Daily Archives: February 9, 2010

Pinn illustration

The financial crisis of 2009 is morphing into the fiscal anxieties of 2010. This is particularly true inside the eurozone. Spreads between rates of interest on Greek bonds and German bunds touched 3.86 percentage points in late January (see chart). The risk has emerged of a self-fulfilling confidence crisis that would have dire consequences for other vulnerable members. Much attention has focused on what might happen if the crisis were not resolved, with talk of bail-outs, defaults or even exits from the euro. But what would need to be done to resolve the crisis, without such a calamity? It is the demand, stupid. Read more

By Jon Danielsson

Iceland’s president refused last month to sign a parliamentary bill authorising settlement of the Icesave dispute with the UK and the Netherlands. This does not mean a rejection of his country’s obligations. On the contrary, Icelanders have already agreed to compensate the UK and Netherlands. The decision by President Grímsson stems instead from the fact that over 70 per cent of Icelanders find the terms of the current deal unreasonable. Read more