It looks like the EU has finally figured out that austerity is anti-growth and that in the EU context this is leading to debt deflation. The word on the street is that the EU is prepared to temporarily relax the 3% Maastricht hurdle. This article explains why.
Before I get into why let me enumerate the country problems.
Greece: in a deep depression after receiving a bondholder haircut and default. Fears of a second haircut and default are already circulating. meanwhile bank deposits are in freefall as the Greek banking system collapses. Elections are due later this year.
Ireland: Already socialised bank losses onto the sovereign. Now the Irish government is looking to rescind some of these guarantees. Meanwhile talk of a new bailout has surfaced as Ireland has been confirme...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.