Euro: The “opportunity within the crisis”

Germany's Foreign Minister Westerwelle has stressed the need “to direct our efforts towards a strategic and forward-looking development of the euro’s future”. Long-term structural reforms are needed, he says, to avoid another debt crisis arising in the near future. What he does not see as necessary is an increase in the euro rescue package.

The crux of the matter according to Westerwelle is that “we are in this situation because too much debt was taken on in too short a time; and it now cannot be refinanced on the markets”. The Minister therefore considers it essential to tackle the causes. The pressure created by the immediate problem must be used, he feels, to push through structural changes.

Euro area unemployment remains at 10.1 percent in November

Eurostat, the statistical office of the European Union, on Friday announced that the unemployment rate in the Euro area remained at 10.1 percent in November 2010.

The rate in Euro area 1 (EA16) is exactly the same as registered in October 2010. The EU27 area registered a 9.6 percent of unemployment which was also the same as the previous month.

EA16 consisted of 16 Member States up to December 31st. These were Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. From January 1st, the EUro area (now dubbed EA17) also includes Estonia.

Estonia to adopt the Euro on Saturday

BRUSSELS - The European Commission on Friday announced that Estonia will adopt the Euro on Saturday, January 1 and thus becoming the 17th member of the Euro zone.

Estonia will adopt the currency at midnight as preparations for the introduction of the Euro were completed. Estonia’s commercial banks have already received bank notes and coins from the Estonian Central Bank.

"I congratulate Estonia and warmly welcome all its citizens to the euro area. The Euro is there to improve everyday life," European Commission President José Manuel Barroso said. "It makes travel elsewhere in the Euro area easier and cheaper for Estonian citizens, with no need to change currencies and pay commission."

What the Swiss Did Right

by Stefan Theil

During the financial panic of 2008, the Swiss had more reason than most to be frightened. The country’s banks, dominated by Credit Suisse and UBS, held assets worth an incredible 680 percent of Switzerland’s GDP (compared with U.S. commercial banks’ assets of 70 percent of GDP). No one knew how many of the Swiss holdings were toxic. What everyone knew was that these banks were far too big for tiny Switzerland to bail out in any full-blown banking crisis. Capital flight would crush the Swiss franc and the country’s economy right along with it. There were scary parallels to Iceland, another small nation with an independent currency and outsize global banks. After a severe blowout, Iceland is now in a deep recession and on life support from the IMF.

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