The tweet reads “High time for a parliamentary investigation into the euro.” Could they be talking about Greece?

For indeed, doubt was thrown on Greece’s continued membership just yesterday, by Finance Minister Varoufakis, in the event that Eurogroup ministers refuse to accept Athens’ own ideas about how to deal with its tremendous burden of sovereign debt. This despite that fact that there is no mention in the treaties underpinning the Eurozone for any member leaving it, much less any prescribed procedure. Still, there is neither any authorization nor prescribed procedure for, say, giving birth during a transcontinental airline flight, yet that does happen from time to time; if/when the emergency arises and Greece just has to return to the drachma, they’ll surely find some way to do it, with or without formal EU treaty provisions.

In any event, this tweet (from the right-wing Dutch political blog Dagelijkse Standaard) does after all call for a parliamentary inquiry, and cuts closer to home. This is a petition directed to the Netherlands parliament, initiated by a group of political commentators led by a certain Thierry Baudet. Still only in his early 30s, Baudet already has a string of publications to his name, most of them in a Eurosceptic vein, decrying the threat to the nation-state posed by the super-national European institutions. More directly relevant, he also succeeded back in 2013 in having a referendum submitted to the Dutch Tweede Kamer – that is, he gained more than the 40,000 signatures required to put it to the attention of the parliament – which was to be “concerning the future of the Netherlands within the European Union.” The Tweede Kamer did duly consider the proposal, then rejected it.

Unsurprisingly, the group behind this latest proposed referendum has its own website, complete with a dedicated page to “Why a parliamentary inquiry over the euro?” Key to their argument is their assertion that it was assumed Northern European lands would allow themselves to become responsible for the fiscal failures of Southern European lands.

Despite what was claimed later, this perverse mechanism was amply foreseen by politicians. As Romano Prodi, president of the European Commission at the time when the Maastricht Treaty was concluded, said, “The difficult moments were predictable. When we created the euro, my complaint as an economist was (and I discussed this with Kohl and with other heads-of-state): how can we have a common currency without shared financial, economic and political pillars? The answer was: for now we have made this leap forward. The rest will follow.”

And:

It continues to surprise us how it could have been possible for such a radical decision to be paired with such little critical debate. What role did the government play here? How is it possible that politicians did not take more care over the financial stability of our country? What did those involved know precisely about the risks? And what did they not know? . . . Did people realize that this euro eventually would make necessary a very great transfer of power over to Brussels – such as the banking union, the stability pact and the upcoming budgetary union?

So they want the Dutch parliament to look into such questions, obviously with a view towards taking further concrete measures should unsatisfactory answers be revealed.

First of all, again, there is no explicit procedure available for any country now using the euro to ditch it for another currency – although, granted, that procedure can be made up on the fly, but surely not with great accompanying financial and economic chaos. More importantly, although this conservative group can probably once again get their 40,000 signatures to bring this measure before the Tweede Kamer as well, the question of the Netherlands in the euro is surely settled for now. There is no sign at all of any truly widespread political rejection by the Dutch populace of the common currency.

Indeed, economic analysis has tended to show that the euro has greatly benefited those Northern European lands heavily involved in trade and able to keep their labor costs in check – such as Germany, especially, but also the Netherlands, both of whom have seen their terms of trade steadily improve since the introduction of the euro in 1999 against Southern European lands with less ability to hold costs down. This widening gap between those advantaged and those disadvantaged by the euro contributed substantially towards getting everyone in the sovereign-debt mess we find ourselves in now – well, except for Germany and the Netherlands (again), plus a few other Eurozone countries (and Denmark) who find that they can actually ask borrowers to pay them to take their money on loan these days, rather than actually pay positive rates of interest.

This initiative must therefore be counted as merely a cry from out of the Dutch conservative wilderness. To the extent anyone takes it seriously, it is surely not constructive, in that doubts concerning any Eurozone member’s commitment to the euro are not useful just now as that grouping has to decide what to do about Greece’s new governing regime and its demands to cut down austerity. It’s rather the Greek people who need to examine the depth of their commitment to the euro, and thereby their level of support for future negotiating maneuvering by their Syriza government which we can surely expect more of in the near future

Mark your calendars: there’s a serious Eurocrisis coming up, specifically on January 25 when Greece holds elections and the anti-austerity Syriza party will likely come out on top. There’s even a serious argument to be made that it should come out on top, made among others by Economics Prof. Yanis Varoufakis of the University of Athens, who has gone so far as to offer himself up as a Syriza candidate.

He explains why he did that, and what is going on between Greece and the EU generally, in an excellent segment that I’ve embedded for you below (starts at the 4:00 mark). Do keep in mind that, generally speaking, we should all be suspicious of anything coming out of RT (= “Russia Today,” brought to you by Vladimir Putin), and it is easy to be dismayed by the blonde-airhead TV anchorwoman. But this is truly very informative.

(H/t to Yves Smith at Naked Capitalism.)

In this space we recently covered a new political party in Germany dedicated to discarding the euro. But what happens when the same thing happens from the other end of the EU’s economic spectrum?

#Grecia: nasce Drachma Movimento Democratico Cinque Stelle, il Beppe Grillo greco: “Basta austerità” #m5s http://t.co/fQaN9kp0XO

May 20, 2013 12:12 pm via The Huffington PostReplyRetweetFavorite

@HuffPostItalia

L’HuffPost

Yes, you see “Beppe Grillo” there in that tweet, which is written in Italian, and it’s certainly true that Grillo’s “Five Star Movement” is anti-euro. But I’m talking here about a new Greek party, one that was registered by the Athens authorities only last May 2, namely the “Drachma Five Stars Democratic Movement” which in its very name pays homage to Grillo’s Cinque Stelle (= “Five Stars”) movement.

What does this new party want? Mainly a referendum in Greece over whether to stay in the Eurozone. But it does have a formal five-point program:

1. Renunciation of the Memorandum signed with the “troika” (EU, European Central Bank, IMF) which has imposed the current austerity policy in return for financial help;
2. A return to the drachma;
3. “Self-development” (meaning unclear);
4. Social justice; and
5. National dignity.

