Business Spectator

Watching the ALP’s strange attempts to solve its leadership crisis last week, it appeared that Coalition strategists could not have written a better script. There is only one consolation for Labor: When it comes to self-destruction, nothing beats the European Union.

The haircut for depositors of Cypriot banks is not the first time the EU has thrown its own rulebook overboard. That would have been bad enough. What is worse though is that it sends a strong signal to anyone doing business in any of the eurozone’s struggling economies: get out while you still can!

Antitrust law never really made much sense anyway unless you believe in the possibility of economics textbook style ‘perfect competition’. In the real world, markets are never perfect. But where market entrance is not artificially blocked by regulations, markets are usually dynamic enough to deal with dominant positions on their own.

All the years of muddling through the European crisis have only produced sticky-tape solutions. They can hold the edifice of monetary union together for a while, but it is entirely foreseeable that it won’t last.

At the moment, monetary policy presents itself as part of the solution to the West’s sovereign debt crisis. If current policies continue much longer, it will become clear that it is part of the problem.

In recent years, however, the hitherto boring German property market has become a bit more interesting. House prices have actually increased enough to make the Germans speak of a housing boom or even a bubble

The time when Europe was a dominant force in the world are long gone, and now even Europe’s status as an important economic and political factor is being called into question.

As it turns out, even countries smaller than Greece can still turn into major headaches for Europe’s policymakers. The country in question is the island nation of Cyprus.