The Cyprus bailout is sending a "shockwave" through the financial markets.
I suspect that six months from now we will have forgotten about it. We shall see.
What does Pimco's El-Erian think?
He thinks that Europe has lit the fuse on two sticks of dynamite with this bailout deal:
First stick of dynamite: Cyprus itself. By including the small depositors in this tax the EU has created a situation that could result in serious social unrest and ultimately Cyprus leaving the euro zone.
Second stick of dynamite: The bailout draws into question the stability of deposits in the entire euro zone. Once again the political system has failed Europe and the ECB is going to have to step in.
I suspect that six months from now we will have forgotten about it. We shall see.
What does Pimco's El-Erian think?
He thinks that Europe has lit the fuse on two sticks of dynamite with this bailout deal:
First stick of dynamite: Cyprus itself. By including the small depositors in this tax the EU has created a situation that could result in serious social unrest and ultimately Cyprus leaving the euro zone.
Second stick of dynamite: The bailout draws into question the stability of deposits in the entire euro zone. Once again the political system has failed Europe and the ECB is going to have to step in.
