I read the Financial Times because it has news I can't get from other eminent publications. Today, while others are reporting the EU-IMF proposed bailout of Cypriot banks, only the FT has the insider story. It seems as if the Cypriots made a key concession, the Germans demanded more, and everybody else piled on.
Is this a Creditanstalt moment? Neil Irwin of the Washington Post worries that the unusual features of the deal, especially penalizing lower income depositors who thought their savings were insured, could set off a deeper and broader economic crisis in Europe.
I can't judge the financial aspects of the deal, but I worry when big countries, on behalf of their big bankers, force weaker democratic governments to impose austerity on their citizens. That could spark the flames of fanatical nationalism and anti-democratic movements.
The road signs may say "recovery around the corner," but the path is along a high cliff with no guardrails.
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