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Wednesday, July 25, 2012

The view back from 2021: How the euro was saved With a bang, not a whimper

Mr Berezin's ( of Bank Credit Analyst) June report accurately pinpoints the source of the crisis: persistently higher inflation and slower productivity growth in the periphery led to growing current account deficits with Germany. (emphasis added)
Thus The Economist (Free Exchange) 25/07/12 endorses Berezin's diagnosis.

I humbly agree, also. BUT one key reason for that development was the lower than appropriate interest rates for the periphery to accommodate German conditions.
See Fernanda Nechio of the Federal Reserve Bank of S.Fransisco.
Another good expo is referred to by  Yves Smith over at EconoMonitor 

Friday, July 13, 2012

Edward Hugh 's very nice turn of phrase, in the context of what is going on in Romania,
 What happened back in 2009 was not a case of long established living standards being suddenly slashed, it was a case of them being cut back to where they were before they were raised in an unsustainable way in order to win elections.
is indeed "food for thought".