URL: Latest posts
Cyprus, power politics and banking union
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The forced bail-in of depositors in Cyprus (a.k.a. taking away between 7 and 10 percent of depositors' savings) to fund part of the country's bailout is likely to be the first shot in the move toward a more consolidated banking system in the EU, but...
European Parliament kills Budget Proposal
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The European Parliament voted against the budget proposal for 2014-2020 yesterday, rejecting the cut in EU spending. Parliamentarians apparently did feel the pressure of national governments, or of national constituencies, by breaking from their poli...
European Parliament to vote in secret on budget
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The European Parliament has agreed to vote in secret on the multi-year EU budget known as the Multi-Annual Financial Framework. Proponents argue that it will prevent national governments from pressuring their members of parliament. At stake is the fi...
Greek politicians detach from reality
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Greek politicians are apparently resisting demands for the liberalization of the economy and budget cuts, in the hopes that Europe will pay a bigger part of the bill. That is provided that Angela Merkel loses her upcoming election in Germany, and tha...
Hungary undermines financial stability reporting
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Reuters reported this week that the Hungarian government is investigating the Hungarian Central Bank for giving financial stability data--on banking activities--to the IMF. The charge is that data on banks constitutes a business secret. National...
European Semester Officer
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The Netherlands proposed an EU Super-Commissioner for Budgetary Discipline in 2011 that would control the budgets of the member states as a way of stabilizing the euro zone, and rules to expel members who didn't implement austerity swiftly and e...
The Single Supervisor Mechanism is not a Banking Union
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The EU member states have just reached a deal to grant the ECB oversight of roughly 200 EU banks. That is a small fraction of the roughly 6000 that would have been supervised under the original plan that the Commission proposed. The most important fe...
Banking Union and the United Kingdom
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If the BBC talks about leaving the EU over banking union, then you know you've hit a nerve. The key concern is that the euro zone will develop its own identity within Europe, and that will be bad for Britain's banks. What this says between the l...
Banking Supervision is not a Banking Union
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At 4 a.m. this morning, heads of government reached an agreement in principle to transfer supervision of banks to the ECB. The details of how far the ECB's powers will go, and how it will relate to the European Banking Authority to and...
Defense, Offense, and the Euro Zone War
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Nearly two years ago, I predicted that the main targets of the euro zone crisis would be big countries, not small ones. That has since turned out to be the case. But what does it mean for Greece? And what does it mean for the EU in an economic policy...
A decade of austerity
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UK Chancellor George Osborne thinks that government will have to continue austerity until 2018, a full decade after the financial crisis started. That's the optimistic view of finding the bottom of a downward spiral of deflation and budget cuts.
Public Talk on the Euro Zone Crisis
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Tonight I will be talking about the euro zone crisis at the University of Twente, with a focus on what has and has not been done, and why the consequences are so dire:http://www.utwente.nl/gw/sg/programma/Europa.doc/...
Germany limits the European Stability Mechanism
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Germany's consitutional court ruled today that Germany may participate in the European Stability Mechanism, but with strict limits and conditions. The ESM is the permanent fund meant to prop up finances in some of the euro zone's countries.Condition...
Conservative Change in the Euro Zone
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There are hurdles to be taken before the decisions are definitive, but EU government leaders made decisions this week that set the course for the future of the euro zone. Austerity has won a host of demands that lock in debt repayments from Eur...
Grexit: G20 to the rescue again
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Open Europe reports on Twitter today that the President of the European Council has apparently called for a video conference of the G20 countries, to be held in approximately 3 hours time. The topic will undoubtedly be support for a new infusion...
Greek elections and capital flight
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Greece is bleeding out in advance of Sunday's elections, and is in danger of dying on the operating table. And it is the Greeks who are making this happen, not the EU or the international community. News reports are that Greeks have been withdrawing...
Bankia, Spain and the Euro Zone
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Bankia in Spain has become the next institution to require a bailout in the euro zone, and as is now a familiar pattern, Bankia has been declared too big to fail. 40 billion are needed immediately, and 80 billion eventually. The IMF has already sugge...
Dexia's / Belfius' Persistent Problems
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Reports this week indicate that the investment and retail bank Dexia needs yet another bailout. That problem is shared by three countries: Belgium, France and Luxembourg. Something needs to be done about Dexia (now officially rebranded Belfius t...
Reading on Debt and Rescues
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I was reading today on debt crises and rescue packages and thought--most of what we have had written in the past has been about debt crises in developing countries, or as they are more congenially known these days--emerging markets. Two of those I've...
Banking and the Euro Zone Crisis: the next phase
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As an ongoing symptom of the interconnectedness of private finance, public finance, and the lack of infrastructure in the euro zone, the IMF has warned that banks are expected to withdraw 1.2 trillion dollars of credit from the euro zone economy over...