This piece by Gabriele Vallin in the Huffington Post’s Italian edition does not indicate how much popular support this “Drachma 5-Star” party has attracted, but again, it’s brand-new. It does feature an interview with the party’s founder, Theodore Katsanevas, Professor of Labour Economics at the University of Piraeus. (more…)

If you haven’t noticed – and it’s likely you have not, attention has now moved on elsewhere – the financial task for Cyprus is now quite a bit steeper than was the case at first (that’s from the FT, so in English; free, but registration required). We had been talking about the country being asked to contribute €7 billion to get a €10 billion bailout; now the tab has risen to €13 billion for that €10 billion bailout.

Among other things, this is going to mean an even BIGGER hit to those holding accounts in excess of the €100,000 threshold at the island’s two biggest banks. Yes, many of these are Russian nationals. So that now, as Die Zeit reports, the Cypriot government has come up with a scheme to at least offer an easier path to EU citizenship for high-net-worth individuals.

The Die Zeit piece (no byline) states right off that this measure is meant as outright compensation for confiscation – i.e. for the monetary losses these people are incurring as Cyprus tries to grab the money it needs. And indeed, it further reports that President Anastasiades first announced the measure in a presentation he made yesterday before a group of Russian businessmen in Limassol (Cyprus’ second-biggest city, so filled with Russians that many just call it “Limassolgrad”!).

But does this move make sense? How receptive were those Russian businessmen likely to have been? “OK, you’ll never be able to trust our banks ever again, but do stay anyway for the sake of the nice warm Mediterranean sea-breezes and
the souvlaki!” (more…)

You’ve heard about the latest EU member-state to get in line for bailout assistance, right? It’s small, but it’s financial needs are anything but. It’s Cyprus. But it’s also a beggar with a difference, namely a rather too-close relationship to Russia.

Schuldenland: Zyperns Trickserei mit Russen bringt EU in Rage http://t.co/xZO5vzNJ

July 9, 2012 3:31 am via SocialFlowReplyRetweetFavorite

@weltonline

Welt Online

Germany’s Die Welt has a great run-down of the situation on that Mediterranean isle, so far-flung that it might as well be considered Middle Eastern. But no, as of 1 May 2004 Cyprus has been an EU member-state, as of 1 January 2008 in the Eurozone. And as of a week ago last Sunday it is EU Council president! This despite all the international intrigue swirling around it, as sketched in this Die Welt piece, which reads like something out of a spy novel. (more…)

As much as everyone may desire it, it may ultimately prove impossible to separate the Euro 2012 Football Championship from wider political matters of the real world. We already saw last Friday, with Germany-vs.-Greece, a football game already fraught from being a tournament quarter-final, after which the loser would be sent home, gain even more of an edge from geopolitical considerations, as the Greeks were especially anxious to gain a bit of revenge against the country whose financial hard-heartedness many of them see as responsible for their current economic meltdown.

Alas, they did not get their wish. But consider: now that we know the results of the first semi-final it is clear that, having already beaten Greece, the German team’s path to the European championship now lies in beating Italy, and then beating Spain in the final – “PIGS” countries all of them! These are the post-WWII Germans, though, you must remember, so that inevitably the question is arising: Given these circumstances, should Germany be allowed to win the 2012 European football championship even if it can?

Patriotismus-Debatte: Darf Deutschland Europameister werden?… http://t.co/nMRN8LhD

June 28, 2012 11:41 am via SPIEGEL ONLINEReplyRetweetFavorite

@SPIEGEL_Politik

SPIEGEL Politik

That’s literally the question Spiegel writer Jan Fleischhauer poses in the title to his opinion-piece. His lede:

The Left is again afraid that foreigners don’t find the Germans nice enough. Some even wish for a defeat of the national football team against Italy. But Germans are much more popular with foreigners than most think.

Yes, apparently this continued feeling of shame and unworthiness is to be found primarily among Left- and Green-inclined German voters, some of whom have taken to stealing German flags sticking out of cars and leaving behind notes accusing those drivers of fostering nationalism.

This is comical stuff, although it does seem to be really happening. But it’s so unnecessary because, as Fleischhauer points out, in reality Germans are currently riding an extraordinary wave of popularity (which apparently goes for the kind of football they play as well). He cites a recent Pew Research Center study showing that Germans are admired by all other Europeans for their honesty and hard work. Chancellor Angela Merkel has profited from this to become rather popular throughout the continent herself – other than among the Greeks, that is.

But there is a larger point here, and once again it relates to “real life,” specifically the enormous financial crisis with which the continent is now wrestling. Everyone is now earnestly looking to Berlin to fix it! What, should we instead turn to Paris and François Hollande? Perish the thought! No, if anyone holds in their hands the solution to this financial turmoil and uncertainty, it’s the Germans (largely by being willing to pay to clean up other countries’ messes, it has to be acknowledged!). For Heaven’s sake, let them step up and do that – and should they win Euro2012 along the way, then that is no problem.

UPDATE: It’s no problem, alright: Germany 1, Italy 2!

One could opine that the clear assumption in Fleischhauer’s article that the German team would of course win the semi-final and go on to face Spain in the final reflected a certain German arrogance. But then we would be dealing here with a strange mixture of arrogance (“Of course we’ll win”) and humility (“But should we be allowed to?”).

Politically, this has been a most eventful week in the Netherlands. As we head massively onto the streets today in our orange apparel to celebrate the QueensDay holiday, many of us will drink and dance in the sunny weather in part simply to forget the experience of the government falling, followed by the cobbling-together by a hastily-formed temporary coalition of a budget-cut package to meet EU demands.

So yes, it has been a remarkable past couple of days. This, however, just goes too far:

Paul Brill: ‘Begint in Den Haag de Europese lente?’ http://t.co/LgHpwSBb #vkopinie

April 28, 2012 8:16 am via bitlyReplyRetweetFavorite

@volkskrant

De Volkskrant

“Has the European Spring begun in The Hague?” asks commentator Paul Brill – as in “Europe’s Arab Spring,” you understand.

Thank God for that question-mark, for actually going through his piece makes it clear that Brill is hardly sure himself that the answer is “yes.” (What we also might have here is a rogue third-party headline-writer; I understand that column-writers for periodicals – as opposed to bloggers – usually don’t write their own headlines.) What makes Brill (or his headline-writer) think of the Arab Spring is the series of “No!” gestures to the EU austerity regime – mostly being pushed by Germany – now in the cards. You have the French presidential election run-off next Sunday, which according to most polls will elevate François Hollande to that position, who will then reject the EU’s new Austerity Pact. On the same day there will be national elections in Greece, and polls there forecast a defeat for the PASOK and New Democracy parties – now ruling in a grand coalition, but for decades the two main competing parties representing (respectively) the Left and the Right on the Greek political scene. As of next week they will likely be superseded by brand-new parties, all of them promoting resistance to the terms of Greece’s bail-out from the IMF, EU and ECB.

