Slovenian Banks Need Capital Boost, IMF Says... Slovenia next?

i am sure they never will.. they are just sick, no logic there...

The tiny island nation of Malta is next. It's banking sector is huge compared to the nations' GDP - second to Cyprus I think. Lots of money is deposited in Malta from arab countries too because it is historically quite a neutral place. Thing is though that it is also in the Euro.

Malta, mark my words.

The crisis in Cyprus is a good opportunity to take a step back and remind ourselves how incredibly broken the Eurozone remains.

For one thing, the whole reason the Eurozone has these sovereign debt crises is because while the countries share a common currency, they don't share a common Treasury. So it is literally possible for a country to just run out of cash. That can't happen in a country like the US or the UK, which are capable of creating their own money

And then even beyond that, the single monetary policy isn't helpful. The periphery needs much more stimulus, whereas Germany is worried (perhaps fairly) about bubbles, as everyone rushes cash into its borders. Plus, Germany has virtually no unemployment, so it sees no need for stimulative measures.

Economist and professor David Beckworth looked at the big picture on Monday, pointing out how the system needs some serious structural reforms to function properly.

One reform is to alter ECB policy so that it actually tries to stabilize nominal spending for the entire Eurozone, not just Germany. Since it inception, ECB monetary policy has been biased toward Germany at the cost of destabilizing the Eurozone periphery. This could be fixed by having the ECB abandoned its flexible inflation target and adopt a NGDP level target. Another complementary reform, would be to create meaningful fiscal transfers in the Eurozone similar in scale and scope to the United States. Both of these options, however, would face stiff opposition from Germany. For the former would require temporarily higher inflation than Germany desires and the former would require large fiscal commitments for the Eurozone from Germany. Neither is likely to happen.

The Eurozone made its first step towards a true structural reform last summer, when the ECB announced its "OMT" program, which begins to establish the central bank as a lender of last resort, backstopping governments that get into trouble.

That's cooled the crisis a lot (reducing government borrowing costs) but the catch is that to be eligible, countries have to put on handcuffs (reforms, austerity, etc.) and that's sent the economies of various countries right into the toilet.

Here, for example, is the unemployment rate in Italy.






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That's hardly an unusual looking chart.

Outside of Germany, pretty much every economic indicator in the Eurozone just gets worse and worse.

While Mario Draghi rightly can claim to be the world's #1 central banker (given the difficult situation he faces, and his limited mandate) leadership remains poor.

In the wake of the Italian election -- wherein incumbent Prime Minister Mario Monti received a pathetic 10% of the vote -- he was praised for having taken the tough unpopular austerity decisions that allowed interest rates to fall as they have. In fact this was nonsense. Interest rates fell because of the ECB. Austerity and reform didn't accomplish squat on their own.

But the beatings will continue until morale improves.

Against the backdrop of bad theory and bad policies, Europe has engaged in a series of ad hoc rescues and bailouts that tamp down flareups where they occur.

And heretofore Europe has actually gotten lucky. All the big votes have gone Europe's way.

Remember all those Greek austerity votes? They always passed by the skin of their teeth.

Remember the German Supreme Court decision on the legality of the bailouts? It went Europe's way.

Remember when Slovenia was the center of attention, because it came close to not approving the expanded bailout plan? Slovenia eventually played ball.

And then of course the public elections always turned out okay. In Greece last summer, the conservative New Democracy party narrowly edged out the leftist SYRIZA party. Had SYRIZA won, it would have set up an epic clash, as SYRIZA was not going to go along with the austerity that was demanded by the outside.

It looks like Europe's luck is running out.

In Italy last month, the election ended inconclusively. The center-left coalition failed to get enough votes (it seems) to form a government, and there might need to be new elections.

And then it finally happened in Cyprus yesterday. A bailout vote just failed. It didn't just fail. It didn't even garner one yea vote.

And the whole reason Cyprus is faced with this awful bailout proposal (which taxes depositors) is because if Cyprus were to just get a grant or a blank check without brutal conditions, then that couldn't pass the German parliament. So there are really two parliaments here that are ready to vote 'no' on something.

This has always been the risk to the system, that a vote would go wrong. And now it's happened.


Read more: [link to www.businessinsider.com]

Cyprus, slovenia, who cares!


They are nothing countries.


When its starts being France, Germany, Switzerland, then be concerned.

and this is just the beginning of world banking carsh....OMG this is frightening.

That makes sense actually. Piss off the Russians first, and then the whole middle east...again.

Cyprus was probably more like the canary in the coalmine than the snowball starting at the top of the slope.

William Black said in an interview about 4 years ago it might start in Eastern Europe, maybe Hungary, etc.

Watch Eastern Europe.



.

when will it be the time for Luxembourg?

Seize the Peons bank accounts !

Where, D.C.? Tons

Monetary unions are not susteinable, especially when you have different economies as in Europe, Eurozone will brake-up soon or later....

If you watch, Germany and other northern countries have grown since Euro, instead peripheal countries have gone broken: Spain, Italy, Greece, Ireland, Slovenia, Portugal, Cyprus...

this is no coincidence, the common currency has widen economies and competitivness of european countries, moreover it has started a movement of capitals that has brought southern countries in private debt, that then has become public debt when banks had to be saved....

if you want to know more, go and search for Eurozone and the Frenkel cycle.....

France has been saved so far, but in truth it has the same (if not more) problems than the other countries, simply this problems have still not presented....France is a bomb...soon or later will explode.....

Euro has been a political choice, not an economic one, it should have been the last step to a Europan Union, instead it has been the first one on Germany and France command, they know how it would be ended, but they have gone straight and they have fooled all the other countries....

Now it's a real cage....and no one want lo leave cause MSM make terrorism about consequences, but eventually Eurozone will brake up naturally, maybe in a bad way........

Germany destroys the world once again!!

Liechtenstein?

Let's say Switzerland, where is the highest money laundering in the world, what do you think ?

well that will be like a nuke bomb!

___..____.._____

Max Keiser goes berserk live on air, almost does the unthinkable.

[link to www.youtube.com]

It's hard to beleive the people at the IMF will throw anyone under the bus, to save this stupid, fraud ridden, debt based, fractional reserve, world banking system they have put in place, And why? because they have all become millionairs from the system they are trying to save.