With Greece experiencing political instability & embarking on a slow banking run, attention must be paid to other — more important — countries.
While the exit of Greece from the Euro may be of great importance to the Greeks, it won’t make much difference to the rest of Europe. However, what does become critical is preventing “follow on” — breaking the chain of dominoes, before failure ricochets across Europe.
Spain’s banking sector is in trouble, and with it likely next after Greece, action is needed now. The future of the Euro, may well play out in front of us over the next 2 months…
The European Central Bank has stopped providing liquidity to some Greek banks as they have not been successfully recapitalized, the ECB said on Wednesday.
Greek banks have been experiencing strong withdrawls of euro (800 million per day), as citizens prepare against possible exit from the euro & devaluation of their deposits. Continue reading
Since the financial crisis broke in 2008, there has been economic confusion as to what policies, if any, will help US and European economies recover.
Spending cuts, or ‘austerity’, have been strongly advocated; by Republicans in the US, by Britain’s Conservatives, and by Germany. This school of thought believes that ‘confidence’ must be restored, for growth to resume.
Yet historical experience shows a different picture. Continue reading
For decades, even during the depths of Communism, Europe has enjoyed a safe & mutually advantageous relationship with Russia — over energy.
Despite the deep differences & the vast chasm between Western and Soviet ideologies during the Cold War, both parties were able to form a reliable trade relationship. Russia needed the flow of hard currency, while Europe depends on gas during winter.
Yet now, Russian foreign policy pursues a different strategy. Can Europe safely rely on natural gas, to stay alive each winter? Continue reading