And then the Netherlands: Once seen as reliably in Germany’s austerity camp – indeed, Finance Minister De Jager has made quite a name for himself as scourge and hector of those irresponsible, debt-ridden Southern Europeans – this country effectively made its first substantial anti-austerity gesture with the collapse of the government, brought about when the right-wing, populist PVV party would not go along with the budget cuts being proposed. Yes, as stated, enough budget cuts to satisfy the EU were ultimately approved anyway via a one-time reshuffling of the political deck, but the fact that the PVV was effectively part of the governing coalition (it “tolerated” it, i.e. promised not to vote against it on important matters) meant that there would have to be new elections (in early September), to form a new government.

Notably, a couple of important parties held themselves aloof from those budget cuts, namely over on the Left in the forms of the Labor Party (PvdA) and the Socialist Party. The strategy here was clear: they won’t be tainted by those budget cuts in that election, so that a vote for the Left offers a means for the Dutch electorate to vote against budget cuts and austerity, and basically to join the likely French and Greeks “No!” against the EU austerity regime.

So that is what is really going on here. The Greeks and the French seem unlikely to accede to German demands for EU member-state austerity as the best way out of the financial and sovereign-debt crises. But the Dutch – the Dutch! those traditional lap-dogs of the Germans! – now seem quite likely to do the same. If they do that, however, they’ll do it in September, so forget about any “European Spring.”

For that matter, let’s give the peoples of Tunisia, Egypt, Libya, Syria, etc. some proper respect for what they have accomplished/are accomplishing and simply drop any further hyperbolic talk about a “European Spring,” “Autumn,” or anything else. The Europeans have their own notable Days of Revolt to their credit in history, but they were back in 1789, 1848 and (to the East) 1989, and certainly not today.

Don’t look now – but Italy is no longer at the center of Eurozone fears. Indeed, the interest rates the government there pays on its debt are now back down closer to the “normal” rates of old. And this all has to do with Mario Monti, installed as the “technocratic” prime minister only some four months ago:

Neuer Politikstil in Rom: Monti und die Millionäre mischen Italien auf… http://t.co/hd2d9zW6

March 20, 2012 7:08 am via SPIEGEL ONLINEReplyRetweetFavorite

@SPIEGEL_Politik

SPIEGEL Politik

Yes, the grand-daddy of German newsmagazines, Der Spiegel is impressed – or at least writer Hans-Jürgen Schlamp and his editors there are. Could it be that, somehow, Italy is turning itself around precisely by becoming a bit more “German”?

Not really – unless you’re referring to “German” as in “Third Reich” (and we know you are not). For the striking thing about this article is how undemocratic that country has come to be. It’s the politicians in the Senate and Chamber of Deputies who were elected, after all; neither Monti nor the rest of cabinet ever were. Yet these days, they get what they want. Schlamp’s piece leads off with the tale of this government’s current attempt to curtail workers’ protection against being fired. Since forever that has been out of the question – the Left there, always strong whether actually in power at the national level or not, would never allow any such thing. Yet now it’s the Labor Minister, Elsa Fornero, who is warning the unions “We can’t negotiate forever,” meaning that they better finally show some “give” on the issue or the government will just take the measure it wants passed to the legislature anyway – and probably get its way.

The basic problem is that, while it’s true that these legislators were elected, it was largely they who brought the country to the brink of default and economic collapse in the first place. Voters know that they messed things up with who they chose.

Which then also means that there is going to be a problem when this “technocratic phase” comes to an end, which will happen at the latest when the next national elections come around next year. How do you profile yourself to your voters when you’re just giving the unelected government everything they demand – because you know full well that’s what those voters now want? It would be no use refusing: the country’s in trouble, haven’t you heard?, so you would just get yourself irredeemably in their bad graces. But everyone else is simply deferring to the government as well.

Naturally, this situation is the worst of all for what is left of former premier Berlusconi’s party, considering the way he was driven from office in disgrace. According to Schlamp, those politicians are very confused: “Many see their political survival linked to the return of their former Leader [the article does actually use here the infamous term Führer]. Others consider that to be the worst of all [possible] variants.”

Nonetheless, decision-time will come, because Mario Monti and his Merry Men aren’t going to stick around forever. He has already made it clear that he’ll head back to his professorship at Bocconi University (Milan) after those 2013 elections. And anyway, Italy is a democracy: it’s supposed to have a proper, democratically legitimate government.

UPDATE: Whoops! Did Herr Schlamp – and, by extension, I – write too soon?

Italy’s largest trade union, the CGIL, says it will hold a general strike over plans to reform employment laws http://t.co/UWabccdF

March 21, 2012 4:20 pm via BBC NewsReplyRetweetFavorite

@BBCBreaking

BBC Breaking News

One famous result of that climactic, all-nighter European summit of last 26/27 October was that Greece’s creditors would have to accept a 50% “haircut,” i.e. resign themselves to getting back only half (approximately) of the value – principal + interest – that they thought they were going to earn when they first loaned the money. But what does that mean exactly, in terms of specifics? Well, that’s going to depend on negotiations between Greece and those creditors – and from a certain little dog we get an early tweet about how those might look:

http://t.co/eNBpc2Z7 Anleihentausch Griechenland verhandelt mit Gläubigern http://t.co/OjCQUDp4

November 15, 2011 11:30 am via HootSuiteReplyRetweetFavorite

@luxembourg_news

news luxembourg

Yes, it’s fitting that this is a little Luxembourg dog! (Actually, the piece to which it links – with the second link, not the first – itself passes on the original scoop from the Greek newspaper Kathimerini, via Reuters. But unfortunately we don’t do Greek here at €S.)

Here are the alleged options on the menu:

• Per €100 of debt, creditors will get somewhere between a €10 and €20 cash-payment; for the rest, they get between €30 and €40 (again, per €100 of debt) in a brand-new debt security with a term of between 20 and 30 years and yearly interest of about 6%.
  
• OR else they could have just €37 per €100 debt wiped out entirely and for the rest get a 15-year bond with interest “somewhat higher” than 6%. That sounds a bit better, yes; that’s the proposal from the Institute of International Finance (IIF) which is negotiating for the private creditors.

