The weekend’s
article selection on the euro crisis. A special section on “Fixit”-talk (Finland leaving euro)
Earlier on
MoreLiver’s:
GENERAL
The respected economist and Telegraph columnist
summarises the argument for an orderly break-up of the eurozone if a struggling
member was forced to leave that won him the Wolfson Economics prize.
The Euro Crash Refuses To Go On Vacation – Testosterone
Pit
That top economists would directly, publically,
and en masse attack the government is unusual in Germany. Chancellor Angela Merkel was furious. She had to explain once again
what the agreement’s “small print,” that apparently no one has read yet, really
contained. The EU Summit “changed nothing” in Germany, she said.
Steepening periphery curves combine need for
yield with increasing sovereign risks – Sober
Look
Other than rolling very short maturities at
lower rates, Eurozone periphery government financing is becoming increasingly
more expensive.
It Ain't Priced In – Bruce Krasting
On Swiss
peg, possibility of capital controls, weakness of euro (EURUSD to parity?)
Citigroup: the ban seems likely to add to selling
pressure on cash bond spreads in peripherals, even if it brings down CDS and
tightens the basis.
The CPI number once again came in negative,
justifying Zurich's defense of the EUR/CHF peg.
EURUSD Slides To 2 Year Low As Reality
Supercedes Hope – ZH
Friday’s
market action.
SUMMIT / PLANS
Neither Grexit, Nor Spexit, It’s Fixit or
Fexit – A
Fistful of Euros
Huge post
from Edward Hugh: discusses ESM, what the summit really meant, and what options
are left for the euro area.
Doubts Emerge in Bloc's Rescue Deal – WSJ
One of the few areas where finance ministers
are expected to make significant progress on Monday is the details of the
Spanish bank bailout. While final sign-off is expected later in July, officials
have said the list of conditions to be attached to the assistance is likely to
be largely decided and a rough figure for the total agreed.
The EZ crisis – born as a debt crisis (Greece) – has grown up into
a banking crisis (Ireland, Cyprus, Spain, …). This column argues that Spain is symptomatic of
larger banking problems, so the EU Summit decisions on banking union are
welcome and critical to any long-term solution. Yet someone must pay for
Spanish bank losses. Spanish politics is shielding Spanish creditors, European
politics is shielding EZ taxpayers, so the Spanish government will pay – and in
doing so may go the way of Ireland. This crisis is far from over.
The EU summit euphoria drowned by European
bureaucracy – Sober
Look
EZ-wide
bank regulation, ESM funding to Spanish banks and ESM sovereign purchases are “complicated”.
ECB
ECB board member: Euro-bashing is Anglophone
overload – A
Fistful of Euros
More substantively. there is a strange symmetry
between this view and the pre-crisis gloating of the European Commission that
the single currency’s American critics had been all wrong.
Draghi's zero deposit rate policy put an end to
euro money market funds – Sober
Look
Such conditions simply make it impossible to
operate a euro denominated money market fund, causing these firms to pull such
products off the market
A sign of health in the European banking system
would be for the German banks to turn around and start lending those deposits
south. Even a 0% deposit-facility rate isn’t, alone, enough to do it.
Commerzbank's Rieger Says ECB Arsenal Is `Very
Limited' – BB (mp3)
Pimco's Balls Says European Rate Cuts
`Irrelevant' – BB (mp3)
FINLAND
For the time being, the forces formally
supporting a “Fixit” are in the minority, but there is now significant internal
debate on the pros and cons of membership.