The Drachma Path by Andreas Koutras, 15 th May 2012
|
|
- Helena Skinner
- 5 years ago
- Views:
Transcription
1 The Drachma Path by Andreas Koutras, 15 th May 2012 Once more the scenarios of a possible Greek exit from the Eurozone are in fashion. We also see scenarios of a Greek exit from the EU. Most media and commentators replicate the mutterings of European or Greek or other investment experts. In this mess the conspiracy theories abound while some of the Greeks prepare for the day after others do not believe that it is possible. Today s Situation The Greek state has gone bust after years of financial mismanagement, corruption and nepotism that created a state economy of soviet proportions. The European partners rushed to Greece s help and gave loans albeit with strict conditionality. However, they made these loans to the people and the parties that were responsible for the mess in the first place. It was like West Germany giving money to Eric Honecker in order to disband his Stasi, restructure East Germany and prepare it for unification. As it happens the people objected to this idea. Unfortunately, this objection took the form of refusing the European help and path. In other words many identify Europe and in particular Germany as the culprit. Populist politicians are not a rare species in Greek politics. In fact they form the overwhelming majority. The lack of rational debate that was promoted by most political parties finally paid off. No-one can easily discern fantasy from reality. Conspiracy theories have displaced common sense. Many voters wanting to punish the politicians responsible for this and possibly their own selves for voting for them all these years cast their vote to the suicidal left and extreme right (including fascists). Europe responded to this with a simple proposition Either in with our terms or out. The bluff hypothesis A basic objection that one hears often against the European position is that Europe is bluffing. There is no way that Greece can be kicked out or that Greece would leave the Euro. Let us see if this is true. Those who play games like poker know well the concept of a bluff. The same bluff cannot be performed by more than 1-2 players. Europe and Eurozone is not one player but 17 (in the case of Eurozone). To think that 10 or more of these countries, European commissioners, ministers and other politicians have agreed to bluff is a conspiracy theory. Three years now and the same players have not managed to solve a problem that represents 2% of the European GDP. Did by magic agree to bluff? Reality is somewhat different. The constant vacillations of Greece have exposed the weaknesses of the economy and the gap between Greece and Europe in the areas of political rationality and discourse, social structure and culture. European policy makers are beginning to discern that the main problem in Greece is not financial in essence. The crisis is Greece was not a result of the world credit crunch or of bad lending practices by the banks. This was not clear to most Europeans when they signed the first bailout and MOU. The degree of total mess the Greek state was in was not known nor the corruption at all levels of the state apparatus. Now however, things are different. Slowly, a consensus opinion is formed that argues that it is time to put a backstop on the losses and instead concentrate in saving Spain. At least Spain conforms with most of the dictates and does not have second thoughts on the European future. It is not coincidental that we frequently hear of good wishes when it comes
2 to Greece. Everyone is wishing for Greece to stay in Europe. It is like the priest giving the last rites to a terminally ill patient. In other words a new dynamic seems to be shaping that wants Greece outside Europe. But it is not just the bad Europeans that want this outcome. Many in Greece wish for the same outcome. Some, for ideological reasons, others because they naively believe that they would make money in the process. Many, because they see political gains or the chance to govern and others because of obscure personal reasons. There is no conspiracy. Some are dressing their opinion in nationalist paranoia and others in socialist or communist terms. There are always the ones that simply want to see their debts reduced. The beloved dear uncle is dying and relatives, wives, mistresses and servants rush to the house to get the wall paintings and the silverware while others are trying to influence the will. The exit cost A frequent argument against kicking Greece out is that it is going to cost the other European countries huge amounts of money. Here, we need to clarify few points. The Treaties do not allow for kicking a member out. Article 7 only mentions suspension of parts of the treaty and only if there is a breach of article 2 which basically refers to democracy, human rights, equality etc. Thus assuming that Greece does not degenerate to this level it can only ask to leave the EE or the Eurozone. How much would this cost. I am sure many policy makers and countries have done this paper exercise. Most calculations would be probably be wrong but need to start somewhere. Let s give a brief look at some numbers: The Hellenic Republic has around 65billion of bonds outstanding under English law. The current market price is around 20% or 13billion. Thus if Greece declares a moratorium the maximum loss would not exceed 13billion, assuming that bondholders have marked to market their holdings. The IMF and EU loans would be around 240billion in nominal terms (including the money allocated for Greek banks). It would be prudent not to annoy the IMF so let us assume that Greece keeps servicing the IMF but imposes a moratorium on interest rate payments to the rest. As these loans carry an average coupon of around 3% the losses would be 7-8billion a year. These loans do not need to be repaid till anyway. Moreover, all of these loans are under non-greek law (English), and this means that when and if Greece decides to rejoin the European family these would have to be settled somehow. For example the Greek revolutionary loan of 1825 was finally settled in 1930, a mere 105 years later. The PSI in this respect is a double edged sword. ECB. The ECB that was exempted from the PSI still owns around 50billion of Greek debt. We do not know the terms of these bonds or where they are marked by the ECB as the swap was done in secret. However we can conservatively assume that 50billion losses are on the cards. The EU however, can use the special account that was created to keep on servicing these bonds directly and simply add the cost to the amount the Greeks owe to Europe. Then there is Target2. The obligations of the Bank of Greece towards the Eurosystem. These are estimated at around 130billion. It is not known how a breakup can be implemented. Could it be that the ECB provides some help to the reborn BoG to settle this and pay in the next 50y? Who knows?
