BERLIN (Reuters) - Back in May, as the euro zone veered deeper into crisis, Nobel Prize-winning economist Paul Krugman penned one of his gloomiest columns about the single currency, a piece in the New York Times entitled "Apocalypse Fairly Soon".
By Peter Boone and Simon Johnson
In every economic crisis there comes a moment of clarity. In Europe soon, millions of people will wake up to realize that the euro-as-we-know-it is gone. Economic chaos awaits them.
This is the second post on today's release by the IMF of the 2013 Financial System Stability Assessment Report for European Union report.The first post - summarising top-line conclusion from the Technical Note on Progress with Bank Restructuring and Resolution in Europe is available here:
By Russ Koesterich: Now that a second Greek bailout deal has been reached, I’m getting lots of questions from investors about my outlook for the euro currency. The questions run the gamut from whether Greece will remain in the euro bloc to how the euro will likely perform going forward.
Greece's "Meaningless" DebtThe Debt-to-GDP ratio in Greece is now at 175% and rising. Recall Troika statements said anything over 120% was unsustainable.Yet each quarter debt and debt service ratios rise. Now, a new argument has arisen: Greece does not need debt relief because its maturities and payback time are large.
Authored by Lars Seier Christensen, CEO Saxo Bank via his blog, The real problem is not Cyprus, it is the Euro. After a few disturbing weeks, I would like to wrap up my comments on Cyprus and, hopefully, turn to other issues going forward. It is astonishing that a EUR 10 billion bailout can keep the world spellbound for so long. But then again, while the amount is not staggering, some of the implications are mind-blowing.
Today, European data shattered two long held beliefs by Markit and in general, unthinking economists everywhere.
European recession would be mild
Germany would continue to diverge from the rest of Europe
Markit reports Eurozone sees stronger rate of decline at start of second quarter
Officials are letting investors run away with the idea that there will be a solution to Greece's problems by the end of the week. European financial crises don't usually go so smoothly. Let's hope this will be the exception.
I said yesterday that a lack of clarity about how, exactly, Greece would be helped was a big part of the problem. Have things got any clearer since then? Well, yes and no.