Consequences of the Breakup of the Euro

by Teodor Deliev and Trip Propper

The Euro is a currency union where multiple countries adopted a single currency— the euro. Though a currency union makes trade easier, it also disables individual countries from conducting monetary policy. Monetary policy in the member countries has to be conducted by the European Central Bank (ECB) since only one currency supply exists for all the countries in the Euro Zone.[1] The Euro started in 2002 and now consists of seventeen countries. However, the debt of several countries using the Euro — Portugal, Greece, Ireland— has sharply increased. Few economists believe that the Euro Zone will dissolve, but what would be the effect on the global economy if the Euro did dissolve?[2]

If the Euro Zone were to collapse, countries whose economies are performing strongly, such as Germany, could implement their own contractionary monetary policies and thus lower inflation. For example, England, which did not join the Euro Zone, is now able to use monetary policy to recover from the recession. In contrast, countries in a recession, such as Greece, could conduct expansionary monetary policies in order to increase aggregate demand and production. If Greece adopts the drachma (its currency before the euro), the government could use expansionary monetary policy to increase the supply of drachmas and thus depreciate (decrease in value) the drachma. As a result, Greek goods will become cheaper to foreigners, and Greece will produce and export more. This will stimulate Greece’s economy, increase the GDP and help the country climb out of its current recession. The collapse of the Euro Zone will also be helpful for Germany. As Germany converts back to the Deutsche mark, the demand for the Deutsche mark would increase and the demand for the other currencies would decrease. As a result the Deutsche mark would appreciate, and German imports would increase, and as a result, aggregate demand would decrease, therefore lowering inflation, which is currently high in Germany.[3]

The main negative consequences that would follow the break up of the Euro Zone are the effects of the new currencies and their exchange rates. First of all, having different currencies would hinder trade within Europe. Different currencies would have to be converted in order for countries to trade. Second, abandoning the Euro as a currency would affect consumer confidence and encourage households to “rein in their spending.”[4] A number of other countries are likely to enter into a “very serious recessions.[5] The United Bank of Switzerland predicts that the stronger countries might experience 20-25 percent contraction in GDP, while the weaker countries might suffer 50 percent contraction.[6]

Created in 1998, the Euro Zone united most of the EU members and adopted a single currency in order to encourage trade. Without different currencies, countries could not devalue their currencies and thus increase their exports. The financial crisis in 2008 brought turmoil in the Euro Zone and countries like Greece, Ireland and Portugal have experienced huge budget deficits. The ECB should implement any possible policies to keep the Euro Zone strong and to sustain healthy economies of the countries, because, if the Euro Zone collapses, countries can enter a recession “on a scale beyond modern experience in a Western democracy.”[7] However, countries such as Greece, Ireland and Portugal should withdraw from the Euro Zone in order to take control over their economies and stimulate economic growth.

Sources

“ECB: The European Central Bank”, n.d. http://www.ecb.int/ecb/html/index.en.html.

“Euro News - The New York Times.” New York Times, September 13, 2011.

http://topics.nytimes.com/top/reference/timestopics/subjects/c/currency/euro

index.html.

Ewing, Jack, and James Kanter. “In Euro Zone, Some See Risk of Currency Breakup.” The New York Times, November 17, 2010, sec. Business Day / Global Business.

http://www.nytimes.com/2010/11/18/business/global/18zone.html.

“Treasury fears effects of a euro break-up - FT.com”, n.d.

http://www.ft.com/intl/cms/s/0/eb62a6d4-eb77-11e0-a576

00144feab49a.html#axzz1aWwKUmza.

“Why collapse of the euro equals collapse of the EU – Telegraph Blogs”, n.d.

http://blogs.telegraph.co.uk/finance/andrewlilico/100011966/why

collapse-of-the-euro-equals-collapse-of-the-eu/.

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[1] “ECB: The European Central Bank”, n.d., http://www.ecb.int/ecb/html/index.en.html.

[2] Jack Ewing and James Kanter, “In Euro Zone, Some See Risk of Currency Breakup,” The New York Times, November 17, 2010, sec. Business Day / Global Business, http://www.nytimes.com/2010/11/18/business/global/18zone.html.

[3] Ibid.

[4] “Treasury fears effects of a euro break-up - FT.com”, n.d., http://www.ft.com/intl/cms/s/0/eb62a6d4-eb77-11e0-a576-00144feab49a.html#axzz1aWwKUmza.