3 The truth is that on a nominal basis the total loss would be north of 400billion but when one looks at the immediate losses then these are very manageable by the rest of Europe. The question is, how much would Europe save by stopping payments to Greece versus the money to keep Greece in the intensive care. How many more Eurogroup meetings would have to be done and how much political capital would be thrown on the Greek problem. This is a much harder calculation and any guesses are welcome. Would Europe simply postpone the inevitable for Greece at the risk of a much higher bang later? These are some of the enigmas that European policy makers are asked to solve. Greece has many wounds and not all are healed by throwing money. The conclusion is that the exit cost is high but not unbearable. In any case, it is not politicians who are going to pay but the taxpayers of the remaining member states. If European taxpayers buy the argument then the probabilities of a Greek exit increase. Recent polls show an increasing trend in this direction. The contagion cost The third and perhaps more serious objection against a Greek exit is the danger that there may be a contagion, a metastasis of the crisis to other peripheral countries like Spain. Many argue that this is going to be the end of the United Europe. Europe would break up, Germany would lose and finally capitalism would be defeated by the socialist forces. The truth is that if Greece had left 2 years ago the tremors would have been significantly stronger. Now, and after a successful PSI (remains to be seen whose success it is) there is no danger of a financial or banking collapse. Parties have done their war exercises and simulations and we are told that they are prepared for some of the worst contingencies. However, there is always the political and social risk. In reality the market is pricing correctly the financial implications of a Greek exit but has no way of estimating the risk of metastasis in Spain or other European country. Are these two events correlated? In other words, if tomorrow Greece decides to do everything that the Troika demands and stays in the Euro would the Spanish zombie banks come back to life? Would there be a rush to buy Spanish properties? Probably not. Maybe, this is why France and Germany are trying to raise a firewall. Hollande s victory might speed up this process. Talk of growth is just political crumps. European states must find ways to reduce their debts and deficits and in many cases do the structural changes (similar to those that are demanded in Greece) before they proceed with money printing. The challenge of the politicians is on how to sell this policy. Here lies the real danger for Greece. If Greece continues the ambivalent policies towards Europe, then Europe might decide to save Spain and do a catharsis with Greece. In other words Greece would be the catalyst that is going to propel Europe to a faster federal union but is not going to take part in it. It is certainly true that the probabilities of an EU breakup are higher than they were 5y ago but most who opine it are doing it in bad faith rather than rational argument. United Europe took a long time to form and was the dream of many for generations. The union has made many mistakes but it is a living organism that evolves and adapts. In the process some countries may drop out while others may be at a disadvantage, but the main idea would survive.
4 Legal exit parameters Until the Lisbon treaty there were no provisions for a member s exit. Article 50 introduced such a possibility. However, article 50 only refers to an exit from the union and not from the monetary union. As it is natural, legal opinion is divided. There are those who believe that an exit can happen only if Greece uses this process to get out of Europe and then tries to re-enter with a special status like Britain. Others are of the opinion of a selective suspension of articles related to the monetary union. In both cases, it seems the legal and mental jumps are great and Europe would have to structure procedures on the go. Both procedures are also time consuming. For example the first one needs 72% majority (minimum 65% of population) and the consent of the European parliament. In the end any obstacles would be cleared politically rather than legally and details would be filled on the fly. History does not offer many examples. The traditional empires or federations (if we can call Europe as such) do not easily allow members to flee. Many times the centrifugal or secessionist forces are crushed with force. We do not think that this is realistic in our case. The example of the Soviet Union is not similar as there was a massive breakup. The selective suspension of articles has also some interesting complications but at least spares Greece the negotiations for re-entry (article 48). A danger in this case is that the right to selectively suspend some articles may be extended to other chapters and other countries. The choice of a unilateral exit by Greece would be the most problematic and dangerous as Greece would breach the treaties. However, by far the biggest hurdle is how Europe and Greece would react from the time of the exit announcement to the final exit. This may take few weeks or more likely months. New Greek Drachma There are many technical problems that make the reappearance of the New Greek Drachma (or whatever the new name is going to be) problematic. Most of the problems though are Greek and not European. History has many examples of currency changes but most if not all deal with the demise of an old currency and the introduction of a new one. In other words the old currency stops being a legal tender and to be accepted as a means of exchange. As such the incentive of currency holders is to give up the old for the new no matter how low the value is. States recognize the sovereign right of a country to issue a currency and determine the exchange rate (Lex Monetae). In the case of the Euro things are different. The Euro would still exist and most probably would be a stronger currency than the NGRD. Also according to protocol 24 (3 rd stage of EMU) that sovereign right was taken away and pooled together with the other countries to create the Euro. Putting these details on the side a possible sequence of actions and events could be (The actions are highly speculative and hypothetical) The Hellenic Republic passes a law giving the BoG the right to issue NGD, to conduct monetary policy, to oversee Greek banks and to provide liquidity in the new currency. In addition it freezes banking transactions in order to change the Euros of all Greek citizens into NGRD. The original exchange rate does not
