the Brussels agreement mean for Europe’s debt crisis?
We will have to see how much of a binding constraint this agreement actually is. It’s just an informal agreement at this point. Political leaders can promise anything at this kind of summit and fail to deliver.
I think the most interesting thing going on is the eurozone – the 17 countries that participate in the euro – is actually splitting off from the greater EU. The reason that’s happening is that in order to save the eurozone, they need to make certain decisions on this type of deepening control. And countries like Britain will never go along with this. The 17 countries have to create their own unit that can make decisions at the expense of the larger EU.
Explain Britain’s refusal to have its budget reviewed by the European Commission
The UK is like the United States – they’ve always been jealous of their sovereignty. If you go to England and talk about crossing the Channel, they’ll say, “Oh, so you’re going to go to Europe.” While an American would say “England is a part of Europe.”
There’s a strong strain – especially within the conservative party – that really does not want to give up authority to what they regard as a bunch of French socialists in Brussels. That’s their vision of what the EU really represents. So they’re resistant about being dragged into any German scheme to deepen the powers in Brussels to include control over national budgets because that is a core element of sovereignty. The majority of people in Britain will say that will happen over their dead bodies.
What is the likelihood that countries will begin exiting the eurozone?
I don’t think it makes sense for a country like Greece to stay in the eurozone. It’s a matter of national pride that they don’t want to be the first country out, but it’s very hard to see how they actually return to growth under a system that links them to Germany in terms of the price of their currency. Long before there’s any kind of centralized fiscal reform that’s imposed on Greece, Portugal and these other peripheral countries, I think it’s more likely that they’ll exit. The euro will probably remain, but it will be at the core of the more stable countries.
What mechanism is there for countries to exit the eurozone?
There is no mechanism. Not only is there no legal way of exiting, there’s no disciplining mechanism. You have a stability pact where countries agreed they wouldn’t run a budget deficit greater than 3 percent, and Germany was really one of the first counties to violate that. But there were no sanctions. That’s the problem right now – there’s neither discipline nor an exit mechanism. That’s why everyone is fearing a disorderly, messy breakup of the EU, which would be extremely damaging.
President Obama has said the U.S. “stands ready to do our part" to help Europe resolve its crisis. What can America really do?
It’s an indication of how far we’ve fallen, but there’s really nothing concretely we can do apart from possibly increasing our International Monetary Fund share. But the IMF doesn’t have the ammunition to really help at all in this particular crisis. So all we can do is sit on the sidelines and try to get the Europeans to take our advice, which a lot of them are not inclined to do given the mess that happened on Wall Street three years ago. It’s a mark of the diminishment of overall American influence that we’re simply relegated to the sidelines of this crisis.
What’s at stake for America in the wake of a total European financial meltdown?
There’s a lot at stake. We are slowly crawling out of the biggest recession since the Great Depression. The one thing that could really send us back into a second leg of a recession is collapse of the European financial system and panic in Europe. If Europe doesn’t do well, the United States isn’t going to do well.
Fyodor Lukyanov is editor-in-chief of the journal Russia in Global Affairs, published in Russian and English with the participation of Foreign Affairs magazine. He has an extensive background in different Russian and international media, in which he worked from 1990 to 2002 as a commentator on international affairs.
Lukyanov now widely contributes to various media in the US, Europe and China. His monthly "Geopolitics" column appears in the Russian edition of Forbes magazine. He is a member of the Presidium of the Council on Foreign and Defense Policy, an independent organization providing foreign policy expertise and also a member of the Presidential Council on Human Rights and Civic Society Institutions.
Oksenberg Conference Room
Silvio Berlusconi has been a force in Italian politics during the past two decades. As the country’s prime minister and richest man, the media mogul managed to slip through sex scandals and criminal charges only to be forced out of office by Europe’s debt crisis.
As a new government led by economist Mario Monti takes place, Ronald Spogli talks about Berlusconi’s fall, what’s next for Italy and whether the United States should get involved in the eurozone’s tailspin. Spogli, who served as the U.S. ambassador to Italy from 2005 to 2009, is a Stanford trustee and major benefactor to the university’s Freeman Spogli Institute for International Studies.
What will Italy’s government look like under Mario Monti, and how will it trim the country’s $2.5 trillion debt?
Monti is an economist by training and has been president of Bocconi University, Italy’s most prestigious business school. He was the European Commissioner and that position earned him international influence and experience. So here’s somebody who has economic savvy, institutional gravitas, and the ability to be perceived as above politics.
The new government is expected to carry out the stability program enacted immediately before Berlusconi’s resignation on Saturday. This law contemplates asset sales to reduce debt, among other measures. The idea of a wealth tax has been floated in Italy – which by most measures is the richest country on the continent – as a way to immediately and significantly pay down the nation’s debt.
The Monti government is likely to consider this and other options to reduce the country’s indebtedness. However, it will have to gain parliamentary approval for any new laws. And depending on the nature of the bill proposed, passage of legislation could prove problematic.
How did Berlusconi manage to survive sex scandals and corruption charges, only to be brought down by Italy’s financial crisis?
I think he survived because for most Italians, his personal life was less relevant than his actions and promises as a politician who could do good things for Italy.
He came into power in 1994, and his ability to dominate Italian politics for nearly two decades has been the main story. He came in with an expectation that as Italy’s richest man and as a successful businessman, he would help jumpstart a country that had begun to stall economically. The notion was that after stagnation had begun to creep in, Silvio Berlusconi was the person to break the logjam and move Italy forward.
But for the last 20 years, Italy has had half the economic growth rate of Europe. That’s the biggest issue against Berlusconi. But nobody is 100 percent convinced that he’s really gone for good. He has an amazing ability to resurrect himself. He’s proven that throughout his political career.
