“Lean on principles, one day they’ll end up giving way”

OK, now an EU member has imposed capital controls against all the pillar principles behind the EU itself. They say it’s “very temporary”, just like the VAT and income tax I suppose:

“Mr Anastasiades announced on Monday night that the country would introduce capital restrictions to prevent capital flight. But he stressed that the introduction of the controls would be “a very temporary measure that will gradually be relaxed”.”

Of course, it is easy to be principled when you can pick new principles you like at any time. Apparently, the president of the eurogroup now think that it is a sound principle that the government stays out of banking:

“If I finance a bank and I know if the bank will get in trouble I will be hit and I will lose money, I will put a price on that,” Mr Dijsselbloem said. “I think it is a sound economic principle. And having cheap money because the risk will be covered by the government, and I will always get my money back, is not leading to the right decisions in the financial sector.”

One day we need a gigantic regulator of all EU banks, a banking union, the other day we need no government involvement. “Lean on principles, one day they’ll end up giving way”, as Oscar Wilde put it, seems to be OK for these EU people.

This really begs the questions; how can you stay out of banking when having a central bank? How can you stay out of banking when you are in bed with the bankers? Will the EU follow this new principle?

Of course not.

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