5 matter at all whether it is 1 to 1 or 1 Euro to 100NGRD. It is a nominal exchange. What matter is what you can buy with it. Another law forces redenomination of all liabilities and contracts made under Greek law to NGRD. As it is highly unlikely that paper notes would be ready in time, Greece might decide to stamp or otherwise cancel the paper Euro already in the banks with 100Euro Cancel-100NGRD. This may need the consent of the ECB as the notes are liabilities of the ECB. NCB are allowed to print notes according to their quota and the notes are distinguished by the first letter in front of the numbers. For example Greece has Y while Germany has X and Spain V. This however, cannot be used as a criterion since banknotes circulate across Europe. We can assume that electronic transfers would begin faster than the paper money as it only involves changing computer code. What is going to happen to the Greek banks? Their bonds if issued under Greek law would redenominate while those under English law most probably would not. The same goes for Greek corporates. For other contracts and derivatives it gets more complicated. Collateral given to the ECB would no longer be valid although in anticipation of such a move Greek banks would have requested funding from the ELA mechanism which is the liability of the Greek state. This would then be converted to the NGRD. Thus an early warning sign could be a massive increase in the ELA (currently at 54billion). The BoG would no longer be a Eurosystem member and ECB should return the capital plus any reserves (including gold) that the BoG contributed originally. However, the BoG would have a massive liability towards the Eurosystem through the Target2 imbalances. Would the other NCB s accept the loss? Who decides any disputes? In conclusion if Greece decides to change the Euro into NGRD it would encounter many problems. Anyone having Euros outside the banking system would hoard them and anyone having Euros inside the banking system would try to take them out causing a bank run. In no way this is a smooth changeover. Black market would thrive and almost certainly there would be controls on the movement of capital and foreign exchange and price controls. For a considerable period absurdity would rule and there is a real danger of a failed state. It is conceivable that enhanced security measure would be introduced to safeguard public and state enterprises, banks and other assets. The biggest losers would be public servants, pensioners and salaried workers that have not hoarded Euros or other hard assets. The example of Argentina where bank safe deposits were opened and the dollars found were converted might be replicated. The abovementioned actions are highly hypothetical and speculative. For the changeover to the NGRD to be successful Greece needs social calmness, planning and organization. These are hardly qualities that characterize the Greek state. In addition, many of the actions described, if they happen, breach fundamental rules and values of the EU. In other words, it is possible that article 7 and 2 (mentioned earlier) might be used to suspend Greece. Again this is a possibility but chances are that Europe would help Greece overcome some of the hurdles in the changeover. Greek Economy If Greece crosses the transitional period successfully then the economic pros and cons would not take long to manifest. Obviously, the devaluation shock would be good for Greek exports and tourism. The abrupt reduction in wage cost if it is accompanied by structural reforms and opening of the economy would most
6 probably be beneficial and the economy would jumpstart very fast. If FDI is encouraged by tax, and labor laws then the possibility of averting hyperinflation is realistic. Greece would need to find hard currency to pay for energy (current account balance is -19billion) and Europe and the IMF would help there. The bad scenario is if Greece decides to go autistic and closes up in which case the probabilities of a failed state increase. The rapid reduction in the GDP would not be reversed and Greece might degenerate fast. Traditionally, immigration acted as a safety valve (witness the millions of Greek diaspora) and we will probably see this again. Conclusion The possibility of Greece exiting the Euro and introducing NGRD is neither impossible nor highly improbable. Whether this would mean catastrophe depends on how the state and the people are going to handle the changeover, especially after they lost a significant part of their wealth. It is my conviction that Greece should fight to stay in the Euro and try to avoid the adventure of introducing a new currency by force. Exiting the Euro is a very expensive very volatile and very dangerous way of a state reducing its liabilities (salaries, pensions etc) as most of the loans are not under its jurisdiction and cannot be reduced to zero with a simple law (like the PSI). In any case the structural changes in the economy would have to be done, Euro or NGRD.
PSI. A Gordian Knot Current Issues and a possible solution. 2 nd February 2012 Andreas Koutras, PhD
PSI. A Gordian Knot Current Issues and a possible solution 2 nd February 2012 Andreas Koutras, PhD andreas@itcmarkets.com Sustainable Solution for Europe and Greece The restructuring of the Greek debt
More informationA Two-Handed Economist s Presentation on The Treaty. Professor Karl Whelan University College Dublin Presentation for Labour Party April 28, 2012
A Two-Handed Economist s Presentation on The Treaty Professor Karl Whelan University College Dublin Presentation for Labour Party April 28, 2012 The Fiscal Compact Treaty: Two Angles, Four Questions A
More informationGreece Facing an Uncertain Future
Greece Facing an Uncertain Future Professor of Finance & Economics, Un. of Piraeus Chief Economist, Eurobank Group November 9, 2012 ECONOMIST CONFERENCE ON CREDIT RISK MANAGEMENT FOR BANKING AND BUSINESS:
More informationGreece and the Eurozone: Background, Context, and Prospects. Stergios Skaperdas Global Peace and Conflict Studies February 12, 2015
Greece and the Eurozone: Background, Context, and Prospects Stergios Skaperdas Global Peace and Conflict Studies February 12, 2015 Agenda Background on Greece Context: Eurozone and the EU Four scenarios:
More informationContagion Scenarios for Euro Exits. Karl Whelan University College Dublin February 8, 2013 Chicago Booth Workshop
Contagion Scenarios for Euro Exits Karl Whelan University College Dublin February 8, 2013 Chicago Booth Workshop A Hard Money Small Country Exit Triggers? Dissatisfaction with ESM losses and further risk.