How does Italy’s debt burden fit in to the rest of Europe’s economic woes?
Image
In terms of the sheer magnitude of the problem, the Italian circumstance dwarfs Greece’s situation and the ability of the initiatives meant to deal with other countries’ crises. The issue is whether the new Italian government will be able to calm the bond markets.
Restoring credibility is absolutely vital. The fundamental concern is that there’s no offered solution to an Italian debt problem. There is no bailout being contemplated that’s big enough to be able to deal with the issue, unlike Greece.
The euro crisis has claimed the political lives of prime ministers in Greece, Spain and Italy. Can we expect more high-profile political casualties?
It’s interesting how the markets – in such a short period of time – have forced a political change that the internal Italian political system has been unable to achieve for quite some time. It’s difficult to speculate as to whether those forces will move to more counties. But it certainly wasn’t contemplated that they’d have this impact on Italy, so its fair to say that nothing is completely off the table.
In the United States, candidates vying for the Republican nomination in next year’s election say America shouldn’t get involved in Europe’s financial mess. Is that the right attitude?
Europe is extremely important to the United States. Not just for economic reasons, but for political reasons. This is a European problem to solve. On the other hand, if it gets to the point where it continues to have a very damaging impact on the world’s capital markets, I think the resolve to keep it as an isolated problem may fade.
Beyond the narrowly defined economic impact of the crisis, we have many issues of global security that we cannot effectively deal with without the help of Europeans. If they’re going to go into a pronounced period of economic contraction, that’s going to heavily impact their ability to be a great partner for us. Italy is a perfect example of this concern. We counted on its help in the Balkans, Afghanistan, Iraq and Lebanon. Those are expensive missions, and if the country doesn’t grow its economy, it’s harder for them to be a great American ally. Italy’s economic situation extends to our basic international security interests.
Italy's economic crisis is the subject of a Nov. 18 presentation given by Roland Benedikter, a scholar at FSI's Europe Center.
Italy is the 8th biggest national economy in the world and the 3rd biggest in the Euro zone after Germany and France. Although it holds the third-largest gold reserves in the world, enjoys a high living standard with comparatively low private debts and is technologically innovative, as for example the recent takeover of parts of the U.S. car industry during the financial crisis 2008-11 underscored, it is currently considered to be the most vulnerable national economy threatened by the European debt crisis because of its huge public debt which reached 118% of the GDP in 2011. Although Italy is considered as "too big to fail" because it could hardly be saved by the European rescue funding programme with a GDP of more than 2.1 trillion Euro, there are fears that a further loss of trust by the international money markets could trigger an unprecedented crisis. Interest rates payed for Italian public debt rose to record numbers in fall 2011 due to the downgrading by leading rating agencies since summer 2011. The seminar gives a concise overview over the current state of affairs in Italy, including its debt and economic crises, and discusses their potential interweavement with the social crisis the country is undergoing in the view of international observers. In the age of media democracy, contextual political factors like social and cultural psychology, public appearances and symbolic events are increasingly impacting Italian politics and economics in ambivalent ways.
A podcast of this talk will soon be made available.
Reuben W. Hills Conference Room
Ronald I. McKinnon is an applied economist whose primary interests are international economics and economic development-with strong secondary interests in transitional economies and fiscal federalism. Understanding financial institutions in general, and monetary institutions in particular, is central to his teaching and research. His interests range from the proper regulation of banks and financial markets in poorer countries to the historical evolution of global and regional monetary systems. His books, numerous articles in professional journals, and op-eds in the financial press such as The Economist, The Financial Times, and The Wall Street Journal reflect this range of interests.
Event Summary
Professor McKinnon first outlines the two major assumptions behind his paper (available on this page). First, that from December 2008 to August 2011, an inflow of "hot money" to emerging economies resulted from low U.S., European, and Japanese interest rates. Since then, the trend has reversed in the wake of the European banking crisis and bank lending has fallen. Second, the dollar remains the widespread central bank reserve currency despite instability in the U.S. system.
McKinnon voices concern about Federal Reserve Chairman Ben Bernanke's zero interest rate policy, calling it an overreaction to the crisis and a "lose-lose" policy as it deters investment in the U.S. while simultaneously spurring destabilizing hot money flows to surrounding emerging markets. These countries are in turn forced to suppress interest rates to mitigate the inflows, and to build up dollar reserves to keep exchange rates in check. The zero interest rate policy also stimulates carry trades in commodities by speculators.
The belief that under a zero interest rate regime, inflation will stimulate the economy by bringing real interest rates to negative levels, is misplaced in McKinnon's view. He argues that this simply adds uncertainty and interferes with efficient bank intermediation, as banks hold high excess reserves and tighten lending, causing a procyclical contraction as has been seen in the United States and Europe. He contrasts this approach with China, which stabilized its economy following the “dot-com” bust by expanding rather than contracting bank credit. He criticizes U.S. pressure on China to appreciate or float its currency, asserting that these strategies would fail to reduce China's trade surplus.
McKinnon suggests that international reforms should target interest rates instead of exchange rates. He recommends coordination between central banks of the major industrialized countries, especially the United States, European countries, and Japan - to collectively raise interest rates to approximately 2%. This would improve overall bank intermediation, and would benefit both central and peripheral countries in Europe.
A question and answer session following the talked addressed topics including: the likelihood of a coordinated effort between central banks; the potential effects of Kucinich's monetary reform proposal; the potential negative effects on real growth from carry trades, and whether this is a cause for concern; and the effects of bank borrowing trends in Europe on the European monetary system.
CISAC Conference Room