The Euro

The Euro

  • – When Will the Euro Collapse? It’s Already Dead
    In reality, whether it is a few months or a decade away does not make as much difference as you might suppose. Why not? Because in most of the ways that actually matter, the euro is already dead.
  • The Financial Times – Greece Should Not be Sacrificed for the Euro
    According to Greek mythology, the noble Iphigenia was sacrificed so that the warships could have a fair wind to Troy. According to eurozone mythology, Greece should become the Iphigenia for the euro to sail ahead. However, this sacrifice would fail to do the trick. Since Greece cannot access capital markets and Greeks have no appetite to leave the eurozone, a “Grexit” would have to be a decision made by Brussels and Berlin. Would the eurozone be justified in ejecting Greece? And would it be wise?
  • MarketBeat (WSJ Blog) – Is The Euro Dying Already?
    Is the euro dying already? This thought flashed through our minds yesterday while reading this article in Spiegel Online. The story looked at some banks and companies in Europe preparing for a collapse of the euro, which could have the perverse effect of helping to bring about currency’s crash. This bit caught our eye:

Banks are particularly worried. “Banks and companies are starting to finance their operations locally,” says Thomas Mayer who until recently was the chief economist at Deutsche Bank, which, along with other financial institutions, has been reducing its risks in crisis-ridden countries for months now. The flow of money across borders has dried up because the banks are afraid of suffering losses.

According to the ECB, cross-border lending among euro-zone banks is steadily declining, especially since the summer of 2011. In June, these interbank transactions reached their lowest level since the outbreak of the financial crisis in 2007.

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