More informationThe Greek and EU crisis Athens, KEPE, June 27, 2012
The Greek and EU crisis Athens, KEPE, June 27, 2012 Nicholas Economides Stern School of Business, New York University http://www.stern.nyu.edu/networks/ NET Institute http://www.netinst.org/ mailto:economides@stern.nyu.edu
More informationLyle E. Gramley MEMBER, BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM. Conrnunity Leaders in Seattle
For Release ON DELIVERY THURSDAY, SEPTEMBER 11, 1980 12:00 P.D.T. (3:00 P.M. E.D.T.) SUPPLY-SIDE ECONCMICS : ITS ROLE IN CURING INFLATION Remarks by Lyle E. Gramley MEMBER, BOARD OF GOVERNORS OF THE FEDERAL
More informationGreece and the Eurozone: Background, Context, and Prospects
Greece and the Eurozone: Background, Context, and Prospects Stergios Skaperdas (UC Irvine) Center for Social Theory and Comparative History UCLA March 9, 2015 Agenda Background on Greece Context: Eurozone
More informationDiscussion of Marcel Fratzscher s book Die Deutschland-Illusion
Discussion of Marcel Fratzscher s book Die Deutschland-Illusion Klaus Regling, ESM Managing Director Brussels, 30 September 2014 (Please check this statement against delivery) The euro area suffers from
More informationEurozone Focus The Ongoing Saga Of Sovereign Debt
14 The Ongoing Saga Of Sovereign Debt Sovereign debt will continue to be the headline issue for the Eurozone. Whilst the discordant debate over Greece has certainly overshadowed concerns over Portugal,
More informationMember of
Making Europe Safer Prof. Stijn Van Nieuwerburgh Member of www.euro-nomics.com New York University Stern School of Business National Bank of Belgium, December 22, 2011 Agenda Diagnosis of design issues
More informationRegling: Greece has to repay that loan in full. That is our expectation, nothing has changed in that regard.
Handelsblatt, 6 March 2015 Greece needs to repay its loan in full Handelsblatt: Mr. Regling, the euro rescue fund EFSF has lent around 142 billion to Greece and is thus by far Greece s largest creditor.
More informationEurasian Economic Union. Advantages and disadvantages
Eurasian Economic Union. Advantages and disadvantages Nurdaulet Abilov ISE, KBTU 8 th June 2014 Everyone likes white beautiful horses but no one wants to become one. - St. Augustine The underlying logic
More informationThe main lessons to be drawn from the European financial crisis
The main lessons to be drawn from the European financial crisis Guido Tabellini Bocconi University and CEPR What are the main lessons to be drawn from the European financial crisis? This column argues
More informationHow the Eurozone will be resolving its crisis
How the Eurozone will be resolving its crisis Wolfgang MÜNCHAU Eurointelligence ASBL The political economy of the Eurozone is based on three pillars: lies, loopholes and fudges. Back in the 1990s, its
More informationWSJ: So when do you think they could realistically conclude these negotiations on the first review?
Transcript of interview with Klaus Regling, Managing Director, ESM Published in the Wall Street Journal, 12 April 2016 Klaus Regling, the managing director of the European Stability Mechanism, the eurozone
More informationClient Seminar: End game in the Eurozone? slaughter and may. 18 September 2012
Client Seminar: End game in the Eurozone? slaughter and may 18 September 2012 Eurozone Crisis: End game in the Eurozone? Over the past four years, the EU has responded decisively to the economic and financial
More informationCyprus Proposal. March 27 th, 2013, 5:00PM EST
Cyprus Proposal March 27 th, 2013, 5:00PM EST Cyprus Proposal The paramount questions remain: 1) What is the end-game solution for the Euro? 2) How will the Euro survive after the Cyprus solution? 3) What
More informationWolfgang Münchau Associate Editor Financial Times and President of Eurointelligence
Associate Editor Financial Times and President of Eurointelligence How Much Risk Can a Central Bank Assume? I will not answer this question because it is essentially unanswerable in abstract. The more
More informationCan the Euro Survive?
Can the Euro Survive? AED/IS 4540 International Commerce and the World Economy Professor Sheldon sheldon.1@osu.edu Sovereign Debt Crisis Market participants tend to focus on yield spread between country
More informationAdvisory. Cracks in the Eurozone
Advisory Technology January 26, 2012 Cracks in the Eurozone by James Campbell and Samuel J. Pearse As the euro crisis deepens both sides of the "Merkozy" couple are full of gloom, and with due cause as
More informationImpact of Greece Debt Crisis on World Economy
Impact of Greece Debt Crisis on World Economy Kovid Kumar Gupta 1 kovid.gupta@gmail.com Abstract This study aims at exploring the reasons behind the Greece debt crisis that emerged in the 21 st century
More informationA Decade-Long Economic Crisis: Cyprus vs. Greece
A Decade-Long Economic Crisis: Cyprus vs. Greece Gikas Hardouvelis Professor of Finance & Economics University of Piraeus LSE SU Hellenic and Cypriot Societies Forum London, March 18, 17 TABLE OF CONTENTS
More informationGreek Economic Crisis May 21, 2015
Greek Economic Crisis May 21, 2015 Prof. Nicholas Economides Stern School of Business, New York University http://www.stern.nyu.edu/networks/ NET Institute http://www.netinst.org/ mailto:economides@stern.nyu.edu
More informationThe Greek crisis and the European Stability Mechanism (ESM) Abstract The financial crisis of is considered by many economists to be the
The Greek crisis and the European Stability Mechanism (ESM) Abstract The financial crisis of 2007 2008 is considered by many economists to be the worst financial crisis since the Great Depression of the
More informationDr Andreas Dombret Member of the Executive Board of the Deutsche Bundesbank
Dr Andreas Dombret Member of the Executive Board of the Deutsche Bundesbank Looking to the future What comes next in terms of European financial integration? Speech at the South African Institute for International
More informationThe NewsLine. Grexit not yet averted. July 1, 2015 ECONOMIC RESEARCH
} MACROECONOMICS FINANCIAL MARKETS ECONOMIC POLICY SECTORS GREECE Grexit not yet averted Dr. Michael Heise Phone +49.89.3800-16143 michael.heise@allianz.com Allianz SE https://www.allianz.com/economic-research/en
More informationREFINANCING GUIDE Understand all your options, with our Refinancing Guide.
