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Friday, March 2

2nd Mar - Press Digest

Here are the ending week’s select articles on (mostly) the euro crisis from the ‘big three’. Warning: reading newspapers and magazines is usually not a good way to get ideas. The whole point of reading these is to know and understand what the other people are thinking.

Debt crisis: As it happened

Allen & Overy's David Benton: the man who decides if Greece has defaultedThe Telegraph
David Benton is probably the most important man you have never heard of.

David Cameron plan for EU growth to solve debt crisis is ignoredThe Telegraph
David Cameron has accused the European Union of ignoring his proposals to tackle its debt crisis by cutting red tape to free markets and unleash economic growth.

Euroland will pay for this monetary madnessThe Telegraph
The flood of cheap money from the European Central Bank is storing up grave trouble for the future.

Draghi Bazooka has not yet stopped Club Med money collapse The Telegraph
The ECB action is leading to structural subordination of all other creditors, degrading the bonds of weaker banks – some of which will soon be reduced to junk status. The Draghi LTRO reduces the likelihood of defaults, but increases the losses should it happen.

Why we should be nervous about QE and inflationThe Telegraph
I was an early advocate of quantitative easing, raising the possibility in September 2008 and advocating its commencement from November 2008. But, speaking as a fan of the idea, I have never been under any illusions regarding its difficulties, dangers, and limitations.

Kohl Urges Germans to Stay Committed to EuropeSpiegel
Former German Chancellor Helmut Kohl stepped into the German debate about aid for Greece on Tuesday, warning that the goal of a united Europe mustn't be questioned. Opposition leaders say Merkel's government is teetering following Monday's backbench revolt in the parliamentary vote on the Greek bailout.

German Court Grants Parliament More Say in BailoutsSpiegel
The nine-member panel set up by the German parliament to monitor the activities of the temporary euro bailout fund is "in large part" unconstitutional, Germany's top court said on Tuesday. The ruling could curtail Berlin's ability to fight the euro crisis.

Second Bailout for Greece 'Will Not Be the Last'Spiegel
The German parliament may have passed the second rescue package for Greece, but Chancellor Merkel had to contend with dissenting backbenchers and a loose-lipped cabinet minister who wants Greece out of the euro zone. German commentators, too, warn that Athens will be dependent on European help for years to come.

German Minister Calls for Greek Euro ExitSpiegel
German Interior Minister Hans-Peter Friedrich has said that Greece would have better chances of economic recovery if it left the euro zone. He told SPIEGEL that Athens should be offered a deal it couldn't refuse, in order to encourage it to quit the currency union.

We Have Become the New VillainSpiegel
The German parliament is set to approve a new multibillion euro bailout package for Greece on Monday, but instead of thanks, southern Europeans are expressing their dislike of us. Germans will have to get used to their new role: We have become the Americans of Europe.

German Parliament Approves Greek Bailout PackageSpiegel
The German parliament on Monday approved the second Greek bailout package with a large majority, as expected. A total of 496 lawmakers voted in favor and 90 against, reports said. Chancellor Angela Merkel succeeded in pushing the vote through but failed to secure an absolute majority in her government.

Fresh Liquidity Buys Time for EU LeadersSpiegel
The European Union summit was free of drama on Thursday for what feels like the first time in years. That calm is misleading, though. It is the result of the massive injection of liquidity into European banks by the ECB. The move buys time -- and it is up to EU leaders to use it wisely.

'The ECB's Policies Are Anything But Harmless'Spiegel
For the second time in about two months, the European Central Bank injected liquidity worth around half a trillion euros into the Continent's banking sector. Hundreds of financial institutions eagerly took advantage of the low-interest loans, but German commentators warn Thursday that the long-term dangers to the economy may not be worth it.

Southern European Money Migrating North to SafetySpiegel
More and more people in southern euro-zone countries are moving their money north amid fears of losing their savings in the crisis. The capital flight makes things difficult for banks back home, but experts say there are no legal measures to stop it. Any steps would probably come too late, they say, and might even endanger the European project.

Germany May Support Euro Firewall IncreaseSpiegel
Germany has staunchly opposed increasing the euro backstop fund, despite international pressure to strengthen the firewall. But now there are signs that Merkel's government may reconsider. According to a newspaper report, Berlin knows it won't be able to resist the pressure for much longer.

'A Decisive Moment' for Ireland in EuropeSpiegel
Irish Prime Minister Enda Kenny has announced his country will hold a referendum on Europe's fiscal pact. A "no" vote in Ireland could cause uncertainty on the financial markets and even put the future of the common currency in doubt. But with the country still dependent on EU aid, the Irish can't afford to say no.

Merkel Stuck in the Euro Firewall TrapSpiegel
Merkel is damned if she does -- but Europe could be damned if she doesn't. Pressure is growing on the German chancellor to drop her government's opposition to significantly increasing the size of the permanent euro backstop fund. But such a move would carry significant political risks for Merkel at home.

German Court Grants Parliament More Say in BailoutsSpiegel
The nine-member panel set up by the German parliament to monitor the activities of the temporary euro bailout fund is "in large part" unconstitutional, Germany's top court said on Tuesday. The ruling could curtail Berlin's ability to fight the euro crisis.

Tough talk, no strategyCharlemagne / The Economist
Europe needs to do more than respond to every problem with fresh sanctions

Portugal and the euro: The uncertainty societyThe Economist
To escape from its troubles, Portugal will have to abandon many of the things that made them bearable

Politics in Greece: Election gamesThe Economist
The manoeuvring ahead of a new vote

Politics in Italy: The party’s overThe Economist
The popularity of Mario Monti’s government upsets traditional parties

The French election: Squeezing the richThe Economist
An already highly taxed country may be burdened even more

The euro crisis: A firewall full of holesThe Economist
The euro zone’s rescue strategy still does not add up

Decline and smallFree exchange / The Economist
Small firms are a big problem for Europe’s periphery

Short-changed: The British stockmarket is not fit for purposeButtonwood / The Economist
Liquidity may be a good thing: it encourages investors to take the plunge into equity markets. But it is an intermediate goal, not an end in itself. (see also this)