Many of you reading this blog must surely also subscribe to, or at least read regularly, Paul Krugman’s NYT blog The Conscience of a Liberal. It admittedly blows this blog away in influence terms, as it is currently ranked #41 on the Technorati list. But is the Nobel prize-winning Princeton economist as ready to bring forward the often piquant opinions resulting from his economic analyses away from home, so to speak, i.e. when on some forum than his own blog?

Of course he is! Lately what has been dominating the economic front has been the Eurozone, especially Greece and Italy. Even when interviewed by a leading German newspaper, Krugman does not hold back, as we can see in the extended interview published on-line by Die Zeit last Friday: “The euro will mutate into an extended Deutschmark”. (more…)

Greece prime minister Papandreou announces a referendum over the anti-bankruptcy aid package for his country announced at last week’s EU summit – and all hell breaks loose on world markets!

#Referendum in #Griechenland: #Papandreou riskiert eine globale Finanzschmelze http://t.co/Q5z7zEYw #Geld

November 1, 2011 2:39 pm via bitlyReplyRetweetFavorite

@weltonline

Welt Online

Yes, every other newspaper is writing about this as well, but this particular Die Welt article, by D. Eckert and H. Zschäpitz, stands out for its headline: Papandreou risks a global financial meltdown, or rather the alarm such a headline evokes in contrast to the serious, mainstream sort of paper we all know Die Welt to be – i.e one that doesn’t usually resort to such headlines. Yes, there are no doubt similar-sounding titles in tabloid papers, and not just in Germany, but all that is mere dog-bites-man.

This piece also stands out for the handy list it provides – you have to scroll down a little, look for Die größten Wertverluste . . . – of the banks which have lost the most market-capitalization, so far, from the plummeting prices of their shares. FYI, BNP Paribas stands at the top, with nearly €4.7 billion lost, followed by Deutsche Bank. (It also stands out for author “H. Zschäpitz”: isn’t that just a howler of a name? But no doubt the fellow has a Google Alert on it and will be reading this blogpost sooner or later – my apologies!)

Otherwise, though, I stand vulnerable to the charge of European tokenism. Because the piece that has really clarified things for me is in English, and written by our old friend Dana Blankenhorn. Greek Latest is Solar Scam is its title, it does spend a few paragraphs dissecting the faulty economics behind a Greek solar-energy investment plan. But then it addresses what Papandreou and the Greek authorities are really trying to do with this referendum. Given that Blankenhorn assumes that the result will be “No,” it’s simple: they are threatening to take the rest of Europe to down with them, unless they get an even-better debt-relief deal than the 50% they got from the EU last week.

You should check it out, and the article from Seeking Alpha that Blankenhorn links to as well. Strangely, his link to it reads “Sink the euro” even though that other article itself argues that there is still a chance for a “Yes” vote!

Sure, it’s the cheap, easy, cynical view to adopt that the bail-out/splintering of the French/Belgian/Luxembourgish bank Dexia, worked out over the weekend, is just going to be the first of many such episodes. Then again, it’s also the de rigueur statement for any finance minister involved to make under such circumstances – “No, I don’t think so, certainly not French banks” – such as that which French finance minister François Baroin uttered when asked by reporters if there would be any others.

Of course there will be others. For heaven’s sake, there were already two others (i.e. European bank nationalizations) happening even as Dexia hogged the headlines the past few days. (Details here, in English: namely a Greek bank – surprise! – that was nationalized after getting in trouble over money-laundering, and a Danish bank that made foolish real estate loans.) And now we have further explicit confirmation of this from Kleis Jager at the Dutch newspaper Trouw: French prepare in secret for more misery.

Topped by an unfortunate photo of current (unelected) Belgian Prime Minister Yves Leterme and France’s PM François Fillon with sly, conspiratorial smiles on their faces, Jager’s piece tells of how, even before Dexia, the French government realized that it needed to get ready to save at least “two or three” big banks – preferably by forcing them to sell themselves to outsiders with big money.

(Just as Luxembourg did with its part of Dexia, selling it to the Qataris, for example. You’ve got to admire the Luxemburgers, though – on the very Sunday (9 October) that Dexia was collapsing, finance ministers were feverishly meeting, and Qataris were presumably being wined-and-dined, they were also holding their national elections!)

Wait, you want names? No problem: according to Trouw, the French had in mind specifically BNP Paribas, Société Générale and Crédit Agricole as the banks where they would need to intervene. No Dexia on that list! But all of these have done good business through the years – “good” so far – providing loaned money to not only Greece, but also Spain and Italy.

To be fair, this is not Jager’s scoop, but rather one he credits to the French paper Journal du Dimanche. BNP Paribas and Société Générale immediately issued denials once the latter had published its report. But I refer you again to Finance Minister François Baroin’s comments cited above.

So, what the Flemish paper De Morgen calls Europe’s koningskoppel (“royal couple,” namely Chancellor Merkel and President Sarkozy) met yesterday in Paris to try to find some solutions for the ongoing European euro/sovereign-debt crisis. What did they come up with?

Precious little, by most accounts. Perhaps that was the best to be expected, given how hard it is to get anything done in most parts of Europe in high summer-holiday season, and the fact that both, in effect, had terminated their own vacations early to meet.

(And no, rest assured that Chancellor Merkel does not regard such trips to the City of Light as recreational in any respect. Still, from the various photos emanating from that summit – check out for example this one from the De Morgen piece – one could even get the impression that they have become more comfortable in each other’s presence, something that was a problem before, as has been noted in this space.)

Continuing the beach theme, here’s one reaction, from Het Laatste Nieuws:

#geld Merkel en Sarkozy strooien zand in de ogen van de mensen: De plannen van de Franse president Nicolas Sarko… http://t.co/1cJEZ9c

August 17, 2011 8:41 am via twitterfeedReplyRetweetFavorite

@HLNlive

HLN Live

“Merkel and Sarkozy throw sand in people’s eyes” – but who is saying that? The HLN editors? No, that comes from former Belgian premier (now in the European Parliament) Guy Verhofstadt. He’s sort of a nerdy political guy – there’s a great shot of him in that HLN article, together with yet another shot of Merkel and Sarkozy posing happily together – but has been a prominent figure on the Belgian political scene for quite a while, and on the European level is mainly known as a convinced federalist. (more…)

Here’s a bit of bald Twitter self-promotion for you:

If you weren’t alarmed enough yet by the European situation, try this interview on for size (use Google Translate): http://t.co/K6EyrTs

August 16, 2011 4:23 am via webReplyRetweetFavorite

@B_Eichengreen

Barry Eichengreen

Turns out that the interview in question is of UC Berkeley Prof. Barry Eichengreen himself, conducted by Die Welt writer Tobias Kaiser. (That link in his tweet opens a PDF of the interview. Of course it is in German, but no need for Google Translate when you’ve got the EuroSavant!)