REFINANCING GUIDE Understand all your options, with our Refinancing Guide. 2018 ed. Michael Short 02 8091 5797 info@obtainfinance.com.au obtainfinance.com.au Obtain Finance, Australian Business Number
More informationFuture Scenarios: Europe in Prof. Michael C. Burda, Ph.D. Humboldt-Universität zu Berlin Keynote Speech, ITB Berlin 6 March 2013
Prof. Michael C. Burda, Ph.D. Humboldt-Universität zu Berlin Keynote Speech, ITB Berlin 6 March 2013 1 Overview Macroeconomic stability is essential for a thriving tourism business. Despite the calm in
More informationThe role of central banks and governments in the crisis
The role of central banks and governments in the crisis 87 th Kieler Konjunkturgespräch Kiel, March 18/19 2013 Joachim Scheide, Kiel Institute for the World Economy After the synchronous downturn we now
More informationDesign Failures in the Eurozone. Can they be fixed? Paul De Grauwe London School of Economics
Design Failures in the Eurozone. Can they be fixed? Paul De Grauwe London School of Economics Eurozone s design failures: in a nutshell 1. Endogenous dynamics of booms and busts endemic in capitalism continued
More informationCauses of the Great Depression
History 271 Devine Fall 2015 Causes of the Great Depression I. The International Economic Situation The U.S. emerges from World War I as the Engine of Prosperity it is the leading creditor nation and is
More informationDear comrades first of all I would like to thank you for the invitation.
Nikos Pappas, Synaspismos, European Left Tiedonantaja-festival 17.9.2011 Tampere Dear comrades first of all I would like to thank you for the invitation. A ghost has haunted Europe. The Greek Debt But
More informationReal GDP growth (y-on-y, % change) Unemployment rate (%)
Country risk update Greece July 10, 2012 1 Executive summary After the June 2012 elections the short-term risk of a Greek Eurozone exit has decreased However, uncertainty regarding the mid- and long-term
More informationChapter 3.3. Trading Psychology
1 Chapter 3.3 Trading Psychology 0 TRADING PSYCHOLOGY Forex traders have to not only compete with other traders in the forex market but also with themselves. Oftentimes as a Forex trader, you will be your
More informationA European Unemployment Insurance Scheme? An Interview with Sebastian Dullien
A European Unemployment Insurance Scheme? An Interview with Sebastian Dullien By Thomas Vendryes First evoked in the 1970s, the idea of a European unemployment benefit scheme has recently become a topics
More informationOpen Economy AS/AD: Applications
Open Economy AS/AD: Applications Econ 309 Martin Ellison UBC Agenda and References Trilemma Jones, chapter 20, section 7 Euro crisis Jones, chapter 20, section 8 Global imbalances Jones, chapter 29, section
More informationTo view this PDF as a projectable presentation, save the file, click view in the top menu bar, & select full screen mode. Upon completion of the
To view this PDF as a projectable presentation, save the file, click view in the top menu bar, & select full screen mode. Upon completion of the presentation, hit ESC to exit the file. To request an editable
More informationHistory of Recession. The Last Recession
Financial Instability is it a curse or a boom? Is it like that reality check which we need to bring us back to the path of inclusive growth and development or is it a result of Greed and No fear, is it
More informationInterview with Klaus Regling, Managing Director, ESM Published in Politis (Cyprus), 8 November 2015
Interview with Klaus Regling, Managing Director, ESM Published in Politis (Cyprus), 8 November 2015 Politis: The main goal of the programme is to restore confidence in Cyprus. Is this mission complete?
More informationAutomatic fiscal stabilisers for the EMU: The long term needs to be prepared today"
László Andor Commissioner for Employment, Social Affairs and Inclusion Automatic fiscal stabilisers for the EMU: The long term needs to be prepared today" Conference Let s think outside the box. Automatic
More informationEBF Response to FSB consultation on Funding Strategy Elements of an Implementable Resolution Plan
2 February 2018 EBF_025642D EBF Response to FSB consultation on Funding Strategy Elements of an Implementable Resolution Plan The European Banking Federation welcomes the Guidance on Funding Strategy Elements
More informationslaughter and may Eurozone Crisis What do clients need to know?
