PARTICIPANTS
John Lipsky, Michael Bordo, John Gunn, Ron McKinnon, Myron Scholes, John Shoven, George Shultz, Tom Stephenson, John Taylor, Ian Wright
ISSUES DISCUSSED
John Lipsky, former First Deputy Managing Director of the International Monetary Fund, discussed the current economic situation in Europe, in particular the Greek sovereign debt crisis.
Lipsky described efforts by fiscal policy-makers in Europe to salvage the euro amidst the crisis in Greece and argued effective ideas are being generated, but that they are not being followed through on. That is, plans have periodically been made that could potentially suppress the crisis and are do-able, but have not been fully implemented. He argued the issue in Europe is not coming up with the right ideas, but action actually being taken to implement those ideas.
With regard to whether fiscal union should and/or could be established in Europe, Lipsky argued fundamental disagreements between countries about key policies will be a major hurdle preventing this from occurring. However, he also shared his feeling that the monetary union in Europe will continue to survive because enough people believe a single currency market is necessary in Europe, and that if the euro unravels then so will the single currency market. He argued the bill other European nations are paying to solve the Green debt problem is not yet big enough to force the euro to be abandoned.