Well, who among us who publishes on the Net can ever be immune from such cross-posting temptation? Besides, he has some interesting things to say on the current transatlantic debt crises, and his piece was even retweeted, and so implicitly endorsed, by Doctor Doom himself.

Prof. Eichengreen emphasizes that, whatever else might be going on currently in the Eurozone, Italy and Spain must now be the focus of policy-makers’ attention. That is not so insightful per se – German Chancellor Angela Merkel is in Paris today to meet with President Sarkozy and presumably the public finances of those two ailing Mediterranean states will be high on their agenda. (Not that top-level officials from either will be present; that’s not always necessary when the EU’s two big powerhouse-states are having discussions.) (more…)

Amid all the brouhaha about S&P downgrading its rating for US Government debt, the parallel ongoing crisis in Europe should not be forgotten. “Crisis”? Take it away, Nouriel:

Definition of “crisis”: when officials need to huddle up on a weekend before Asia opening to take decisions & do statements a turmoil rages

August 6, 2011 1:43 pm via webReplyRetweetFavorite

@Nouriel

Nouriel Roubini

The Czech daily Mladá fronta dnes, as caught by the @Zpravy Twitter-feed, has the details on this particular edition:

iDnes: Lídři EU chtějí rychle realizovat závěry summitu. Uklidní tak trhy: Vlády musí urychleně dokončit dohody … http://bit.ly/oLaqvt

August 6, 2011 11:30 am via twitterfeedReplyRetweetFavorite

@Zpravy

Zpravy

Turns out, if you like, that you can blame everything on European vacation syndrome (e.g. “No one touches my August holiday!”): EU leaders want to quickly carry out changes from summit, that way they’ll calm markets is the headline here.

• “Summit”? That’s the one they just had, of course, an extraordinary convening in Brussels on July 21 in reaction to the Italy/Spain funding troubles.
• “Changes”? That has to do with the European Financia Stability Facility (EFSF), which leaders at that summit agreed would be beefed up to better be able to intervene to assist eurozone member-states in financial need, eventually even becoming a sort of European Monetary Fund.

(more…)

As turmoil continues to grip European financial markets at the prospect of a sovereign default by Spain or even Italy, the emergency Euro-summit scheduled for Thursday this week is looming large in importance. This is all the more true in view of the fact that European Council President had tried to get everyone together for a summit last Friday – but no one was interested then, even as market rates on Italian debt skyrocketed.

The key figure at the summit, as always, will be German Chancellor Angela Merkel, fresh and possibly even slightly sun-tanned off an official visit to various African countries. Just as she is preparing for Thursday’s meeting, however, scattered press speculation has arisen to the effect that Helmut Kohl – the German Reunification Chancellor, and probably the mentor who did most to make Merkel what she is today – now cannot hold himself back from criticizing her Eurodebt policy. Die macht mir mein Europa kaputt! is the catchy quote from Kohl – “She’s destroying my Europe!” – and it comes from a fairly reputable source, namely the German news-magazine Der Spiegel. Ed Harrison over at Credit Writedowns identifies this Spiegel article and provides his own translation. (more…)

Sorry – it’s the Olympics again! I swear that I’ll go find some other hobby-horse right after this post, but I just happened to come across an article in El País – and you know I don’t ordinarily discuss the Spanish press – with the irresistible title Olympic Dream Maybe, But “Low Cost”, by Bruno García Gallo (the “rooster”).

You’ll be glad to know that this is not about the Winter Games again (although with the tropically-situated Sochi, Russia having won them for 2014, why not?), but rather the 2020 Summer Games. And yes, Madrid is still interested in those even after having lost in the last two Summer Game bids – somewhat. Polls showed a full 91% of madrileños were behind the city’s bid for the 2012 Games, as compared to only 68% of Londoners. But the latter won anyway. It was a similar situation for the 2016 Games, which Madrid nonetheless lost to Rio de Janeiro. Still, as of last year at least 54% are ready to have a go again, as are all the city’s leading politicians. (more…)

Don’t look now, but another EU sovereign debt crisis is creeping up. This can be seen in the effective interest rates currently paid for the obligations of the usual problematic countries – Greece, of course, along with Portugal and Ireland, but also Italy and Spain. The last-named had hoped that it had made it out of the woods – mainly by means of various public-spending austerity measures – and so Spanish financial experts are particularly aggrieved now that it seems the country’s painful fiscal virtue is threatening to be all for naught. One such, C. Pérez of the Spanish newspaper El País, knows who is to blame and issues his accusation today: Berlin sows doubts about debt and the contagion reaches Spain and Italy.

It’s almost like what happened back when the EU sovereign debt crisis first broke in January, after the new Greek government took office and felt obligated to announce that the country’s debt and fiscal situation was much worse than the previous regime had led everyone to believe. Then, Germany for a long time resisted coming to Athens’ assistance, and thereby succeeded in little more than spreading doubts about their fiscal probity to Portugal, Ireland, and Spain as well, before finally in May rallying Eurozone countries to set up a huge and unprecedented EU sovereign debt support fund.

This time the story is slightly different, although the Germans are still the villains of the piece. It has to do with the proposal Finance Minister Wolfgang Schäuble recently unveiled for the establishment of a mechanism to deal with future sovereign debt crises: first, a program of intensified fiscal austerity for the deadbeat country, accompanied by a mandatory lengthening of their debt’s maturity date; then (if that does not work to calm investor fears of a default) intervention with EU funds, but with required provisions for the lenders to get back less than they are otherwise due, i.e. to take a loss on their investment. Schäuble: “The EU was not created to enrich financial investors.”

All that seems reasonable in itself, but in the first place the Germans here are explicitly raising the prospect again of sovereign defaults. That’s supposed to be unmentionable, and when it is mentioned it tends to make investors sit up in alarm and take notice. More importantly, though, the German proposals also amount to a change of the rules of the game for lending money to Eurozone countries; for one thing, before this investors weren’t expected to have to take a loss if the EU and/or IMF had to come in to cover the debts (and the later maturity date is not something designed to thrill them either).

