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Sunday, May 18

18th May - W/E: The World Links

Previously on MoreLiver’s:

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Brussels blog round up 10 – 16 MayEuropp / LSE
EP elections, Farage vs Le Pen, and what now for Donetsk and Luhansk?

EU officials plotted IMF attack to bring rebellious Italy to its kneesThe Telegraph
The former US Treasury Secretary says that EU officials approached him in the white heat of the EMU crisis in November 2011 with a plan to overthrow  Silvio Berlusconi, Italy’s elected leader.

Keynesian economics works: Eurozone editionmainly macro

Weekend Reading for EuropeWSJ

‘It was the point where the eurozone could have exploded’FT
In the first part of a series on the year that forever changed Europe, Peter Spiegel recreates three bitter days in November when the eurozone crisis hit its lowest moment

Inside Europe’s Plan ZFT
In the second instalment of a series on the year that changed Europe, Peter Spiegel reveals how a secret strategy was developed to contain the firestorm from a Greek exit.

‘If the euro falls, Europe falls’FT
In the third part of a series, Peter Spiegel examines Angela Merkel’s deft political moves that led to the end of the crisis

Charting Europe’s JapanificationFT
Credit Suisse: The lessons from Japan suggest that policy action in coming months may be critical for a recovery in inflation.

Secular Stagnation in the Euro AreaKrugman / NYT
Europe is extremely likely to have a significantly lower natural real rate of interest heading forward than it had in the past. This in turn suggests that it’s a really really bad idea to let inflation drift down, whether or not it turns into outright deflation.

Does the Euro Zone Need Deflation?WSJ
Ultimately, euro-zone governments are likely to backslide on their treaty obligations if, as seems likely, the ECB fails to trigger significant growth. In which case, they’ll be glad if deflation allows them to sell vast quantities of debt.

DBW: ECB negative deposit rate editionFT
The most discernible impact of a negative deposit rate in the broader financial markets may well be an intensification in the hunt for yield.

The ECB should do
As banks repay their loans from the Long-Term Refinancing Operation, the ECB’s balance sheet is shrinking. This column argues that, given the slow recovery and sustained low inflation, the ECB should replace its bank lending programme with quantitative easing. Buying short-term government debt would be consistent with the ECB’s inflation target, would keep the ECB’s monetary policy separate from its role in bank supervision, and would create a built-in exit strategy from unconventional policy.

Japan Privately Questioning ECB’s Currency RhetoricWSJ
Japanese officials are privately voicing their frustration at Europe’s attempts to talk the euro down against other currencies, a move some of them see as hypocritical.

Fed’s Bullard Says First Rate Increase Could Come Late in 1Q 2015WSJ

Fed’s Yellen: Small Businesses Deserve ‘Considerable’ Credit for RecoveryWSJ

Inflation Measures Show Increase, but still Low year-over-year in April – Calculated Risk
UMich Confidence Tumbles, Misses By Most In 8 Years – ZH
Preliminary May Consumer Sentiment decreases to 81.8 – Calculated Risk
Housing Starts at 1.072 Million Annual Rate in April – Calculated Risk
A few comments on Housing Starts – Calculated Risk

Australia’s Central Bank Not Interested in Targeted Steps to Cool HousingWSJ

China’s Ghost Cities Are About to Get SpookierWSJ

Macro Horizons: More Data to Back the ECB Doves’ CaseWSJ

Grand CentralWSJ
Hilsenrath’s Take: Rosengren Sizes up a Disappointing First Half * Soft Economies Have Policy Makers Groping for What to Do Next * Kuroda Keeps BOJ Easing Hopes Alive * Japan Questioning ECB’s Currency Rhetoric * Former Bush Economic Adviser to Join BOE Rate-setting Committee