[5] Ibid.

[6] “Why collapse of the euro equals collapse of the EU – Telegraph Blogs”, n.d., http://blogs.telegraph.co.uk/finance/andrewlilico/100011966/why-collapse-of-the-euro-equals-collapse-of-the-eu/.

[7] Ibid.

European Bank Troubles

by Ah Young Yoo and Gabrielle Reisner

When one thinks about bank troubles in Europe, one might assume that these issues have to do with short term funding problems. However, the real concern has to do with long-term lack of availability of funds and the ensuing financial impasse. Despite European banks’ efforts to issue more stable bonds since the financial crisis, the ownership of financial debt could soon prove to be a threatening problem.[1] Banks are refusing to lend because they can’t borrow due to the unknown quantity of the total debt that Greece owes. Because they cannot get any investment since the investors’ risk of not being able to retrieve the investment is very high—with instable economies of a few European countries including Greece and Portugal—the local banks are holding onto the reserves they have in case those fragile economies go into default.[2] Because of this situation, European financial markets are in limbo and have been stuck in a rather inactive state since the 2008 financial crisis, and even worse, such conditions are affecting the worldwide financial market. Reduction of banks’ lending is resulting in a decreased ability to invest in physical and financial capital, which interferes with economy’s self-recovery. Many measures have been taken in order to financially assist the local banks[3] and trigger investment into Europe; many developed countries and European countries themselves put much effort into the Europe-wide recapitalization plan, wealth transfers have been attempted, and legislation for greater fiscal coordination has been passed. However, most of the remedies were proven to be not helpful or unsustainable due to their temporary nature.

If any of the European banks were to go bankrupt due to the ownership of an overwhelming amount of Greek debt, investments would go down the drain. As a result, people would lose confidence in the Euro and the Euro would crash. An extreme long term effect could be hyperinflation.

Given above circumstances, it may be a better solution to tackle the origin of the problem. Instead of giving fleeting remedies that will only be needed once more if the problem persists, supporting Greece and other countries with turbulent economies by international funding by the IMF or more loose regulations could cure the issue from the very bottom of it.

Sources

Aglionby, John. “Eurozone Crisis.” Financial Times: October 12, 2011.

Thomas, Landon Jr. “In Euro Zone, Banking Fear Feeds On Itself.” The New York Times: September 6, 2011.

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[1] John Aglionby, “Eurozone Crisis,” Financial Times (October 12, 2011).

[2] Ibid.

[3] Landon Thomas Jr., “In Euro Zone, Banking Fear Feeds On Itself,” The New York Times (September 6, 2011)

European Financial Stabiity Facility

by Jeremy Kalas and Jeff Lee

The European Financial Stability Facility (EFSF) is an organization created by the European Union (EU) in May 2010. It is financed through the sale of bonds, which are guaranteed by the governments of the euro zone countries. Its intent is to preserve financial stability among the countries within the EU.[1] Essentially, the EFSF delivers bailouts to members of the EU that are encountering extreme financial crises. [2] The EFSF needs to be expanded because its relatively small amount of capital is not sufficient to avoid the debt crisis that is spreading throughout the EU.

On October 12, 2011, Slovakian politicians agreed to pass the bill to ratify and increase the powers of the EFSF, by increasing the amount of capital of the EFSF from 440 billion euro to 780 billion euro. Slovakia was the last of the 17 members to ratify the bill. The bill is said to be officially ratified by October 14, 2011, so the EFSF will soon be able to act and support EU members as the European debt crisis worsens.[3]

Although the EFSF currently acts as a lender, many think that the EFSF could have a greater impact if it changed its role. Currently a plan proposed by a German insurer, Allianz, is gaining support in Europe. The plan calls for the EFSF to cease being a lender, and instead become a bond insurer. If it is a bond insurer, it can most effectively use its funds, as if it only insures 20% of the bond, over 3 trillion euros in bonds can be issued using the 780 billion of capital the EFSF has. This would offer a much larger effect than the EFSF offers currently, as it can only lend up to a maximum of 440 billion euros under current provisions.[4]

The EFSF currently issues bailouts to European governments. The intent is that the governments use these funds to avoid defaulting on some other loan, as a default on bonds would disrupt bond values and would jeopardize the stability of the reserves of many European banks. Its role will most likely change over the course of the next year as European nations look for a more effective way to attack the debt crisis. Whether the ESFS gives loans or insures bonds, the EFSF gives European countries somewhat of a safety net, in that it will give governments more time to fix their respective debt crises; however, unless significant policy change to curtail the debt within a country is enacted by the governments of the countries being bailed out, the bailouts issued by the EFSF will merely prolong the inevitable. The proposed change of the EFSF from a lending facility to an insurance facility would increase the financial influence of the EFSF, given its relatively small amount of capital.

