Debunking Economics, Part III

17th July 2012

Is Our Economists Learning?

"Has even one prominent economist or economic prognosticator who got everything wrong admitted it, or shown even a hint of humility? Has anyone perhaps hinted that the policy recommendations he was making might not be right, given the total failure of events to go the way he predicted? I can't think of one." The Conscience of a Liberal


Economics, an Almost Social Science

Peter Dorman argues that economics has evolved into a doctrinally asocial science: its foundations are built on assumptions that intrinsically deny the social dimension of human life. EconoSpeak


The Weaponization of Economic Theory

Michael Hudson believes the term "neoliberalism" misrepresents the classical liberal idea of a free market economy. "It is a weaponization of economic theory, kidnapping the original liberal ethic that sought to defend against special privilege and unearned income." Michael Hudson


Debunking Economics, Part III

Once described as "the product of the itching imaginations of uninformed and inexperienced arm-chair theorisers," Steve Keen uses the marginalist theory of the firm (that corporations exist and make decisions in order to maximize profits) to catalogue the neoclassical theory's complete lack of real world corroboration. Unlearning Economics


Dumb and dumber in modern macroeconomics

As the sate of macroeconomics continues to be discussed, Lars Palsson Syll points in the direction of a speech Robert Solow made about this very topic all the way back in October 2003 at Joe Stiglitz's 60th birthday conference. Lars P Syll's Blog


More on Mindful Money

Intro: The end of economics as we know it

Part 1: What's wrong with neo-classical economics? 

Part 2: The decline and fall of neoclassicism  

Part 3: The rise of the New Economists – key players and ideas 

Part 4:  Conclusion: Bye Bye Laputa?


20 'New Economics' sites you should read

The Financialist

59 thoughts on “Debunking Economics, Part III”

  1. Justathought says:

    Hi Shaun,

    While many people are outrageously chocked by the latest Cyprus
    development, the debate could easily turn toward “morality versus legality”. A couple of days ago I suggested that societies are notorious to sacrifice their own population in order to maintain themselves. .. El Senior Draghi hasn’t proclaimed… whatever it takes to save the “Zero”???

    In the meantime French President must be smiling to the angels, at last the “Zero” is weakening, especially that: ”Jerome Cahuzac, the Minister for the Budget, says France will pay “about 3 billion euros in 2013, 3.55 billion in 2014 and slightly less in 2015,” to the European Commission for non-applications of several Europeans tax rules ”

  2. ‘The rules of the game just changed.’ Was my first thought on hearing the news, now how much money can I fit in a mattress?

    1. Anonymous says:

      make sure you get the type with long side zipper for ease of access

      1. Anonymous says:

        And a good solid lock….

  3. james says:

    Great analysis as ever, Shaun, in the face of a simply unbelievable cock-up by the eurozone.

    The real mess that they have made is that:

    1. Taking a percentage of savings can be understood by the public;

    2. It looks remarkably similar to theft;

    3. It applies to real people with real money disappearing;

    4. It is clearly and directly related to the eurozone;

    5. The Germans have cottoned on (hear radio 4 this morning) to the fact that the bail-outs might cost them real money.

    How much easier it is to indulge in QE/ESM/troika/IMF/Other acronyms to suit the occasion – no-one understands or pays apparently and there don’t have to be any cuts.
    And yet they remain surprised that UKIP/Beppe Grillo get the votes.
    Unfortunately, the message taken by the eurocrats from this very public debacle will undoubtedly to
    1. Keep things secret
    2. Come up with more acronyms and less action
    3. No doubt to explain why there should be ever closer union.

    1. forbin says:

      +10 !

      sorry is it possible for them do do less action ?

      as for 3 – yes its their jobs they’re protecting here !!

      1. James says:

        I see that the Cypriot banks have now shut until Thursday. I suppose that they all hope that, by then:
        1. They can sort out the confiscation (sorry, tax) so that no-one suffers or at least only rich people
        2. We will have forgotten that they had designs on stealing money saved by normal real people
        3. They can go back to business as usual
        4. We plebs will finally realise that this mess has nothing to do with the Eurozone and will be happy to leave everything again in the very safe hands of the eurocrats…
        I can only assume that the eurocrats believe that we have an IQ of 3 and treat us accordingly.