slaughter and may What do clients need to know? BRIEFING OCTOBER 2011 In light of the continuing uncertainty about the resolution of the eurozone crisis, we are issuing this briefing to highlight some
More informationECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY Annenberg Foundation & Educational Film Center
ECONOMICS U$A 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY ECONOMICS U$A: 21 ST CENTURY EDITION PROGRAM #25 MONETARY POLICY (MUSIC PLAYS) ANNOUNCER: FUNDING FOR THIS PROGRAM WAS PROVIDED BY ANNENBERG
More informationEuropean Union Economic Relations: Crisis and Opportunity
Congressional Testimony European Union Economic Relations: Crisis and Opportunity Douglas Rediker, Peterson Institute for International Economics Testimony before the United States Senate Committee on
More informationThe Outlook for the European and the German Economy
The Outlook for the European and the German Economy Annual Economic Forum of the German American Chamber of Commerce Chicago January 26, 2012 Joachim Scheide, Kiel Institute for the World Economy Once
More informationECONOMIC DEVELOPMENT FOUNDATION IKV BRIEF 2010 THE DEBT CRISIS IN GREECE AND THE EURO ZONE
ECONOMIC DEVELOPMENT FOUNDATION IKV BRIEF 2010 April 2010 Prepared by: Sema Gençay ÇAPANOĞLU (scapanoglu@ikv.org.tr) THE DEBT CRISIS IN GREECE AND THE EURO ZONE Greece is struggling with the most serious
More informationCHAPTER 4. EXPANDING EMPLOYMENT THE LABOR MARKET REFORM AGENDA
CHAPTER 4. EXPANDING EMPLOYMENT THE LABOR MARKET REFORM AGENDA 4.1. TURKEY S EMPLOYMENT PERFORMANCE IN A EUROPEAN AND INTERNATIONAL CONTEXT 4.1 Employment generation has been weak. As analyzed in chapter
More informationHow to Forecast Future Stock Returns: Part 3
How to Forecast Future Stock Returns: Part 3 Chuck Carnevale - Monday, July 16, 2012 Introduction In Part 1 and Part 2 of this three-part series, we established the basic principles of valuation and provided
More informationEuro, sovereign debt, liquidity and other issues: questions and answers from BNP Paribas
Euro, sovereign debt, liquidity and other issues: questions and answers from BNP Paribas After being asked a number of questions about the bank and the Eurozone, we have decided to publish the answers
More informationCHAPTER 3.4. Trading Psychology
CHAPTER 3.4 Trading Psychology TRADING PSYCHOLOGY Stock and CFD traders have to not only compete with other traders in the stock and CFD markets but also with themselves. Often as a stock or CFD trader
More informationHow Europe is Overcoming the Euro Crisis?
How Europe is Overcoming the Euro Crisis? Klaus Regling, Managing Director, ESM University of Latvia, Riga 3 March 2014 Eight reasons for the sovereign debt crisis 1. Member States did not fully accept
More informationApplied Economics. Senior Sophister
Applied Economics A Hellenic Tragedy: Greece, the Troika and the Euro - A Game Theory Approach Stephen Garavan Senior Sophister In this paper, Stephen Garavan aptly applies the principles of game theory
More information17 FAQs regarding Cyprus' bail-out/bail-in
17 FAQs regarding Cyprus' bail-out/bail-in 1. How big is Cyprus? Cyprus is an island in the Mediterranean see, located north of Israel and south of Turkey. Its size is around 9,250 square kilometres. It
More informationEurozone. Outlook for. Ernst & Young Eurozone Forecast. Summer edition 2012
Eurozone Ernst & Young Eurozone Forecast Summer edition 2012 Outlook for Published in collaboration with Andy Baldwin Head of Financial Services Europe, Middle East, India and Africa With key national
More informationResearch Note The increasing significance of Target2
Research Note The increasing significance of Target2 JAMES CONWAY AND MICHAEL O CONNOR SUMMARY Target2 is an obscure, technical issue that is becoming a matter of grave concern for the financial markets;
More informationGOVERNMENT DEBT RESTRUCTURE PRINCIPLES
RESTRUCTURE PRINCIPLES Presented at the Duke University School of Law Symposium Modern Municipal Restructurings: Puerto Rico and Beyond Zack A. Clement R. Andrew Black NOVEMBER 10, 2015 Zack A. Clement,
More informationIt Ain t Over Till the Fat lady Sings
International Web Journal Revue internationale www.sens-public.org Contact : redaction@sens-public.org James Bond If anyone tells you they know how the Eurozone crisis will play out, you tell them they
More informationBigger than the GFC TARGET2 and the Euro crisis
Bigger than the GFC TARGET2 and the Euro crisis Dr Oliver Hartwich, Executive Director The New Zealand Initiative Auckland, 27 June 2018 Do we really need to talk about Europe again? Do we really need
More informationOXFORD CENTRE FOR BUSINESS TAXATION
OXFORD CENTRE FOR BUSINESS TAXATION Oxford, 23 March 2006 "The European Commission's business taxation agenda" SPEAKING NOTES Ladies and gentlemen, It is a great pleasure to be here tonight. I am grateful
More informationResisting the Merge The Deadline for Integrated Disclosure Compliance Is Coming.
news and strategies for the evolving mortgage market themreport.com March 2015 Resisting the Merge The Deadline for Integrated Disclosure Compliance Is Coming. Are You Feeling the Crunch? 38 42 48 62 O
More informationThe EU is running out of choices to tame the crisis
PABLO DE OLAVIDE UNIVERSITY, Sevilla, SPAIN Conference: «Addressing the Sovereign Debt Crisis in Euro Area» Wednesday, 18 May 2011 The EU is running out of choices to tame the crisis Panayotis GLAVINIS
More informationAmerican Labor and the Great Depression
American Labor and the Great Depression (Genre: Online Article) 1 Welcome to the next section of our online series on the history of workers rights in the United States. Here, we take a look at a defining
More informationGreece, November 2011, in light of Argentinean Experience exactly ten years ago.
