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Saturday, February 23

23rd Feb - Weekender: The World

Previously on MoreLiver’s:

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Brussels blog round-up for 16-22 Febeuropp / LSE
MEPs vs the budget, the euro appreciates, and Italy heads to the polls.

How the Union Came Together and Why It’s Falling ApartForeign Affairs
After World War II, Europe began a process of peaceful political unification unprecedented there and unmatched anywhere else. But the project began to go wrong in the early 1990s, when western European leaders started moving too quickly toward a flawed monetary union. Now, as Europe faces a still-unresolved debt crisis, its drive toward unification has stalled -- and unless fear or foresight gets it going again, the union could slide toward irrelevance. (Sep-Oct 2012)

New European economic forecasts: The ever-receding recoveryFree exchange / The Economist 

Paul De Grauwe and the Rehn of TerrorKrugman / NYT
Polish leader cautious on euro entryeuobserver
Polish leader Donald Tusk has said his country will only join the euro once it is "100 percent ready," with 2017 said to be a target date.

(audio) What the strange trial of a dead man tells us about Putin’s RussiaThe World / FT
Sergei Magnitsky, a lawyer who died in a Moscow jail in 2009 after making allegations of tax fraud against interior ministry officials, is to be tried on tax-evasion charges in a Russian court beginning on Monday. Charles Clover, Moscow bureau chief; Geoff Dyer, diplomatic correspondent; and Neil Buckley, east Europe editor, join Gideon Rachman to discuss what this strange posthumous trial says about Putin’s Russia and how could it affect relations with Europe, and particularly the US.

Paul De Grauwe and the Rehn of TerrorKrugman / NYT

The multiplier mythbruegel
Applying a naïve multiplier analysis would thus suggest that the fiscal multiplier is not even zero but actually negative. This simple analysis suggests that different factors may have been responsible for the actual contraction of GDP.

Europe’s financial-transactions tax: Bin itThe Economist

Moody’s downgrades UK’s bond rating to Aa1 from Aaa; outlook stableCredit Writedowns

What took you so long, Moody’s?alphaville / FT

Moody's strips Britain of triple-A rating in major blow to OsborneReuters

U.K. Loses Top Aaa Rating From Moody’s as Growth WeakensBB

The final verdict on George Osborne as Chancellormainly macro

The Friday night dropButtonwood / The Economist

Huge Opportunity from Moody’s Downgrade of U.K.View / BB

UK's George Osborne Responds To Moody's DowngradeZH

A central bank crisisCoppola Comment
I have argued for a long time now that the problem in the Eurozone is not the fundamentals in the individual countries, it is the design and construction of the Euro. The Euro is a fiat currency disconnected from a sovereign - and that is a very strange beast indeed. To a considerable extent, the European policy makers are making things up as they go along, and therefore making considerable mistakes.

Markets Could Start Looking for ECB Easing NowWSJ
If this is the point at which financial markets start expecting the Fed to tighten policy then it should also be the point at which markets start to look for the European Central Bank to ease, writes Nicholas Hastings.

Not such a big rush this timeNordea
The ECB announced 356 banks would return a total of EUR 61bn of the 3-year money they took from the central bank in the second 3-year LTRO early last year.

Europe's €1.7 Trillion Maturity Cliff In A Declining Excess Liquidity ContextZH

Cyprus’s election: An apple of discord aheadThe Economist

Italy’s election: When cynics ruleThe Economist

A Revolving Door in Washington That Gets Less NoticeDealBook / NYT
Obsess all you’d like about President Obama’s nomination of Mary Jo White to head the Securities and Exchange Commission. Who heads the agency is vital, but important fights in Washington are happening in quiet rooms, away from the media gaze.

The Sequester: Absolutely everything you could possibly need to know, in one FAQWonkblog / WP

Japan's Cautious HawksForeign Affairs
Why Tokyo Is Unlikely to Pursue an Aggressive Foreign Policy – The election of the hawkish Shinzo Abe as Japan's prime minister has the world worrying that Tokyo is about to part with its pacifist strategy of the last 70 years. But Japan's new leaders are pragmatic, and so long as the United States does not waver in its commitment to the country's defense, they are unlikely chart a new course.

Catching up With China: Tocquevillian Revolution, Credit Bubble Morphs and Grows, South Sea, WarHistorySquared

A brief history of the Chinese growth modelmpettis

A simple model of growth crisesFree exchange / The Economist
It is worth remembering, though, that one of the biggest potential threats is that the government, worried about financial excess, will tighten policy too much, in the process generating the economic disaster it hoped to avoid. It's very reasonable to wring our hands over dodgy looking investment. But we should also keep in mind that there are worse things in the world than credit-market overheating.

Towards further liberalisation of the capital account in Chinabruegel
In China, discussions on capital account liberalisation have recently intensified. The Chinese government plans to gradually liberalise certain capital account items in the areas in which there is sufficient demand from the real economy and areas with relatively low investment risk, while maintaining tight regulation/supervision over the other items of the capital account and the financial sector. In response, Korean financial institutions need to establish strategies that will enable them to take part in this change, especially in the areas expected to undergo capital account liberalisation in the early stage.