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Subject:  Re: Will Cyprus do a deal? Date:  3/24/2013  4:15 PM
Author:  franchot Number:  418769 of 536930

Further, it might increase his popularity in the polls.

Hmm. I'm not sure that an ex KGB/FSB guy is particulary worried about 'polls', voting or any of that stuff. On the contrary, I'd say that polls are a much more pressing concern for Angela Merkel because anti EU sentiment is a rising political force in Euroland. This is despite the fact that Germany has been one of the major beneficiaries of the EU. Diluting the Deutschmark with the Drachma/Lira/Peso, etc has enabled an exponential growth in German exports - which just reached a record-breaking €1 trillion.

There is €70 billion deposited in Cypriot accounts, approx €30 billion of that is Russian. Obviously this move by the Troika will lead to an exodus of all expatriate funds from Cyprus and it threatens the banking stability of PIIGS. That denouement was inevitable once Brussels suggested an arbitrary levy on Cypriot accounts. Whether by accident or design is a matter of debate. But now the eleven year experiment has become domestically toxic, the desire to provoke a PIIGS exit looks more attractive:

A Cypriot eurozone exit would then be a starting point for a new eurozone made up of solvent, northern-European nations only, something that the German Chancellor, Angela Merkel, is under mounting domestic pressure to back. The small but increasingly influential Alternative for Germany party, which will hold its first national gathering next month, will be campaigning on precisely that ticket in elections in September, pointing out that right now, the eurozone is promoting not unity among its members, but strife.
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