1 Greece, November 2011, in light of Argentinean Experience exactly ten years ago. Keynote speech by Domingo Cavallo at the CEO Summit, Doing More on Less, Athens, November 22, 2011 Let me be very sincere
More informationOBSERVATION. TD Economics GREEK DEBT CRISIS: ANSWERS TO FREQUENTLY ASKED QUESTIONS
OBSERVATION TD Economics GREEK DEBT CRISIS: ANSWERS TO FREQUENTLY ASKED QUESTIONS Highlights An acceleration in deposit withdrawals, combined with the prospect of an anti-austerity party winning the next
More informationGreek Debt Crisis: a New Possible Solution to Greek Debt Crisis. Panagiotis Mantalos. Statistics
WORKING PAPER 05/2015 Greek Debt Crisis: The @-euro a New Possible Solution to Greek Debt Crisis Panagiotis Mantalos Statistics ISSN 1403-0586 Örebro University Swedish Business School 701 82 Örebro SWEDEN
More informationGreek Debt Crisis: a New Possible Solution to Greek Crisis
Cloud Publications International Journal of Financial Crisis and Black Money 2015, Volume 1, Issue 1, pp. 1-6, Article ID Mgmt-109 Research Article Open Access Greek Debt Crisis: The @-euro a New Possible
More informationConsequences of present Euro area monetary policy on savings and capital wealth formation. 14 November Parliamentary evening in Brussels
Jacques de Larosière Consequences of present Euro area monetary policy on savings and capital wealth formation 14 November 2016 Parliamentary evening in Brussels As we all know, the ECB has engaged in
More informationTHE ROLE OF THE STATE IN ECONOMIC GROWTH PARIS. Idiosyncratic shocks, economic governance of the euro-area and the role of member states
THE ROLE OF THE STATE IN ECONOMIC GROWTH PARIS Idiosyncratic shocks, economic governance of the euro-area and the role of member states A policy brief by Boris Vujčić, Croatian National Bank December 2014
More informationEurozone 2016 Economic and Capital Market Outlook
Eurozone 2016 Economic and Capital Market Outlook December 11, 2015 by Gregory Hahn of Winthrop Capital Management Six years after the financial crisis, the Eurozone continues to face major challenges
More informationChapter 19 (8) International Monetary Systems: An Historical Overview
Chapter 19 (8) International Monetary Systems: An Historical Overview Preview Goals of macroeconomic policies internal and external balance Gold standard era 1870 1914 International monetary system during
More informationSuggested answers to Problem Set 5
DEPARTMENT OF ECONOMICS SPRING 2006 UNIVERSITY OF CALIFORNIA, BERKELEY ECONOMICS 182 Suggested answers to Problem Set 5 Question 1 The United States begins at a point like 0 after 1985, where it is in
More informationCan collective pension schemes work in the United Kingdom? Received (in revised form): 14 th August 2012
Original Article Can collective pension schemes work in the United Kingdom? Received (in revised form): 14 th August 2012 Sarah Smart is Chair of The Pensions Trust and a Board Member of the London Pensions
More informationTreasurers Kitchen Nightmares
Treasurers Kitchen Nightmares Treasurers have recently found themselves confronted with something completely new in modern economic history: negative interest rates. This situation obviously creates new
More informationCommentary: The Search for Growth
Commentary: The Search for Growth N. Gregory Mankiw For evaluating economic well-being, the single most important statistic about an economy is its income per capita. Income per capita measures how much
More informationFor the Eurozone, much hinges on self-discipline and self-interest
For the Eurozone, much hinges on self-discipline and self-interest Author: Jonathan Lemco, Ph.D. Will the Eurozone survive its severe financial challenges? Vanguard believes it is in the interests of both
More information: Monetary Economics and the European Union. Lecture 8. Instructor: Prof Robert Hill. The Costs and Benefits of Monetary Union II
320.326: Monetary Economics and the European Union Lecture 8 Instructor: Prof Robert Hill The Costs and Benefits of Monetary Union II De Grauwe Chapters 3, 4, 5 1 1. Countries in Trouble in the Eurozone
More informationSTRUCTURAL CHANGES OR POSSIBLE EXIT OF GREECE FROM THE EUROZONE?
A C T A U N I V E R S I T A T I S L O D Z I E N S I S FOLIA OECONOMICA 239, 2010 STRUCTURAL CHANGES OR POSSIBLE EXIT OF GREECE FROM THE EUROZONE? 1. Introduction The monetary integration in its higher
More informationCHALLENGES FOR THE EURO AREA AND IMPLICATIONS FOR LATVIA
ISSUE 2012/05 MARCH 2012 CHALLENGES FOR THE EURO AREA AND IMPLICATIONS FOR LATVIA GUNTRAM B. WOLFF Highlights Telephone +32 2 227 4210 info@bruegel.org www.bruegel.org This Policy Contribution reviews
More informationSpring Forecast: slowly recovering from a protracted recession
EUROPEAN COMMISSION Olli REHN Vice-President of the European Commission and member of the Commission responsible for Economic and Monetary Affairs and the Euro Spring Forecast: slowly recovering from a
More informationMaking the Eurozone sustainable Paul De Grauwe
index 2000=100 Making the Eurozone sustainable Paul De Grauwe The election of Emmanuel Macron to the French Presidency creates new opportunities for taking initiatives that will ensure, first, that the
More informationInvestment Insights. How to survive the EU referendum?
