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Tuesday, March 19, 2013

The Cyprus Bailout II

In my yesterday's post on the subject, I complained that I had not found "a single point" in favour of the decision.
I admit I was a bit impatient, as Willem Buiter in a column for the FT Long Room (thanks extended to Paul Murphy of FT Alfaville) thinks that:
The Cypriot bank creditor bail-in is a net positive for the euro area...
OMG! Of course his arguments are well thought through, and you better see for yourselves.

Urgently important
Felix Salmon at Reuters Comment draws our attention to the proposal of Lee C. Buchheit and G. Mitu Gulati  (3 page pdf) titled Walking Back from Cyprus.
There is still time (Tuesday 17:42) for the Cypriot President to propose this to Parliament. As Felix Salmon says:
Buchheit and Gulati have now given Cyprus’s parliament a clear Plan B. If the lawmakers want to reject the Eurogroup’s plan, they know what they must do.   

By the way, Ryan McArthy's Counterparties entry today , titled "Insane in the Mediterranean" is devoted to the subject. 

Charles Wyplosz at voxeu thinks that All the conditions for a total disaster are in place

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