FT Alphaville > Greek debt: restructured

…Did anyone notice this weekend’s Greek debt restructuring?

FT Alphaville -> Greek debt: restructured

FT.com - Ireland needs help with its debt

What caused this calamity?

As Philip Lane of Trinity College notes: “There was a genuine Irish economic miracle, with very rapid output, employment and productivity growth during the 1994-2000 period.” Without entry into the eurozone, this might have petered out. But the fall in interest rates increased the risk that a credit-fuelled property bubble would emerge. So, indeed, it did.

Prof Lane observes: “The flavour of this boom was very different to the ‘Celtic Tiger’ years. In particular, it was dominated by a surge in construction activity.” Moreover, this “expansion in property investment was fuelled by rapid credit expansion”, not just to the household sector, but also to a “small group of property developers”."

FT.com / Comment & analysis / FT Columnists - Ireland needs help with its debt: "

Axel Weber, the Last Man Standing: Europe’s reforms may come at a high price

[. . ]

"The current crisis has challenged the founding principles of EMU. Still, EMU can emerge stronger and more resilient than before. To that end, the decisions on EMU governance have to reinvigorate rather than circumvent the basic principles of subsidiarity, responsibility of individual member countries, and no-bail-out as laid down at the launch of monetary union. This is an opportunity that must not be lost."

The writer is outgoing president of Germany’s Bundesbank

FT.com / Comment / Opinion - Europe’s reforms may come at a high price:

FT.com / Lex - Iceland: paying for banks’ losses

"Iceland’s downfall at the hands of its buccaneering bankers has prompted some Churchillian prose. “To echo an historical comment,” its finance minister writes, “one could say that seldom have so few done so many (ie an entire nation) so much damage.”"

FT.com / Lex - Iceland: paying for banks’ losses

Why can’t economists predict disruptive events?

When the Queen asked asked an academic at the LSE why the economics profession had failed to predict the credit crunch, she raised a topic which continues to resonate

“Because economists are rational, ma’am”

Why can’t economists predict disruptive events? | gavyn davies | Insight into macroeconomics and the financial markets from the Financial Times – FT.com

Armageddon Bank - Amagerbanken

"Amagerbanken is a small bank in Denmark — but its failure could end up having big consequences for investors in bank debt. It might end up being a relatively rare instance of a bank’s senior unsecured investors (and depositors) taking a hit."

Financial Times FT Alphaville Armageddon Bank

FT.com / World - Portugal economy shrinks as austerity bites

[...]

"Zach Witton, an economist at Moody’s, the rating agency, forecast on Monday that “Portugal will seek assistance from the EU’s bail-out fund by the second quarter of this year at the latest”.

Emilie Gay, European economist at Capital Economics, said that with “government bonds uncomfortably high, Portugal still seems to be the next in line to be forced to accept a bail-out package”.

Portugal’s cost of borrowing on 10-year debt has fallen back from a euro-era high of 7.63 per cent on Thursday amid reports that the European Central Banks was buying Portuguese government bonds again.

But the 10-year yield remains above 7 per cent, a level the government concedes is unsustainable."

[...]

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FT.com / Europe - Weber says hawkish views led to ECB race exit

Bundesbank president Axel Weber said a lack of political acceptance in the eurozone for his hawkish monetary views had driven his abrupt decision not to run for European Central Bank presidency

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