Given that this is the proposal being pushed by Germany, the EU’s paymaster, these investors are naturally adjusting their expectations for such a near-future development now: the Greek, Portuguese, Irish, Spanish and even Italian debt they are holding no longer seems quite so attractive in the light of this likely rules-change, and so we see the effective rates on those debts lately rising up dangerously to levels potentially high enough to ensure that, in effect, they never can be repaid by those countries themselves.

The result: in trying to address the problem of how to handle sovereign debt crises in the future, the EU has come close to bringing about such a crisis in the here-and-now, and has plunged countries which had thought themselves at least on the margins – namely Spain and Italy – squarely back into the danger-zone. It’s no wonder they’re not happy about it. Unfortunately, there’s a limit to how much of substance can be accomplished by secret consultations among the EU member-states. Such a crisis was probably inevitable, given that top EU leaders refused to simply stick their heads in the sand and pretend that such serious international financial trouble could never come around again.

The brief of this EuroSavant weblog, as all familiar with it know, is normally pieces from the European press written in some language other than English. Then again, there’s always room for the rare exception. Consider:

For four months Belgium has been without a government, its public debt is approaching 100% of GDP and the spread of Belgian 10-year bonds over the German benchmark is today three times as high as at the beginning of this year. Is Belgium the next country with a sovereign debt crisis?

As if the EU needed another such problem! Nonetheless, with the political system there seemingly unable to form a government, with a national split-up now a real possibility – the option is now being discussed in Walloon (French) circles as well as Flemish ones – who’s going to take care of payments on its ever-expanding sovereign debt?

The analysis, by Susanne Mundschenk and Raphael Cottin for EuroIntelligence, is a couple weeks old but still definitely worth a (belated) mention, as is the accompanying 10-page PDF document that goes into even more detail. All are in English.

Never heard of him? No, I don’t mean Dr. Demento. “Dr. Doom” is the monniker borne (probably proudly) by NYU economics professor Nouriel Roubini, famous for foreseeing – among other things – the gigantic collapse in the US housing market beginning in 2007 that kicked off this worldwide Great Recession. Back then Roubini kept adding to his fame by forecasting further disastrous developments in one aspect of national or international economic performance after another; people would never believe him that things could get that bad, yet most times events proved him to be spot-on.

Now he has further comments which he contributed to the Financial Times. Unfortunately, that paper has a rather restrictive readership policy – i.e. it likes to force you to pay – but luckily we can resort to Denmark’s business newspaper Børsen instead. There it’s a brief piece, and Roubini’s message is clear, simple, and expressed in the title: The catastrophe commences on Tuesday.

Tuesday? That’s election day in the USA, of course, and according to Roubini that will unleash a new economic crisis because the Republicans are expected to make significant gains, recapturing control of the House of Representatives and maybe the US Senate as well. This will inaugurate paralysis in Congress as Democrats and Republicans block everything the other side tries to do, even as the US economic situation remains dire and in need of fiscal initiatives of one sort or another.

True, this insight is hardly blindingly original, and it has also certainly been advanced recently by other commentators, and then even rather more eloquently. (“In fact, future historians will probably look back at the 2010 election as a catastrophe for America, one that condemned the nation to years of political chaos and economic weakness.”)

Then again, everyone knows that Paul Krugman is a liberal (Nobel Prize-bearing) attack-dog. But this is the FT, Børsen – Dr. Doom, no less!

The scoop ultimately belonged to the Financial Times, but that article is ensconced behind their semi-porous paywall. So here at €S we had to get the news from Lidové noviny, from the Twitter alert by @cznews (Oh no! Not Rozpočtoví hříšnici!):

Rozpočtoví hříšnici v eurozóně zaplatí pokutu ve výši 0,2 % HDP: Země eurozóny, které v budoucnosti po... http://bit.ly/9X8tCn #czech #news

September 24, 2010 9:09 am via twitterfeedReplyRetweetFavorite

@cznews

Czech Business News

And a scoop it truly is, for the FT journalists (Peter Spiegel and Joshua Chaffin) have unearthed proposed “legislation” set to be officially unveiled by Economic and Monetary Affairs Commissioner Olli Rehn next Wednesday, which their article terms “the EU’s most ambitious attempt to reorder its economic governance since this spring’s debt crisis that nearly destroyed the single currency.” Basically, the Commission would step up to take up a role in examining the national budgets of the 16 Eurozone member-states in a big way, with the authority to impose fines of 0.2% of GDP on governments which “consistently fail to bring down their public debt levels” – or “fail to control their annual spending,” or “fail to reform their economies to improve their competitiveness.” Once having decided to fine a member-state, the Commission under the proposal could only be stopped by a qualified majority vote from the European Council within 10 days of the decision. (Similar rules for member-states still outside the Eurozone will apparently be forthcoming later.)

Even just ignoring recommendations about how to improve national competitiveness (from the Commission presumably; and so how can they really be described as “recommendations”?) could make a government liable to a 0.1% of GDP fine. And, somewhat ludicrously, the Commission would also maintain a productivity data “scoreboard,” sort of like the running list of grades on an elementary school classroom wall.

Pretty amazing – especially when those of us with any sort of historical memory (it need not go back any further than ten years or so) recall the Stability and Growth Pact that was a key component to the introduction of the euro at the end of the 1990s. That also prescribed monitoring of (Eurozone) member-states’ public finances by the Commission; and it also prescribed “sanctions” (initially fines) for those governments who continued to violate the fiscal rules (budget deficit less than 3% of GDP, national debt less than 60% of GDP or getting there) after repeated warnings.

But it didn’t work: among the first to break these rules were the giants making up the EU’s “axis,” namely Germany and France, and no one ever dared to try to punish them in any way. Besides, there was always the fundamental bit of illogic in such arrangements of trying to punish by means of a monetary fine a government which has gotten into trouble because it doesn’t have enough money available.

So Why Now?

What’s the difference this time, that makes Commission staff think that these sorts of proposals will be accepted, and that they even will work if enacted to influence member-state government behavior? Obviously it’s the big Greek/Spanish/Portuguese/Irish/etc. debt crisis of 2010, which in May prompted the panicked assembling of a €700 billion+ support fund for states in trouble with their sovereign debt. It’s by no means clear that that will be enough to head off trouble; it’s by no means clear, for example, that Greece will in fact be able to avoid default (or, probably, the same thing camouflaged as debt “restructuring”).