    2. Anonymous says:

      Hi James

      Thank you and your second point 3 was in one of the Barroso speeches I quoted from. Take a look at this in his home country of Portugal.

      “The European project was and still is not just a project for peace, but also for freedom, democracy and solidarity……
      We knew that sharing a common European destiny did not mean losing ourselves in a vast structure but, on the contrary, finding in that structure the inspiration and the strength to affirm our values and defend our interests.

      More than ever before, the European Union is the guarantor of the ideals of peace, respect for human rights, freedom and democracy on the European continent.”

      Er what about the economic collapse in Portugal Jose?

      1. Dan Hill says:

        The nature of politics and the media is that the public can only be fed that there are two choices with anything. EU project protectors bank on that. Hence we are constantly reminded that the inevitable consequence of there being no EU is war.

  4. Anonymous says:

    First rate analysis, Shaun. I was under the impression that it was agreed in 2008 that savings of citizens were protected up to €100,000… surely the decision of the Cyprus President is therefore unenforcible/illegal? Views would be welcome.

    1. Drf says:

      Politicians can do anything they choose, until ultimately there is armed rebellion against them. There is no honour amongst thieves or politicians. They make up the rules as they go along.

    2. Anonymous says:

      Hi Ray

      Thank you. The wheeze on display here is that this is a tax and also that as the banks have not gone bust then a deposit guarantee scheme is not required etc.. Plenty of work for my financial lexicon there!

      This has carried on tonight where the latest EuroGroup statement -apparently they have realised something has gone wrong- tells us this.

      “The Eurogroup continues to be of the view that small depositors should be treated differently from large depositors and reaffirms the importance of fully guaranteeing deposits below EUR 100.000.”
      Ah treated differently! We await to see what they mean by this (assuming they know…)

    3. Noo 2 Economics says:

      “surely the decision of the Cyprus President is therefore unenforcible/illegal?” – seconded. Surely they need a law to do this? What’s tostop all the savers invoking the 100,000 euro guarantee and demanding a refund of the difference between the market value of their issued bank shares and the cash taken off them?

      I would be interested in a serious answer to this. Of course they can change the law eventually but I don’t think they have changed it so it’s illegal right?

      If not then, should this come to pass in the UK I would not hesitate to go into armed rebellion (in fact it would be a pleasure) against this Government. If they don’t want to bother with the law then neither will I!!

      I think the Cypriots and the Greeks for that matter should revolt and overthrow their Governments in an act of true Democracy. I don’t understand why they haven’t already.

  5. Andy Zarse says:

    Hi Shaun, I read this stunning news yesterday whilst travelling back from the Netherlands (will file my Dutch report soon; their trifling problems are now put into relative perspective).
    I was sat waiting for our a channel ferry at Dunkirk, and the “Dunkirk” metaphor induced a chortle that will probably be lacking in both Limasol and Moscow just now. But I’m sure there will be queues of shell-shocked Euros waiting waist deep in the choppy fiscal waters as a flotilla of little bank transfers comes to take them away. I guess the Swiss will have mixed feelings too. Money will be gushing into Swiss accounts in a torrent faster than a Cornish flash flood, such that if UBS had a branch in Boscastle it would be washed away. And all this happening just when it’s getting close to the Annual Easter Test-the-Peg competition…

    Anyway, my next reaction was to reach for my battered copy of Richard’s Lexion but it appeared to have run out of synonyms. There is no entry to describe where a depositor walks into a bank with his savings only to be mugged at knifepoint by the bank manager! If it happened here I would have no hesistation in making a strongly worded complaint and if that didn’t work then I’d refer the matter to the Financial Ombudsman’s Service. Surely even the FSA would have to set up a sub-committee to look into the matter.

      1. Anonymous says:

        Thank you Jason, I enjoyed the South Park view on all this and will tweet it out…

  6. pavlaki says:

    I received a couple of e mails back from friends and relations in Greece after I had asked if they were concerned for their savings and the reply was not what I had expected. Both said ‘what savings – we have spent it all just trying to survive’. I know that both of these families are quite prudent and would have had money put away in the past so it comes as a bit of a shock and to me a demonstration of just how bad things are. It is never-the-less a hot topic in Greece and folk are very nervous again after having just calmed a little. Well done the Eurocrats!

  7. DaveS says:

    I’m afraid Cyprus is giving us a glimpse of the future.

