Dijsselbloem Has Finally Found A Way To Truly End The Euro Crisis But It Wil Be Messy
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Let me preface this by first saying that by no means would I consider myself a Euro apologist. I think the Euro crisis has been poorly handled from the start, and that the latest period of calm is nothing short of a farce, only thanks to the European Central Bank’s efforts to do “whatever it takes” to save the Euro, back in July 2012. But an end might be in sight for the Euro-zone sovereign debt crisis – and it’s not an exit that anyone has been looking towards.
The past few days have been mired by endless speculation over the precedent the bailout of Cyprus might set for other peripheral countries. After all, the Euro project is about equality and unity; and given the progression of the crisis, we know that each step has set the precedence for the next step. That is to say, the Cypriot bailout – one which looped in depositors to take the fall for banks’ poor investing (gambling) decisions – is now considered a “template” for the rest of Europe. By now, everyone has recycled the fact first brought to light by The Economist in this week’s issue: of the 147 financial crises since 1970, none of them resulted in depositors taking losses before Cyprus, according to the IMF. This is a unique case indeed.
But is it really a unique case? Eurogroup President Jeroen Dijsselbloem seems to disagree. In a revealing joint-interview with the Financial Times/Reuters yesterday, Mr. Dijsselbloem said that:
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