The end of the single currency.

[davywavy]

Just a quick one. Cyprus has just passed capital controls into law, preventing people from taking their own Euros out of the country. Given that the purpose of a single currency is the free movement of capital, it can reasonably be said that the Cypriot Euro and the European Euro are now effectively different currencies.

Comments

[zenicurean.livejournal.com]

Is it just me, or is the Eurogroup communicating with the markets exclusively through one of those carnival fortune telling machines that hand out little notes? ("Zoltan predicts that only shady Russian oligarchs will suffer, so it's completely okay!")

[davywavy.livejournal.com]

It's just bizarre and berserk. One wonders where we're going next.

As a eurozone country, have the possible consequences been much debated over there?

[zenicurean.livejournal.com]

There's quite a bit of talk about where we're going. We don't quite know where that is. There's also quite a bit of talk about who is to blame. There's no obvious media consensus on that, either. The major economic and business papers seem to widely consider the entire Cyprus thing to have been atrociously ham-handed and a terrible precedent in just about every respect, but as far as I can tell the government is vaguely sticking to notion that, despite everything, this is less horrible than what the alternative would've been. (In many ways Helsinki tries to conduct itself as one of the Robins to Angela Merkel's German Batman.)

At least one journalist took pains to explain that we should all have seen this coming back when Greek debt was restructured, and, given that the EU response had by then already turned into a "Monty Python sketch", the key thing we should take from this is that European decision-making about these things is essentially ad hoc entirely regardless of what anyone in Brussels promises us.

[hairyears.livejournal.com]

You're nearly right.

Cyprus has just passed
capital controls into law, preventing ordinary people from taking their own Euros out of the
country.

Russian oligarchs and money launderers will experience no difficulty whatsoever.

[davywavy.livejournal.com]

In a black-humour sort of way, that just makes it even funnier.

Why the EU doesn't go the whole hog and build a wall along the border in order to protect the people from foreign influences I don't know.

[davywavy.livejournal.com]

I note from reuters that the London Branches of Cypriot banks were open all week with no transaction limits, and also international payments through paypal were available, once again with no limits.

Stroke of luck for the Russians there then, eh?