    I spent a lot of time and angst looking at safe havens a few years back – bought gold, equities, index linked certificates and index linked gilts. Looked at offshore accounts and offshore gold custody schemes. At one point was trying to invest in farm land.

    But in the end I realised that unless I was prepared to flee then in the end a bankrupting government will always cease its citizens wealth – there is no escape unless you remove yourself from their jurisdiction.

    We are seeing the start of this here – wealth taxes are coming. Initially the ridiculous Mansion Tax, but this is just the start. Milliband is keen on Land Value Tax, I expect pension taxes (like Ireland has already done). Eventually I think we will see capital controls, restrictions on foreign equities, gold seizure (like USA did in 30’s), pension nationalisation (seizing of pension pots) and finally seizing of deposits (like Argentina did).

    If you successfully hedge yourself against inflation, then those hedges will become valuable and will eventually be targeted by the government. Its hard to believe that this can happen, but there are plenty of historical precedents and who would have predicted a Eurozone government stealing guaranteed deposits ?

    As Shaun said, the rules of the game have changed – except that is for the very wealthy, they play a different game.


    1. Justathought says:

      Hi Dave S,

      Its hard to believe that this can happen… always been that way!
      When the citizens believe that their culture is no longer worth saving than
      societies collapse…I think that we are still far from this threshold, however personally I already reached it.

    2. Dan Hill says:

      Even supporters of Land Value Tax wouldn’t support it coming in without the removal of other forms of taxation. I haven’t heard of Milliband being keen on it. Burnham flirted with it during the Labour leadership contest. Where did you hear it?

      1. James says:

        I have seen this too. It is probably because Miliband expects it to be a way of dealing with those wicked property developers. When he discovers that it will involve a valuation for every one of the voters in the UK, I think that council tax will suddenly seem an attractive option..

        1. DaveS says:

          Thats the flaw with mansion tax – how do you identify those properties worth over 2 million ?

          I live in Islington and there are big anomalies in the valuations for council tax – things have changed a lot since early 90’s and are still changing rapidly.

          “Mansion Tax” has great kerb appeal for the voting public but it will be a mess. Won’t be long before its replaced by a “fairer” Land Value Tax….

      2. Anonymous says:

        Hi Dan and welcome to my part of the blogosphere
        When I was involved in the debate as to how housing costs could be added to the CPI ( a relatively simple issue on which they still managed to drop the ball) I noticed quite a few establishment views that we had has a land price boom. So maybe they have been manoeuvering in the background for this sort of thing.
        In reality of course we had a house and (some) land price boom

  8. Alex says:

    “But the spin is that this is an asset swap rather than a robbery.”

    You just couldn’t make this stuff up could you?

    So if you mug someone in the street, but issue them an IOU in return, then its not a robbery but an asset swap, even though the victim doesn’t get a choice in it – and as likely, when they come to claim their IOU they’ll find you penniless and in prison?
    But they can’t put you in prison because its not a robbery. Duh! me….

    The wider implications must surely be, what can happen in one EuroZone country can happen in another?? Is your money safe and is this likely to kick off further cash withdrawals in other countries?

    and there is those magic words right at the bottom – do we call a Bank Holiday?

    1. Pavlaki says:

      I like that! Mug someone and give them an I.O.U so it’s an asset swap!! Very good! At least they can’t take away our humour.

    2. DaveS says:

      “is this likely to kick off further cash withdrawals in other countries”

      What would you do if you had deposits in Greece for instance ?

      More critically global wealth will start to pull out of the Eurozone banking system and eventually the UK. This was one of our few remaining advantages – the rule of law protecting private wealth. The desperate attempt to pull back now is making it worse as they are threatening up to 40% tax on big deposits to protect small depositors. Doesn’t really matter what they do now – they have lost the confidence in the banking system.

      What chance do we have when we are governed by fools ?

      1. DaveS says:

        From the Guardian

        “Another Conservative MP, Jacob Rees-Mogg, asks Greg Clark whether he would advise UK citizens in Ireland, Portugal, Greece, Spain and Italy to repatriate their funds.
        Clark replies that it is clear that the situation in Cyprus is unique”

        A unique cock-up.

  9. James says:

    Two other small poins, Shaun:

    1. I thought that the reason for saving the banks was to protect depositors. Perhaps protect could be added to your lexicon and be defined as “steal”;

    2. I had a vague feeling that saving was supposed to be a good thing, rather than feckless spending. This is hardly going to encourage the idea of saving.

