Yves here. Our post today on Cyprus provides some broad background, including the political dynamics and the not-terribly-defensible reasons the Eurozone went that route, and a short discussion of the large risk that this inept move precipitates a wider crisis. This article by Charles Wyplosz serves as a companion, since it discusses the “tax,” um, expropriation option versus other alternatives. Even more important, it sketches out why this scheme, even if it manages not to kick off a crisis, is still inadequate to rescue Cyprus.
Forex Playbook submits: With the next chapter of the Greek debt crisis soon to unfold in Athens, Greece, investor confidence in the eurozone is far from restored. Ahead of Friday’s revelation of SEC charges in the Goldman Sachs’ (GS) scandal, the euro was headed toward further declines while Greek bonds had been trading lower for the fourth consecutive day.
Time to breathe a sigh of relief, with resolution of the Greek bailout? Not so fast. Greece is likely to need re-adjustments to its plan  Plenty of challenges remain in the eurozone; PIMCO's El-Erian says Portugal is next . In fact, as Jeffry Frieden and I argue, the resolution of the problems facing eurozone policymakers is likely to be contentious and prolonged.
In the wake of S&P debt downgrades, Merkel vows faster eurozone reforms.
European leaders promised on Saturday to speed up plans to strengthen spending rules and get a permanent bailout fund up and running as soon as possible, a day after U.S. agency S&P cut the ratings of several euro zone countries' creditworthiness.
BRUSSELS — Within minutes of eurozone finance ministers reaching a deal to cut Greece’s debt late on Monday, commentators on Twitter were dismissing it as another exercise in “kicking the can down the road”.
To an extent that is true. Under the agreement, the euro zone and the International Monetary Fund will give Greece two more years to reach its budget goals and will find another 44-billion euros (US$57-billion) to keep the country afloat in the meantime.
A prominent European economist is predicting 2013 will be the year we start talking about an exit from the eurozone crisis — or “Crexit,” as he calls it.
Michael Heise, chief economist for German financial giant Allianz SE , coined the term in an op-ed in the Financial Times on Monday.
The recovery for most of the euro zone will certainly begin in the second half of 2013
PARIS — The eurozone’s crisis is far from over and its members must consolidate their budgets and forge a banking union to put the bloc on a more stable economic footing, the leaders of the IMF and European Central Bank said on Friday.
By Peter Boone and Simon Johnson
The Europeans announced Sunday they would provide 30 billion euros of assistance to Greece, amid informed rumors that the IMF will offer another 10-15 billion. With a total of say 40-45 billion euros in the bag – more than the market was expecting — the Greeks have time to make changes.