In the presentation I gave last month on potential euro breakup scenarios, I flagged the introduction of capital controls in a euro-area member as an important step along the road to a potential breakup. Well, they are here in full today in Cyprus. Thoughts here.
My reaction to the final agreement on Cyprus including a link to an op-ed I wrote for the Irish Times.
From the New York Times’s special “Missing the Point” unit comes “For Euro Zone, a Cyprus Exit Would Have Little Impact”. My response (in the form of an Onion-style story).
My latest thoughts: Is Draghi really going to save the euro after this week’s events.
I’ve updated my TARGET2 paper. Here is a post with a link to the new paper and a discussion relating to a potential exit of Cyprus from the euro.
Despite the absence of any panic today at European banks or in financial markets, I believe this weekend’s decision on Cyprus may cause serious trouble in the coming weeks and months. Comments here.
A quick reaction to the Cyprus deposit levy here.
Some thoughts on Olli Rehn’s recent letter to European finance ministers on the “unhelpful” IMF research on fiscal multipliers.
I’ve been very busy because of personal and professional commitments over the past few weeks and haven’t had any time for blogging. I’m planning to post some stuff soon (starting with comments on the promissory note deal). Here‘s a post that discusses a talk I gave on Friday at a Chicago Booth workshop called “How Costly Would a Euro Exit Be?”