Sources

European Financial Stability Facility, “About EFSF”, n.d., http://www.efsf.europa.eu/about/index.htm. (Accessed 10/17/11)

Investopedia, “European Financial Stability Facility (EFSF) Definition,” Investopedia, n.d., http://www.investopedia.com/terms/e/european-financial-stability-facility.asp#axzz1aaFMXAqQ. (accessed 10/12/11)

Reuters. “UPDATE 5-Slovak parties reach deal on EFSF approval-TV | Reuters”, n.d., http://www.reuters.com/article/2011/10/12/eurozone-slovakia-idUSL5E7LC0JT20111012. (accessed 10/12/11)

Wall Street Journal. “2nd UPDATE: EFSF Bond Insurance Plan Gaining Traction In Europe -Allianz,” wsj.com, October 11, 2011, sec. T Wire,

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[1]European Financial Stability Facility, “About EFSF”, n.d., http://www.efsf.europa.eu/about/index.htm. (Accessed 10/17/11)

[2] Investopedia, “European Financial Stability Facility (EFSF) Definition,” Investopedia, n.d., http://www.investopedia.com/terms/e/european-financial-stability-facility.asp#axzz1aaFMXAqQ. (accessed 10/12/11)

[3]“UPDATE 5-Slovak parties reach deal on EFSF approval-TV | Reuters”, n.d., http://www.reuters.com/article/2011/10/12/eurozone-slovakia-idUSL5E7LC0JT20111012. (accessed 10/12/11)

[4]“2nd UPDATE: EFSF Bond Insurance Plan Gaining Traction In Europe -Allianz,” wsj.com, October 11, 2011, sec. T Wire, http://online.wsj.com/article/BT-CO-20111011-712197.html. (accessed 10/12/11)

Greek Sovereign Debt Default

by Jack Plumb and Uky Kim

The 2008 financial crisis devastated Greece’s already poor economy, and the Greek government is now on the verge of a default. A debt default is when a country is unable to pay its debts. The euro zone has been considering a bail out for Greece to preclude a default; however, the members of the euro zone are unable to agree on a plan. As of September 21, 2011, Greece’s debt is 366 billion Euros, which is approximately 160% of its GDP. On July 21, 2011, European leaders agreed to provide 109 billion Euros for the bailout. The potential effects of having the other euro zone countries bail out Greece could ripple across many countries’ economies; however, these effects would be minimal compared to those if Greece does default.

A Greek debt default would cause huge problems for the global economy because anyone who had lent money to Greece would lose most or all of their investment. For example, French banks that have purchased Greek bonds will lose most of their investments, causing many banks to lose huge portions of their reserves. This will drastically impact investments across Europe, because many of the impacted banks will not have the reserves to support lending, at least at low interest rates.

Because the impact of a default is so devastating and widespread, the euro zone will eventually bail out Greece; however, the other countries are waiting for Greece to do its best at recovery for two reasons. One, the other countries want to minimize the cost of a bailout by encouraging the Greek government to reduce its debt, possibly removing the need for a bailout altogether. Second, they want to wait for Greece to reform its tax system and labor laws, both of which are ineffective today. One effect the Greek default situation will have is setting a standard. Other countries, such as Spain and Portugal, which potentially have a debt default in the near future, will look to the Greek default as guide for their case.

It is obvious that Greece will need help getting out of this hole and back on track; however, there are several downsides to a bailout. First, the other countries in the euro zone, namely Germany and France, would have to pay for the bailout. Secondly, the bailout could cause the Euro to inflate due to an increase in the money supply. Although the bailout has its downsides, it is a better option than a default.

Sources

"Debts, Downturns and Demonstrations; Greece's Woes." The Economist (US) 8 Oct. 2011: 63-64. Print.

Baker, Luke. “Planning for Greek Debt Default Gathering Pace?” Reuters 21 Sep. 2011. .

Duncan, Hugo. "Greek Debt Default: Eurozone Has to Stick Together, Insists Angela Merkel." Home | Mail Online. 13 Sept. 2011. Web. 12 Oct. 2011. .

