In order for the E.U. area to stay together, they needed to form a banking union, which meant they needed to have a common credible deposit insurance guarantee for everybody in the E.U. area.
Athanasios Orphanides
Near-zero policy rates that may be considerably expansionary in an economy with high inflation could be contractionary when inflation is too close to zero, or worse, deflation has set in.
The degree of monetary policy ease should be associated with the level of real interest rates, not nominal interest rates.
Sometimes you have Harvard undergraduates who stun you with the depth of their knowledge. That is why it is great to be at a university like this.
My mother is from Greece: she comes from Vrahos, a small village in Kastoria.
Watching the economies in various parts of the world, I believe that there is scope for improvement everywhere. There is some corruption and inefficiency everywhere.
In my min,d there is arguably a greater risk of a default on the debt of a U.S. state than there is on the debt of a euro-area member. I consider it unthinkable that a euro-area country would default.
I would say that fears of the euro area breaking up are unfounded.
Cyprus joined the E.U. in 2004 and immediately wanted to get into the euro area for the express purpose of completing, as quickly as possible, the union with the core of Europe. It was done because the public thought that would be beneficial for political reasons, not economic reasons.
Cyprus had developed its financial center over three decades ago by having double taxation treaties with a number of countries: the Soviet Union, for example. That means if profits are booked and earned and taxed in Cyprus, they are not taxed again in the other country.
