Whichever way you look at this troubling situation, last week’s intensification of deposit flight in Greece is much more than just a new wrinkle in what has become a protracted European crisis. If the phenomenon spreads, and it will in the absence of a credible region-wide policy response, control of Greece’s destiny within the eurozone would slip even further away from politicians and policymakers and more directly into the hands of a population that is in a rejectionist mood. Already this rejection is not that far from tipping Greece into a classic funding panic and the eurozone into real turmoil. Continue reading »
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