12:31 PM, Mar 17, 2013 • By GEOFFREY NORMAN
Recall how improbable it seemed that the tiny nation of Greece might bring down the Euro and cripple the world's financial mechanisms? And, then, the story – if not the danger – seemed to fade away. Well, it now appears that the even more insignificant island of Cyprus may provide the spark. As Liz Alderman reports in the New York Times:
Under an emergency deal reached early Saturday in Brussels, a one-time tax of 9.9 percent is to be levied on Cypriot bank deposits of more than 100,000 euros effective Tuesday, hitting wealthy depositors — mostly Russians who have put vast sums into Cyprus banks in recent years. But even deposits under that amount would be taxed at 6.75 percent, meaning that Cyprus’s creditors will be taking money directly from pensioners, workers and regulator depositors to pay off the bailout tab.
“What the deal reflects is that being an unsecured or even secured depositor in euro area banks is not as safe as it used to be,” said Jacob Kirkegaard, an economist and European specialist at the Peterson Institute for International Economics in Washington. “We are in a new world.”
Great catastrophes can begin in unlikely places. Bismarck famously predicted that the great European war would likely be ignited by "some damned foolish thing in the Balkans."
Could the collapse of the euro and, even, the EU be triggered by the bailout of the banks of some island in the Mediterranean?
Zero Hedge is, predictably, paying close and mordant attention.
12:00 AM, Feb 9, 2013 • By IRWIN M. STELZER
Growth is the summum bonum of economic policy. Tough to arrange at home: stimulus packages don’t work very well, and monetary policy produces lots of fiat money but not very many jobs. The solution: export-led growth—the other guy will buy so much of your goods and services that your economy will grow. There are two ways to make this sort of growth happen. Lower the international value of your currency so that your output is cheaper overseas, or increase productivity at home by lowering labor and other costs and therefore the prices you need to charge foreigners.
6:02 PM, Aug 24, 2012 • By GEOFFREY NORMAN
Elections can turn on many things; some of them beyond the abilities of mere spin doctors to manipulate.
The war between lenders and borrowers. May 28, 2012, Vol. 17, No. 35 • By IRWIN M. STELZER
Debtors of the world, unite—you have nothing to lose but your IOUs!
That seems to be what the Greeks are discovering—that they have less to lose by default, with all of its consequences, than by trying to be Germans.
9:06 AM, May 8, 2012 • By DANIEL HALPER
Steve Hayes, with Charles Lane and Charles Krauthammer, last night on Fox News:
In order to save the European economy, Europe's political class needs to make some hard decisions. 1:55 PM, Feb 12, 2012 • By MARK HEMINGWAY
Martin Taylor, chairman of Syngenta and a former chief executive of Barclays, has written a thought provoking article about the perilous state of the European economy in the Financial Times. He observes that while most of the world is quick to blame bankers, the problem is also that European leaders need to make some unavoidable and tough decisions:
2:32 PM, Dec 7, 2011 • By JOHN ROSENTHAL
Standard & Poor’s warning that no less than fifteen eurozone states, including Germany, could lose their AAA credit rating has been met with howls of protest from leading German politicians.
Someone’s gotta give.Dec 12, 2011, Vol. 17, No. 13 • By CHRISTOPHER CALDWELL
A lot of intelligent money people think this is make-or-break week for the euro. They say that by Friday, December 9, either there will be a path toward resolution of Europe’s debt crisis, or events will accelerate toward a breakup of the single currency. One such is Morgan Stanley analyst Arnaud Marès, who has a record of being right about Europe when others were wrong.