    1. Noo 2 Economics says:

      Hi James,

      bail out banks to protect depositors, silly you someone (I think it was Forbin) has said on here before “Government of the banks by the banks for the banks”

  10. forbin says:

    Hello Shaun,

    Hmm, I think a closer look at bank deposits needs to be done this week – I expect MiniTru to run NO stories what so ever about UK banks being emptied …..

    Now this Cypriot Solution brings to mind what our “leaders” were saying a while back – put your money into shares – look we’ve cut normal savings rates !! put you money into these stocks and shares ISAs – oh god ! we didn’t so they’re after our cash another way !

    Cash for paper IOUs – now this Cash for IOU scam

    DaveS is right – in the end read your history – money is taken from the middle class to give to rich – the poor don’t have any .

    Nathan asked – how much money can you stuff in a mattress – enough to keep you warm for a night once the Gov changes the notes – remember they took the old £50 note and altered the design ” because of too many fakes or what not ” …

    worthless over night , klick of a politicians fingers – ” klick! ”

    And taking over pensions ? Post Office comes to mind …..

    Nationalise the Pensions like Henry VIII did with the cathedrals…

    Don’t worry folks the show’s not over yet – didn’t they tell you it was a Farce?

    Pop corn in hand


    1. forbin says:

      oops its already starting

      “never believe anything until its officially denied ” category

      Cyprus bailout: Savers in UK banks ‘well protected’

      Yeah right …..

      1. Anonymous says:

        Thanks forbin. It should read “well shafted”

        1. Anonymous says:

          Hi Hopping Pot
          You may well find that in my financial lexicon for these times as I like it!

    2. Noo 2 Economics says:

      Hi Forbin,
      Couldn’t agree more. This has definitely given Ravin Dave and Boy George ideas, they will be cursing themselves for not “thinking outside the box” like the ECB has.

      Now we begin to understand what Draghi means by “we will do whatever is necessary”

    3. Anonymous says:

      Hi Forbin

      Initially I would expect money to come to the UK from the Euro area because of this. Maybe some has already today although the 1% rise in the pound £ versus the Euro may put some off. But there is plenty of scope for our gaffe ridden establishment to drop the ball…

      As to the other issue it is governrment of the stock exchange index by the stock index for the stock exchange index.

  11. Pavlaki says:

    I have now read many articles about the Cyprus bank raid in the German, French, Greek and Spanish press and whilst all of them express outrage not one asks the fundamental question – Is the Euro worth this? Surely people must be thinking that this is only a common currency experiment and that they were better off ( emotionally if not financially ) with their own currency? I am still amazed at just how much suffering the Eurocrats are prepared to inflict to keep this dream alive and I am even more surprised by how much folk are prepared to endure!

    1. Jan says:

      Yes the euro was supposed to unite the citizens of Europe. I don’t think it’s worked.

    2. Rods says:

      French UKIP party in Le Pen’s National Front. If she gets into power then she not only wants to remove France from the Euro but also from the EU. She thinks the EU is past its sell by date and not fit for purpose. Seems a sensible analysis to me.

      Where they have been getting stronger and more votes, the next French election may well be very interesting as they have caused some shocks in the past with their popularity in elections.

  12. Anonymous says:

    The genie is out of the bottle as even if ruled illegal the levy/asset swap threat is a clear option once EU law is changed!
    Everyone heading North to the illegal state with the Turkish currency?
    What were the IMF thinking (sorry forgot Lagarde in charge) still same old solution to export their way out of this with privatizations paving the way?
    Cypriot banks were paying 4.5% interest and apparently 10 year backlog on registering businesses for tax purposes – so some initial problems.

  13. forbin says:

    Hello Shaun,

    Sorry for posting too many times

    but why couldn’t Cyprus just let its banks , well , you know, sorta go …

    protection for the normal bank holders is in place ( erm sorta of ) so we could have a very nice test case for letting the banks take the rap – those Russian crooks ( as if they made the majority of the deposits – aren’t they a cover story ? ) would suffer as intended ??

    ah I’m forgetting this is the same old saga of protecting the UK, French and German banks , isn’t it?


