Bank Runs Speed Up European Decision Making
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  • thibaud

    It’s obvious now, even to the Germans, that austerity is a disaster. A massive infusion of cash a la QE3 is the only way out.

  • Jim.

    So, any word on where they’re moving the money to?

    That would certainly affect what Germany will do here. If they’re moving the money from debtor banks to creditor banks, the creditor banks won’t collapse.

  • Andrew Allison

    I don’t see how you get from “. . . . but forced off the agenda by the German chancellor’s objections.” to reconsideration. In fact, the participants emphasized that the austerity agreements entered into must be honored. All the talk of a change in direction is Eurofudge. Merkel is prohibited by her constitution from changing course. It’s important to keep in mind that, at least for now, only Greece is actually insolvent.

  • Kenny

    The only contingency plan Europe has is INFLATION which is a hidden tax.

    They will start printing money and think they can control inflation to a ‘reasonable’ level.


    The whole place is going to burn. Watch and see.

    Anyone with any sense in the PIIG countries will have converted as much of the liquid portion of their wealth/savings into gold and/or silver.

    To trust in paper is to trust the word of the politicians and worse … the elite.

  • Kris

    I’d wager a large number of Germans are wondering why they should send money to Greece when even Greeks won’t keep their money there.

    Sure, that just shows how unsophisticated their thinking is [See how I covered myself?], but public opinion counts.

  • Brendan Doran

    What austerity are you talking about? I see only Ireland and Iceland imposing austerity.

    Unless by austerity you mean increasing spending at a lesser pace than Kamakaze Krugman recommends.

  • Thibaud, a massive infusion of cash via QE or some similar mechanism will be ineffectual absent crystalization of bank losses, probably involving shareholder wipeout, massive bondholder haircuts, forced debt-equity conversion and where necessary temporary bank nationalization. Loose monetary policy can’t be genuinely effective while the transmission mechanism is broken.

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