Earlier this week, we asked readers, "What austerity measures likely will be most effective in achieving sovereign financial recovery?"
The recent “bail-in” of Cyprus by the EU, IMF and European Central Bank troika forced depositors in Cyprus banks to turn over about 40% of their assets to the banking system. This action hasn’t caused a bank run in the greater eurozone yet, so we asked professional investors why this is the case.
Predictions of the disintegration of the “European experiment” have yet to be fulfilled despite more than 1,000 days having passed since the eurozone crisis first began. Investors owe it to themselves to consider alternate scenarios.
The veteran investor Felix W. Zulauf, president of Zulauf Asset Management AG, discusses the future of the eurozone and China’s effects on the world economy.
If Spain abandons the euro or defaults on its debt, it could trigger a Lehman-style meltdown. In spite of the good performance of Spanish sovereign debt and stocks in these first weeks of the year, this meltdown scenario can’t be ruled out yet.
Thomas Mayer argues persuasively that Europe’s Economic and Monetary Union (EMU) could work if the member states would embrace a new EMU architecture. Even though all past monetary unions of sovereign states have failed, Mayer remains hopeful that the EMU can develop a more robust framework and contribute to the historical work of European unification.