    1. DaveS says:

      From the BBC

      Joerg Asmussen, a member of the European Central Bank’s governing council, said that, as Cyprus’s banking structure was different from others in the eurozone, with fewer private bondholders, there had to be a tax on ordinary savers.

      What does fewer private bond holders mean ?

      They did the haircut on Greek bondholders – why not Cyprus ?

      1. ernie says:

        It means the main bondholder is the ECB, either directly or through posted collateral from such as the Greek banks. In other words, someone might “find the lady” and they wouldn’t be able to keep running the scam if they lost on these bonds.

      2. Anonymous says:

        Hi Dave

        It was the Greek PSI which screwed (technical term….) the Cypriot banks and of course they told us it was unique.Ooops!

        Actually Cypriot banks have a structure which has a lower amount of bond holders than you might expect. This is course yet another risk which did not seem to trouble the regulators. But I would as discussed before on the other bailouts/ins make them pay their share.

  14. quelgeek says:

    Like others here I was amused by the official denial from Mark Neale (of the Financial Services Compensation Scheme) that anything similar could happen here “because deposits are protected by the FSCS”.

    Like the Greek PSI which was deemed “not a credit event”, thereby not triggering the credit default swaps, so the Cypriot confiscation/corralito is not a bank failure and would not trigger compensation were a similar thing to happen here.

    Except that I have no idea where to put any compensation except a bank, I’d suggest the rational thing is to trigger a bank run and failure, to preempt confiscation.

    1. Anonymous says:

      Hi quelgeek and welcome to my blog.
      There is a phrase I use regularly which was originally stated by Otto Von Bismarck but I prefer to attribute to Jim Hacker of Yes Minister.
      “Never believe anything until it is officially denied…”

  15. Justathought says:

    Hi Shaun,

    Portugal’s annual inflation rate skidded towards a halt at the start of this year, and was at 0.2% in February, down from 0.4% in January. Inflation is collapsing now VAT and other hikes have dropped out of the system. Inflation is way below the close to 2% target of the ECB, and getting perilously close to deflation. The debt to GDP ratio (both public and private) will surge as nominal GDP falls.
    Greece also looks incredibly close to deflation at this point. That would be just about the last straw. All the debt calculations would need reworking.
    And the Eurostat latest this Monday 18 March the EU deficit for energy increased to 422.5 Euro Billion in 2012 from 388.2 Euro Billion in 2011

    1. Anonymous says:

      Hi Justathought
      Yes the strong Euro -which is still just about true in spite of todays falls- has had a disinflationary impact. Also as you point out the VAT rises are falling out of the annual numbers so we could see sustained disinflation as well as deflation (falling aggregate demand) not a pretty mixture.
      And yet we see pavlaki and others reporting price rises on their trips….

  16. Rods says:

    Hi Shaun,

    Another great piece of analysis.

    Apparently the Cypriot banks are in trouble where they spent 160% of Cypriot GDP of Greek bonds and the 75% haircut has left a big hole in their balance sheets!

    Russia and Cyprus have a very favourable double tax agreement that is also used by Ukraine. This has not been updated since the Soviet Union was dissolved and it has made Cyprus a good destination for savings.

    I no doubt that some of the money in Cyprus is dubious, but a large percentage will be legitimate as it was much safer to have your money in a Cypriot bank, rather than Russian or Ukrainian one.

    This is not because there is a risk of bank failure in Russia or Ukraine, but for personal security. Corrupt bank employees will sell account information to third parties who will try to take advantage of this. So if you are a businessman who is doing well, it comes down to keeping only relatively small amounts of money in your Russian or Ukrainian bank accounts for security reasons.

    I was reading over the weekend the recently published book “Heavens on Earth – How to Create Mass Prosperity” by J P Floru a Senior Research Fellow at the Adam Smith Institute. It is a good read on what countries like China, Hong Kong, Singapore New Zealand and Chile have done to get where they are today in terms of wealth. One of the interesting things is that there is very little bank regulation in Hong Kong and they know there will be no Government bailout after the failure of a bank. There was one in 1961 and two in 1965, when the authorities, basically said tough, these things happen in a capitalist economy. Since then their banks have been much more prudent and this might also explain why HSBC has been the only major UK bank since 2008 with no liquidity problems.