Investment Insights How to survive the EU referendum? Quarter two - 2016 Policymakers have played an increasing role in the direction of investment markets over recent years and with a host of activity
More informationGovernment and Central Bank Financial Crisis Handling Measures
8 th Serbia Economic Summit Belgrade, November 4, 2008 Introduction Excellencies, Ladies and Gentlemen, It is a pleasure and an honor to welcome this distinguished group here in Belgrade, on the occasion
More informationTaxing Risk* Narayana Kocherlakota. President Federal Reserve Bank of Minneapolis. Economic Club of Minnesota. Minneapolis, Minnesota.
Taxing Risk* Narayana Kocherlakota President Federal Reserve Bank of Minneapolis Economic Club of Minnesota Minneapolis, Minnesota May 10, 2010 *This topic is discussed in greater depth in "Taxing Risk
More informationcurrency union Abstract Proposals for implementing Eurobonds emerged during the Euro area sovereign
Macroeconomic effects of sovereign risk pooling in a currency union Cristina Badarau Florence Huart Ibrahima Sangaré Abstract Proposals for implementing Eurobonds emerged during the Euro area sovereign
More informationRemarks by James K. Galbraith at the Economists for Peace and. Security Bernard Schwartz Symposium on Jobs, Investment and Energy.
Remarks by James K. Galbraith at the Economists for Peace and Security Bernard Schwartz Symposium on Jobs, Investment and Energy. Delivered March 13, 2010, Ronald Reagan International Trade Center, Washington
More informationPolicy Discussion Assignment 3
Management 495 Spring 2015 Topics in Finance: International Macroeconomics Policy Discussion Assignment 3 May 19, 2015 Due: Instructor: E-mail: Fri, June 5 before 6:00pm Marc-Andreas Muendler muendler@ucsd.edu
More informationBloomberg reports that stocks lost $1.1 trillion in value.
Evening Briefing September 29, 2008 IN THIS BRIEFING: Clip of the day News of the day TPs and background: McCain s economic plan TPs and background: McCain s health care plan Clip of the day: McCain: it
More informationEuropean Bond Spreads, Yield Curves And Volatility
European Bond Spreads, Yield Curves And Volatility A client posed the question a few years ago during one of the many rolling sovereign credit crises then roiling the Eurozone as to when the whole thing
More informationVIEW. Scrambled Eggs and. Eurosystem. the OUR PERSPECTIVE ON ISSUES AFFECTING GLOBAL FINANCIAL MARKETS SECOND QUARTER 2012
SECOND QUARTER 2012 VIEW OUR PERSPECTIVE ON ISSUES AFFECTING GLOBAL FINANCIAL MARKETS Scrambled Eggs and the Eurosystem Scrambled Eggs and the Eurosystem The euro is like a plate of scrambled eggs. Let
More informationTOWARDS A MORE INTEGRATED AND STABLE EUROPE? National Bank of Poland
TOWARDS A MORE INTEGRATED AND STABLE EUROPE? National Bank of Poland by Daniel Gros Warsaw; October 2011 Key points 1. Background: global credit boom and excess leverage. 2. EMU system not designed to
More informationTranscript of Larry Summers NBER Macro Annual 2018
Transcript of Larry Summers NBER Macro Annual 2018 I salute the authors endeavor to use market price to examine the riskiness of the financial system and to evaluate the change in the subsidy represented
More informationThe fiscal adjustment after the crisis in Argentina
65 The fiscal adjustment after the 2001-02 crisis in Argentina 1 Mario Damill, Roberto Frenkel, and Martín Rapetti After the crisis of the convertibility regime, Argentina experienced a significant adjustment
More informationA Precondition for Monetary Order
CREATING A STABLE MONETARY ORDER Vaclav Klaus A Precondition for Monetary Order A stable monetary order is for me both a goal and an instrument for achieving other goals. My crucial message is the following:
More informationDiscussion on Boeri and Jimeno. Gilles Saint-Paul
Discussion on Boeri and Jimeno Gilles Saint-Paul What is the topic of this paper? The main focus of this paper is the interplay between the fiscal crisis and labor market reform The general thrust of the
More informationReplies to memo questions, 09/09/03
Replies to memo questions, 09/09/03 Dear Students, As you know, we did not cover the balance of payments so I ll skip the answer to my question on it. Your answers to the second question (why currency
More informationConference of European Lawyers in London on Swiss Franc Loans to Consumers 9/9/2015.
Conference of European Lawyers in London on Swiss Franc Loans to Consumers 9/9/2015. SWISS FRANC LOANS IN PRACTICE AND BANKING ETHICS EVI AVLOGIARI Attorney & Counsellor at- law (Supreme Court) Accredited
More informationThe European Monetary & Economic Union: The euro. Maria Lorca-Susino, Ph.D. University of Miami
The European Monetary & Economic Union: The euro Maria Lorca-Susino, Ph.D. University of Miami The EU and The Euro Copenhagen Criteria defines whether a country is eligible to join the EU: Institutions
More informationForex Illusions - 6 Illusions You Need to See Through to Win
Forex Illusions - 6 Illusions You Need to See Through to Win See the Reality & Forex Trading Success can Be Yours! The myth of Forex trading is one which the public believes and they lose and its a whopping
More informationTHE 800 POUND GORILLA IN THE ROOM
THE 800 POUND GORILLA IN THE ROOM The Built-In Interest Expense On Mendocino County s Unfunded Pension Obligations An Extreme Threat to the County s Long-Term Finances August 27, 2009 Copyright YourPublicMoney.Com,
More information