Murray, Michael. "A Greek Debt Default Could Affect American Economy - ABC News." ABCNews.com. 16 June 2011. Web. 12 Oct. 2011. .

Papademos, Lucas. “The Pitfalls of EZ Sovereign Debt Restructuring.” VOX. 26 Oct. 2011. .

"The Plan to Have a Plan: Solving the Euro-zone Crisis." The Economist 8 Oct. 2011. Print.

Brazil's Attempt To Prevent Currency Appreciation

by Henrique Sosa and James Cronin

The Brazilian government has been in a “Currency war” for the past years; it has been endeavoring to stop the real (Brazilian currency) from appreciating while not hurting other economic aspects of the country. Interest rates in Brazil have been rising in recent years, which attract large amounts of capital inflows. In the first three months of 2011, Brazil received $35 billion in net inflows—the same amount of inflows as the past year.[1] This condition has been appreciating the Brazilian real relative to the US dollar. As a strong growing economy, Brazil has also been facing high inflation rates, which have become the country’s main economic concern. To curb inflation, the central bank increased interest rates, which drew more inflows of capital[2]. The currency’s uncontrollable appreciation has increased imports dramatically and now foreign goods have grown to be 23% of market sales[3]. At the beginning of this year, Brazil began what are known as “Macro prudential actions”[4]. Such policy consists of: taxing foreign investment, and slightly increasing reserve requirements. The government raised from 2% to 6% the IOF tax on short-term capital inflows[5]. This measure attempts to depreciate the real by making it less profitable for foreigners to make short-term investments in Brazil. At the end of August, the central bank decided to cut interest rates from 12.5% to 12% to depreciate the real[6]. As a result, by October, inflation had risen to 7.31%[7].

The actions of the Brazilian central bank were quite inappropriate for the situation. Having crises with both interest rates and inflation, dealing with them directly would inevitably cause a tradeoff. If the central bank were to lower interest rates to depreciate the real, inflation would rise; if the central bank wanted to decrease inflation, it would have to raise interest rates and the real would appreciate because of a rise in foreign investment. For Brazil to get out of this situation, the government should focus on macro prudential actions. By increasing taxes on foreign investment, the real would depreciate since investment in Brazil would be less profitable. Thus, the central bank is weakening the real without affecting interest rates and raising inflation. By raising the reserve requirements mildly, the central bank is decreasing inflation gradually. The government should start acting on interest rates only once inflation has returned to its central target.

Sources

“BBC News - Brazil in surprise interest rate cut to 12%”, n.d. http://www.bbc.co.uk/news/business-14743866.

“BBC News - Brazil inflation rate climbs after interest rate cut”, n.d. http://www.bbc.co.uk/news/business-15218174.

“Brazil defends macro prudential policies | Emerging Markets”, n.d. http://www.emergingmarkets.org/Article/2795500/Brazil-defends-macro-prudential-policies.html.

“Brazil’s economy: Wild horses | The Economist”, n.d. http://www.economist.com/node/18587335.

“Foreign exchange: Unwelcome appreciation for Brazil | The Economist”, n.d. http://www.economist.com/blogs/freeexchange/2011/04/foreign_exchange.

“Mantega Threatens More Capital Controls to Prevent Brazil Currency Gains - Bloomberg”, n.d. http://www.bloomberg.com/news/2011-01-04/mantega-threatens-more-capital-controls-to-prevent-brazil-currency-gains.html.

“Protectionism in Brazil: A self-made siege | The Economist”, n.d. http://www.economist.com/node/21530144.

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[1] “Brazil’s economy: Wild horses | The Economist”, n.d., http://www.economist.com/node/18587335.

[2] “Foreign exchange: Unwelcome appreciation for Brazil | The Economist”, n.d., http://www.economist.com/blogs/freeexchange/2011/04/foreign_exchange.

[3] “Protectionism in Brazil: A self-made siege | The Economist”, n.d., http://www.economist.com/node/21530144.

[4] “Brazil defends macro prudential policies | Emerging Markets”, n.d., http://www.emergingmarkets.org/Article/2795500/Brazil-defends-macro-prudential-policies.html.

[5] “Mantega Threatens More Capital Controls to Prevent Brazil Currency Gains - Bloomberg”, n.d., http://www.bloomberg.com/news/2011-01-04/mantega-threatens-more-capital-controls-to-prevent-brazil-currency-gains.html.