    A though of mine is that these bank problems have all occurred since various EU Directives to start to form a single market in financial services and bodies like the FSA have been created to regulate them. I’ve read that it takes between two and three years to get a bank licence in the UK. Could the problem thus be two much regulation, where the regulators scrutinize and view every ticked box but in reality see nothing! This regulation also forms a high barrier to the entry of new banks, so we have just a few too big to fail ones!

    If we had much simpler regulation so there were more banks on the high street and the Internet, but they had to produce quarterly accounts, with capital reserves, their loan book, by sector and non-performing and bad debts clearly shown and this was in tandem with widely available third party deposit insurance (the banks not allowed to sell so it is not another PPI scandal) then the market would price a bank’s risk. The banks would then have to tread a path between risk and profit and if you personally decide not to take out deposit insurance, that is your risk, so no Government bailouts are required.

    I think your idea of personal liability, is a good one, if you are senior management or an investor at an investment bank, which I would make legally separate from retail banks, would mean they would take a strong personal interest in keenly quantifying risk!

    If we continue with more and more regulation after the previous regulation failure and the horse has bolted (literally in the case of the other FSA!), then surely there is a danger of just creating as you would put it “a more unstable lifeboat” with greater regulation failure and even bigger banking problems!

    1. realfinney says:

      It seems like so many problems have at their heart the hubris of government’s delusion that it can make life risk-less for it’s citizens: No need to scrutinise your savings bank or pension provider, don’t bother wondering what’s in your ready meal or whether the drugs your taking will cure your illness. We will handle all of this and more in your best interests, and we’ll make anything we judge a poor decision illegal..

    2. Anonymous says:

      Hi Rods
      I didnt know the driving force behind the flow of Russian cash to Cyprus so thanks. Also even if it is not mafia money it may be driven there by the Mafia.
      I have a curious stat back. The Bank of Cyprus has more branches in Russia than in Cyprus. Although actually maybe it is not that curious…

  17. DaveS says:

    Good day to bury other news perhaps ?

    “New fears about inflation as ONS quietly downgrades RPI”

    They will steal by inflation and if you hedge inflation they will eventually steal your hedges – its just a matter of time.

    1. Anonymous says:

      Hi Dave
      Sore losers arent they? Actually it is only taking away their kite mark which if you think about it is actually a compliment.
      Those scaremongering like Ros Altman with her “there might be no RPI tomorrow” might like to read the actual document which was released last week which states correctly that the ONS has a “statutory duty” to produce RPI stats. As they are already at the bottom of the report it will not be easy to demote them further!
      That bit by the IFS spokesman was shameful as his “broad agreement” was in fact 8 out of 406. He should go into politics!

  18. Anonymous says:

    I wonder what the best way to drain accounts is under the radar? If I take out £1K a week for a bit and then claim I have a gambling addiction? You have to register when you buy physical gold in the UK. They really do have all the exists covered for Joe Avg.

    1. Justathought says:

      Progrock, Do you fancy a little trip to Brussels? No questions asked…no ID required…

  19. Neophytos says:

    Well from my contacts in Cyprus the possibility as i understand it of Cypriots rejecting the bailout and causing outright bank collapses is not negligible. i would rate it at 30-40%. If that happens will we see the first country out of the Euro and the dominoes starting to drop?

    1. Anonymous says:

      Hi Neophytos and welcome to my part of the blogosphere.
      In the Euro debate in the UK I have often pointed out that for the UK if we wish to join a currency union it would be more logical for us to join the US Dollar. In that spirit maybe you might be considering the Rouble although perhaps Cyprus might be better off with her own currency and then the dominoes would start to fall I think.

  20. David Lilley says:


    I think it is a good idea. Just make it legal by keeping the E100k protection but make the above E100k deposits progressive. A sliding scale. The bank shareholders have already taken their hit following the Greek PSI.

    The bank depositors are stakeholders just like the bank shareholders. They are capiltalists and there is nothing wrong with that. They made their opportunity cost decison. They pay this way or via increased taxtion.

    There is no possibility of contagion due to the EZ wide E100k guarantee.

    Cyprus is a tiny EZ economy and a very special case.

    1. ernie says:

      David – good luck with that explanation. So far, all the bailout countries have been special cases. I’m sure you’re right. Cyprus is a faraway country of which we know nothing. Phew! Peace in our time at last!
      Don’t forget that the bondholders (ECB) took a risk but somehow they didn’t get hit – the eurocrats must have just forgotten I suppose.

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