Neither is it clear that member-states will be at all receptive to these latest Commission proposals as they are formally presented next week (together with similar ones from Council President Herman van Rompuy). It’s hard to avoid the thought that this sort of supervision of their budget processes from an external, super-national body of experts, backed up by sanctions with financial teeth, was not what most if not all of them thought they were getting into when they joined the EU and then the Eurozone. That historical process of European integration is likely about to face a decisive “gut check” moment, coming up next week.

Enough of the levity (see previous). It’s time to get serious – even “apocalyptic.” Specifically, The apocalyptic cost of the collapse of the Eurozone, a recent entry on the blog of Libération’s famed Brussels correspondent, Jean Quatremer.

That article basically calls attention to a recent, publicly-available and English-language study from ING Bank (main writer: Mark Cliffe) entitled “EMU Break-up: Quantifying the Unthinkable.” It’s quite an eye-opener, and Quatremer has performed quite a public service in calling his readers’ attention to it. For the “unthinkable” when it comes to the euro has become quite a bit less so this year, including the two “unthinkable” extremes between which Cliffe structures his report’s analysis: 1) The departure from the Eurozone of Greece (only), and 2) The collapse of the whole thing, with the current member countries simply reverting to their currencies of prior to 1999. Both developments, and various others in-between, have increasingly been raised as distinct real-world possibilities, and not just as horror-scenarios but also as measures to be induced deliberately (particularly the ejection of Greece) as punishment for the fiscal failings of various naughty governments. (more…)

Today is “Stress Day” – the day when the results of the “stress test” exercises performed on all major European banks will be released after the end of the European business day (but right in the middle of the American business day!). The Financial Times column Alphaville has a handy round-up of articles on the subject, compiled by Gwen Robinson. The most comprehensive guide – perfect if you’re still unsure of what these “stress tests” are all about and have some time – is by far the contribution from Anne Seith of Der Spiegel. (Rest assured: it’s in English. As for Alphaville itself, better enjoy that while it’s still free and available to all!)

Then there is the report by Anne Michel in Le Monde, also cited in the FT Alphaville round-up. Why is everyone so stressed about these “stress tests”? Mainly because banks can only “pass” them or “fail” them, and failure could carry a high price in terms of loss of investor confidence, for starters. Indeed, the impact is likely to be even greater than it was for the ten banks (out of nineteen tested) which “failed” during the American “stress test” exercise carried out back in May, 2009, for banks that fail by definition need recapitalization and there is a dwindling number of European governments still able to provide that. It’s notable, as Mme. Michel points out, that European authorities have staged such “stress tests” twice before, namely dry runs in August of 2009 and April of this year with a more limited selection of banks, whose results have never been made public.

But this time it’s serious, and all results will be released publicly. Naturally, everyone would love to jump the gun and get word of at least some of the results before they’re released to the unwashed masses (there’s potentially money to be made, for one thing). Mme. Michel does her best to oblige. It looks like all the French banks involved – namely BNP Paribas, Société générale, Crédit agricole and BPCE – have passed the test. Indeed, the failures are expected to come only from the usual suspect nations: Spain, Greece, and Portugal. Oh, and Germany, too – but the one German laggard is likely to be the Hypo Real Estate Bank, which already got into so much trouble back in 2008 that the German government fully nationalized it. (Note that this last bit does not come from Mme. Michel’s article, but from another of my on-line sources.)

Going back to the star banking pupils from France, such seeming across-the-board success inevitably raises questions as to the stress tests’ legitimacy. The article does go into some detail about how the tests’ parameters have been toughened up to include some degree of sovereign debt default, placed on top of a posited recession of 3% negative economic growth lasting over a year-and-a-half. But will this go far enough to convince the markets that all this has been a worthwhile, bona fide exercise? That is probably what most EU officials and bank executives are stressed-out about most of all.

Sorry: this has nothing to do with doing-over the financial crisis of late 2008-2009 to get another chance to deal with it right, even only as it hit Belgium. Rather, I noticed from a piece by Bert Broens in that nation’s business newspaper De Tijd that two of the biggest domestic banks, KBC and Dexia, will have undergo so-called “stress tests” all over again right after they thought they were done with all that.

What these “stress tests” are all about is an auditing exercise whereby banks’ balance-sheets are subjected to a standard scenario positing a business downturn, meaning theoretically that more people would not be able to pay back their loans, there would be lesser demand for new loans, and the like, and so you see how the bank would do in such a situation – first of all whether it would even stay solvent and so survive (at least without receiving some sort of state aid). And, as stated, both these Belgian banks already did the exercise and came through it with OK results. But the whistles have sounded and the competitors are being directed back to their starting-blocks to do it all again, and for a good reason: those previous stress tests did not include checking for any situation in which government bonds held by the banks might not be fully repaid. That’s rather an important omission: we’re talking in particular Southern European (or PIGS, if you like) government bonds here, and KBC Bank alone has €60 billion worth of them in its portfolio.

How then could anyone have considered the previous stress tests, which did not account for those public obligations, anything but a waste of time? Well, many cynics (or call them analysts) have felt that the real purpose of such tests was in the first place as a propaganda exercise meant to return a comforting “All OK!” for each such bank tested to calm investors’ and markets’ fears. This whole “stress test” idea was taken over in the first place from the American financial authorities, who performed them on the big American banks in spring-summer of last year, and ongoing coverage particularly from the Naked Capitalism financial weblog not only blew the whistle on that American exercise but also has found serious flaws in the European stress tests happening now. In fact a major complaint (also put forward in a related financial blog here) about the validity of the European tests was their alleged failure to take into account such sovereign risk.

Broens’ piece shows that that at least is not happening in Belgium, although he doesn’t say why, like who decided to make these exercises a bit more bona fide and call back KBC and Dexia to do them “right.” His language is in the passive tense – “in the meantime it has been decided to expand the test” – although one first guess would have to be the Belgian financial authorities.

UPDATE: A new entry on Naked Capitalism tacitly concedes that these European “stress tests” will in fact include banks’ exposure to sovereign debt in their calculations. It then goes on to sketch the great worry resulting from that: What happens when these more-honest tests reveal that too many banks in fact stand in need of more capital, possibly from governments which in many cases are no longer in a position to provide the same?