[6] “BBC News - Brazil in surprise interest rate cut to 12%”, n.d., http://www.bbc.co.uk/news/business-14743866.

[7] “BBC News - Brazil inflation rate climbs after interest rate cut”, n.d., http://www.bbc.co.uk/news/business-15218174.

The US Dollar

By Colin Woolford & Keenan Roche

For a very long time, the United States’ dollar has been the “go-to” currency in the world of trade. In the past, it was more difficult for traders to calculate exchange rates for other currencies. Many traders, businesses, etc. turned to the dollar due to its established dominance in international trade and as a simpler way to come to terms of trade. As a result, the dollar has held a strong position in terms of exchange rates because the demand for U.S. dollars was extremely high from institutions like central banks of foreign nations, where it is common for the majority of the reserves to be in U.S. dollars. More recently, though, the dollar has shown signs of giving way or at least sharing dominance of international trade, specifically with the Euro and the Yuan (China’s currency). In his article entitled “Why the Dollar’s Reign Is Near an End,” Barry Eichengreen writes, “Changes in technology are undermining the dollar’s monopoly.” When traders did not have the technological means to convert a given currency to another, people naturally turned to the dollar. Now, however, he argues that handheld devices and computers can do most everything; the key to coming to terms of trade with foreign currencies is now held in computers if not quite literally in one’s pocket through modern innovations such as smartphones and their economic applications. With China’s growing presence in the global economy putting the Yuan on the forefront of international trade and the seemingly limitless possibilities presented by modern technology, it seems as though the dollar will soon be at least sharing its dominant spot at the top of the international currency pyramid.

In this difficult time of economic instability, the United States has run an enormous balance of trade deficit of nearly $600 billion annually. With unemployment rates near 10 percent, President Obama’s administration has talked a lot about increasing exports in the next five years to almost double what the U.S. exports today, but his administration has done little to make that happen. Twice in the past 40 years has the United States weakened the dollar to help its economy - once by Nixon in 1971 and again by Secretary Baker in 1985. Today the weakening of the US dollar by 10 to 20 percent could generate one to three million new jobs in the US.[1] The exchange rate is an extremely helpful tool that we haven’t used yet and will help the nation enormously. The only way to avoid a double dip recession and bankruptcy is to attack our trade deficit and increase our interest in exports in our foreign policy by weakening the dollar. While it might be easier to see that the U.S. dollar might soon lose its place as the best option for international trade, it seems as though the exchange rates for the dollar is bound to drop, as well. If the Yuan begins to emerge and contend for dominance in foreign trade, it would make sense that central banks worldwide would begin to lessen the percentage of reserves in dollars and begin to hold more reserves in the form of Yuan, and euros, as well. The weakening of the U.S. dollar might sound like terrible news with no positives coming out of it. However, there might be some benefits to the dollar weakening; a subsequent lowering of prices for U.S. goods would lead to foreign buyers looking to the U.S. to buy goods, which would mean more inflows for Americans, and less outflows too, because of the lower purchasing power of the dollar that was explained earlier. More exports and inflows would begin a strengthening phase for the U.S. economy.

Sources

Eichengreen, Barry. “Why The Dollar’s Reign is Near An End.” Wall Street Journal – Foreign Exchange Report. March 2, 2011. http://online.wsj.com/article/SB10001424052748703313304576132170181013248.html

Bergstein, C. Fred. “An Overlooked Way to Create Jobs” The New York Times – The Opinion Pages. September 28, 2011. http://www.nytimes.com/2011/09/29/opinion/an-overlooked-way-to-create-jobs.html?_r=1&scp=7&sq=US%20dollar%20exchange%20rate&st=ce

The Economist. Exchange Rates: Forty Years of Hurt. May 4, 2011. http://www.economist.com/blogs/dailychart/2011/05/exchange_rates

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[1] Bergstein, C. Fred. “An Overlooked Way to Create Jobs” The New York Times – The Opinion Pages. September 28, 2011. http://www.nytimes.com/2011/09/29/opinion/an-overlooked-way-to-create-jobs.html?_r=1&scp=7&sq=US%20dollar%20exchange%20rate&st=cse

Tobin Tax in Europe?

