In today’s challenging economic environment, even if you are not running your own company, old rules and behaviours do not apply anymore. Living in an uncertain world, higher levels of certainty cannot be created by generating more information, being obsessed with objectivity and the sacredness of numbers. It’s in fact open-mindedness that is critical to…Details
Meet some of IE University’s students as they talk about settling in and their impressions during the first few days at IE’s campus in Segovia. Video produced by IE University’s Media Lab.
By Eliran Drucker, IE International MBA 2011 graduate You don’t value your freedom when you are a student. Any deliverable seems like a major issue that intervenes with any minute of awakens during your day, you are full with guilt and your conscious works extra hours. On the other hand, can you imagine having at…Details
The OCSC and IE are partnering in order to offer candidates who participate in the 2012 OCSC International Education EXPO the opportunity to study at a top tier academic institution in the European Union, and do so with access to an OCSC-specific scholarship program. Only participants who participate in the fair and who register with…Details
Luis de Guindos, an economist at IE Business School and director of the PwC and IE Business School Center for the Finance Sector, has been appointed Spain’s new Minister of Finance and Competitiveness. “IE Business School is very proud that one of our prominent experts has been appointed Finance Minister for Spain’s new government”, says…Details
By Fernando Fernandez, professor at IE Business School
Forget about short cuts and soft measures: Europe’s problem is that it has lost the market’s confidence, and in order to get it back it will have to take some hard measures.It’s a well worn phrase which is why I have permitted myself a certain amount of poetic license, because it seems to go perfectly with the confusion that is rife among markets and analysts following recent events. The feeling of insecurity is such that we are desperately seeking a lifeline to cling to. Someone is always up for the job of throwing said lifeline and public opinion seems to have honed in on two specific groups: governments comprised of technocrats and the European Central Bank (ECB). The former are expected to bring the required level of sanity and the ECB is supposed to start buying up debt with no thought for expenses. But once again it’s the wrong diagnosis.
The European Commission, according to its vice president Olli Rehn, has decided that the key lies in restoring confidence in fiscal sustainability and the financial system, and in speeding up reforms that stimulate growth potential. Hence we have to change our tune or we have to take notice of the Commission, but either way we should not be looking for short cuts.
The European problem is a simple one. Investors have lost confidence in the Euro, not just in Italy. Let’s not confuse the symptoms of this particular illness. They have done it for a series of institutional reasons – the well-known design faults of the Monetary Union – and mistakes made in the way the crisis has been managed. In my opinion they include two particularly big mistakes. The first was to declare that European sovereign debt is restructurable – albeit only Greek debt, but who on earth believes that at this stage – without having the necessary financial resources or legal instruments to effect an immediate exchange, and the second was to punish banks for their sovereign debt holdings without having the necessary resources to fill the hole created. Both decisions have had consequences that were impossible to recover from in the short-term: they have made sovereign debt a credit asset, a financial instrument that competes with emerging debt, and have eroded the credibility of the European banking system, which has been forced to divest its sovereign debt.Details