You might have become aware late last week of a brief kerfluffle involving the new Hungarian government of Prime Minister Viktor Orbán. It didn’t involve Orbán directly, however, only some figures closely associated with him, such as another top figure in his FIDESZ political party, Lajos Kósa (mayor of Hungary’s second city, Debrecen), and Péter Szijjártó, his government spokesman, who together spread the word to the world at large that the Hungarian budget deficit was actually rather higher than previously reported and that their country could soon find itself in a simlar fix as Greece. This quickly led to a mini-financial panic breaking out the world over – including in Far Eastern markets, which suffered price-losses – at the thought that the EU suddenly had another fiscal basket-case member-state to deal with, one that moreover had already had a joint EU/IMF bail-out back in 2008.

“Sorry – did we say that? We weren’t really serious” was roughly the reaction from that same Hungarian government once they realized the wide-ranging storm their comments had unleashed. Clearly, the amateurs were now in charge within that government’s highest reaches, and you can get a quite informative treatment of the incident – with pictures of the major protagonists – from the realdeal.hu weblog. There writer Erik d’Amato makes a convincing case that all this was simply an attempt by the new government to position itself politically to impose some austerity measures in its upcoming budget, albeit one that went spectacularly awry.

But such incompetence cannot go unremarked upon for long, and as the Danish daily Politiken reports (Hungarians go off on top politicians’ mysterious pronouncements) feedback has now started to arrive. For one, the economics editor of one of the major national dailies, Zoltán Baka of Népszabadság, called last week’s pronouncements “completely idiotic.” The IMF chief, Dominique Strauss-Kahn, also told the Associated Press that, in his view, there is “no basis to be worried” about Hungary’s fiscal situation. Other European finance ministers, however, couldn’t be bothered to offer an opinion: they are busy these days trying to find a solution to the ever-weakening euro, whose recent downward course last week’s Hungarian mini-fiasco only served to accelerate.

. . . mainly to include the 500+ million European Union! That at least is the message of Libération Brussels correspondent Jean Quatremer in the lastest post on his Coulisses de Bruxelles, UE (=”Brussels Corridors”) weblog, entitled “Barack Obama, the president of the European Council (Potec).” The basic assertion Quatremer wants to make here is that Obama should get the main credit for the bold/desperate €750 billion emergency aid package that European leaders cobbled together last Sunday night – just after voting in the crucial Nordrhein-Westphalen German state election had closed but just before Asian markets started trading again on the Monday morning of a new week, you understand.

Sure, the President was nowhere near Brussels at the time. Still, in Quatremer’s view it was the key telephone calls he placed to the main decision-makers – mainly France’s Sarkozy and Germany’s Merkel, of course – that made sure something big and decisive would happen. And then it seems he also gave a call on Monday to the Spanish premier, Zapatero, to persuade him to buckle down with some serious government cost-saving measures (that included lowering public employees’ salaries and cutting pensions), and he may have similarly bent the ear of Portuguese premier Socrates as well. (more…)

You’re surely all aware of the big current European story: that minor matter about saving the euro from tremendous speculative pressures on its currency, in light of a threatened Greece sovereign bankruptcy which threatens to drag down further other vulnerable EU sovereign borrowers as well. As always, my policy in approaching this topic is to consider only those non-English-language articles which add something to the discussion that my readers are not likely to have already seen elsewhere in the English-language press. So I admit I haven’t provided much coverage as yet, other than the translation of the French Finance Minister interview yesterday/below.

Then again, that’s also a little disingenuous; a unique viewpoint on virtually any European economic or political issue is almost always to be had from L’Humanité, the organ of the French Communist Party. Naturally, those folks have also been glad to hold forth on the new measures and funding facilities arising from last weekend’s Eurozone crisis meetings over the Greek debt problem, as we see in the piece by Bruno Odent provocatively entitled Euro: the plan aimed at saving the hostage-takers. (more…)

The finance blog Naked Capitalism today linked to a current article of high interest which happens to be available only in a foreign language, in this case French. I’m referring to the interview with French Finance Minister Christine Lagarde in the business newspaper Les Echos – newsworthy at any time, but of crucial interest appearing just now.

This is not the first time this has happened on Naked Capitalism, but my intent here is certainly not to scold. In many of those previous instances I have been happy to step in and provide a translation of the article in question on this site, and I do the same below after the jump with the Lagarde interview. The piece’s lede is “‘There’s a determination to construct a new edifice, to reinvent the European model,’ declared the Minister of the Economy in an interview with Les Echos.” (Interviewer’s questions are in bold.) (more…)

Even as the first Greek act in the developing euro-crisis plays on – now with fatalities, as three people die during violent demonstrations in Athens – the focus of public attention is starting to shift to a feared second act in other countries with similarly weak finances, like Portugal or Spain. With that come calming assurances from high EU officials, like EU Council President Herman van Rompuy (remember him?) who characterized any such fears of financial contagion as “irrational.” Going to the horse’s mouth, though – so to speak – we find them to be anything but, as we can see from an article by Luis Doncel (Spanish risk runs rampant) in the mainstream Spanish paper El País. (The hat-tip for discovering this article goes to Eurointelligence – in English, of course – whose piece itself offers a potpourri of interesting current news items on the Greek crisis.) (more…)

Need I even say it? Despite fantastic economic figures just out from China (exports up 46% in February year-on-year, 8.7% economic growth in 2009), the world-wide financial/economic crisis is far from over. An ever-expanding list of governments (Greece, Spain, Ireland, the UK – yes, also including the US) have adopted the strategy of grabbing back desperately-needed economic growth through success in increasing exports. A corollary to that is that a weak currency is an awfully handy thing.

Except that it simply isn’t possible, from a mathematic point-of-view, for everyone to weaken their currencies at the same time. Someone’s money – preferably some country with a huge presence in international trade – has to go up in value, relatively. And this gets back to recent Chinese economic performance: China seems to be doing rather well, but it is also suffering from a notable bout of price-inflation. Furthermore, the Middle Kingdom’s currency, the Renminbi, is clearly undervalued – infamously so, even, due to the Chinese government’s explicit policy to protect it with various currency restrictions to be sure to keep it that way. So wouldn’t we find some nice economic solution for everyone by heeding the calls that have been issuing from US officials for some time now and convincing the Chinese government to cut that stuff out and allow the Renminbi to appreciate in value?

Not according to Tobias Bayer, in his opinion piece for the Financial Times Deutschland (Exchange rate policy: Dangerous game with the Renminbi). (more…)