by Julia Pascale and Chase Hodge-Brokenburr

The point of the Tobin Tax, a tax on financial transactions proposed by liberal American economist James Tobin in 1972, is to discourage speculators in the foreign exchange market.[1] Originally, Tobin suggested that the tax be less than .1% of the volume of the transaction.[2] The following is the argument of those who support the tax. This tax would protect smaller countries from exchange-rate volatility caused by speculators, and strengthen financial sectors in developing economies.[3] Another benefit of the tax would be a revenue increase: supporters of the tax in Europe say that the tax would generate 200 billion Euros of revenue; while doubters say only 50 billion Euros would arise from the tax.[4][5] Leaders in Belgium, Germany and France endorse the tax; while the majority of British feel that the idea is “bonkers.”[6]

The Tobin tax has also met considerable opposition as it was proposed during the unveiling of the European Union budget for 2014 to 2020. The tax was originally proposed as “a levy on foreign transactions, to discourage speculative activity”[7] but is now seen by (refuters) as a tax that would “hit pension funds and other ‘long only’ savings vehicles”[8]. This will happen because the tax will apply to “all financial transactions including those on behalf of pension and investment funds”[9]. Even though the purpose of the tax is to stop fluctuations in price and thus benefit Europe, many believe that the Tobin tax may be disruptive and hurtful to the European economy. The tax is also viewed as " unworkable (too easy to avoid and likely to drive financial activity underground beyond regulatory oversight) and counterproductive (the reduction in liquidity would make asset prices more volatile)"[10]. Some believe that the banks would simply ignore the tax by "pass[ing] much of the cost on to their consumers and shift[ing] their internal hedging transactions out of Europe" while big corporations also perform their transactions abroad. The target of this legislation, the financial speculators, would also move off shore leaving the European Union with a worthless and pointless tax.

We believe that the Tobin Tax is a terrible idea. It’s unlikely that problematic financial transactions would be significantly reduced, and beneficial financial transactions certainly would be. Despite good intentions, this idea should be put to bed again.

Bibliography

Cave, Tim. “Panic grows over plans for European ‘Tobin Tax’”, July 13, 2011. http://www.efinancialnews.com/story/2011-07-13/panic-grows-over-plans-for-european-tobin-tax.

“Home | Say yes to FTT in Europe”, n.d. http://www.financialtransactiontax.eu/.

Masters, Brooke. “Warning of unintended outcomes of Tobin tax - FT.com.” Financial Times, October 5, 2011. http://www.ft.com/intl/cms/s/83379920-edde-11e0-a491-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F83379920-edde-11e0-a491-00144feab49a.html&_i_referer=#axzz1aZ8jHU1o.

Pimlott, Daniel. “Q & A on Tobin tax - FT.com”, November 8, 2009. http://www.ft.com/intl/cms/s/8e68678a-ccba-11de-8e30-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F8e68678a-ccba-11de-8e30-00144feabdc0.html&_i_referer=#axzz1QPpONaJR.

The Economist. “The EU’s Budget: Stuck on Tobin again | The Economist.” The Economist, June 30, 2011. http://www.economist.com/blogs/freeexchange/2011/06/eus-budget.

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[1] Daniel Pimlott, “Q & A on Tobin tax - FT.com”, November 8, 2009, http://www.ft.com/intl/cms/s/8e68678a-ccba-11de-8e30-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F8e68678a-ccba-11de-8e30-00144feabdc0.html&_i_referer=#axzz1QPpONaJR.

[2] Ibid.

[3] Tim Cave, “Panic grows over plans for European ‘Tobin Tax’”, July 13, 2011, http://www.efinancialnews.com/story/2011-07-13/panic-grows-over-plans-for-european-tobin-tax.

[4] “Home | Say yes to FTT in Europe”, n.d., http://www.financialtransactiontax.eu/.

[5] Cave, “Panic grows over plans for European ‘Tobin Tax’.”

[6] Ibid.

[7] Brooke Masters, “Warning of unintended outcomes of Tobin tax - FT.com,” Financial Times, October 5, 2011, http://www.ft.com/intl/cms/s/83379920-edde-11e0-a491-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F83379920-edde-11e0-a491-00144feab49a.html&_i_referer=#axzz1aZ8jHU1o.

[8] The Economist, “The EU’s Budget: Stuck on Tobin again | The Economist,” The Economist, June 30, 2011, http://www.economist.com/blogs/freeexchange/2011/06/eus-budget.

[9] Masters, “Warning of unintended outcomes of Tobin tax - FT.com.”

[10] The Economist, “The EU’s Budget: Stuck on Tobin again | The Economist.”