According to Professor Tyler Cowen, the Great Recession was caused by a number of different factors. Cowen outlines 4 distinct and complicated problems which led to the downturn:
• A drop in the aggregate demand (http://en.wikipedia.org/wiki/Aggregat…)
• A “horribly” performing banking sector
• Problems with monetary policy
• An increase in the “risk premium” (http://en.wikipedia.org/wiki/Risk_pre…)
Prof. Cowen explains why one economic model isn’t sufficient to explain the economic downturn. He shows how several different economic models can be used to explain both the cause and the effects of the recession.
May 16, 2013
May 4, 2013
In one word, taxes:
What a crazy world. Apple, a company with $145 billion of cash, is issuing some $17 billion of debt to buy back its own shares. Why doesn’t it just use its cash to do the same thing? First, because a lot of that cash is overseas, and bringing it back to America would incur a tax charge. Second, because interest rates are low and debt interest is tax-deductible, making this look a great arbitrage.
But think of it from the point of view of the hard-working American taxpayer. Apple’s money will still sit overseas and not be invested at home to create jobs. Apple’s tax bill will fall, as it offsets the interest payments against its profits. The buy-back will probably push up the share price in the short term, boosting the value of executive options; profits from those options will probably be taxed at the long-term capital gains tax rate of 15%, lower than the rate many workers pay. Organising a bond issue, rather than using a company’s own cash, incurs costs in the form of fees to bankers on Wall Street; the same bankers taxpayers helped support five years ago.
April 24, 2013
John Kay works through the short list of options about money that a newly independent Scotland would need to decide about:
Speculation about Scotland’s currency future would begin on the day Scotland voted for independence — or the day on which a poll showed that this result was likely. Scotland would have three main options — the euro, the pound sterling, or its own distinct money.
The euro is the official currency of the EU, and Scotland would in principle be committed to its adoption. But there would be little enthusiasm for that course in either Edinburgh or Brussels, and Scotland — like the UK — would not meet the criteria on debt and deficits for joining the euro. A vague Scottish aspiration to join the single currency at some distant date would probably satisfy everyone.
The sensible outcome would be continued currency union with England — or with the entity that, in deference to Wales and Northern Ireland, participants in the Scottish debate call rUK — rest of UK. Scotland might ask for — and get — a Scottish economist on the Bank of England’s Monetary Policy Committee (not a representative of Scotland — the rules of the committee preclude representative roles). But that would be the extent of Scottish influence on monetary policy.
[. . .]
If I represented the Scottish government in the extensive negotiations required by the creation of an independent state, I would try to secure a monetary union with England, and expect to fail. Given experience in the eurozone, today’s conventional wisdom is that monetary union is feasible only as part of a move towards eventual fiscal union. But desire to break up fiscal union was always a major — perhaps the principal — motive for independence in the first place.
Scotland could continue to use the pound unilaterally, whether the Bank of England liked it or not — as Ecuador uses the dollar and Montenegro the euro. But this is not really an attractive course, and the only countries that have adopted it are those — such as Ecuador and Montenegro — whose monetary histories are so dire that they prefer to entrust their policies to foreigners.
April 22, 2013
I’ve said it before, spreadsheets are great organizing tools and provide opportunities for both financial whizzes and ordinary folks to make splashy, expensive errors:
Microsoft Excel makes it easy for anyone to do the kind of number crunching once reserved for accountants and statisticians. But the world’s best-selling spreadsheet software has also contributed to the proliferation of bad math.
Close to 90% of spreadsheet documents contain errors, a 2008 analysis of multiple studies suggests. “Spreadsheets, even after careful development, contain errors in 1% or more of all formula cells,” writes Ray Panko, a professor of IT management at the University of Hawaii and an authority on bad spreadsheet practices. “In large spreadsheets with thousands of formulas, there will be dozens of undetected errors.”
Given that Microsoft says there are close to 1 billion Office users worldwide, “errors in spreadsheets are pandemic,” Panko says.
Such mistakes not only can lead to miscalculations in family budgets and distorted balance sheets at small businesses, but also might result in questionable rationales for global fiscal policy, as indicated by the case of a math error in a Harvard economics study. By failing to include certain spreadsheet cells in its calculations, the study by Harvard economists Carmen Reinhart and Kenneth Rogoff may have overstated the impact that debt burdens have on a nation’s economic growth.
There’s a reason I nominated Microsoft Excel as “The Most Dangerous Software on Earth“.
April 21, 2013
In the Telegraph, Jeremy Warner pokes a bit of fun at the EU’s self-inflicted media pratfalls over the Cypriot banking “bailout”:
For the last time, I never used the word “template”. Thus said Jeroen Dijsselbloem, President of the Eurogroup, at his IMF press conference on Saturday. This is about whether the troika’s disastrous mishandling of the Cypriot bailout should be used as a model for future banking insolvencies in the eurozone. The row shows no sign of abating. OK, so Mr Dijsselbloem never did use the word “template” in originally welcoming the Cypriot defenestration, but that’s what he meant, forcing him quickly to backtrack when it was pointed out to him that his remarks might prompt a run on banks elsewhere in the eurozone.
But hold on a moment. Wolfgang Schauble, the German finance minister, said on Friday that Cyprus did provide a model in terms of bailing in depositors, so who’s right? Well it is sort of a model, Mr Dijsselbloem said at his IMF press conference, in the sense that common principles would in future be applied to banking resolution, but each case would no doubt be different and have its own defining characteristics. All clear now?
April 15, 2013
In the Globe and Mail Tabatha Southey hears the laments of readers “We need a new John Steinbeck for the Great Bitcoin Depression”, and she delivers:
Pa was a simple man, a techno-anarchist by trade, and long after the Bitcoin bust, he stayed on with the mining. “Don’t know nothin’ else,” Ma said, although she once suggested migrant IT work, at least until her own contract was renewed at the hospital where she worked most of her grown days for a pediatric endocrinologist’s wage.
Pa sat on the sofa, the whir of the computer fans all but drowning out the Cato Institute podcast he’d downloaded the night before. He’s there, frozen in my childhood, Pa, mining, mining, mining, with nothing but his iPhone, his laptop and, for a while, my sister’s old Tamagotchi, which he found in the couch cushions while looking for the remote, to amuse him.
Dodging viruses like crop-dusters, Pa is experiencing hard times. He never did come to trust that ol’ anti-virus software. Said it was reporting on him to the Federal Reserve. And always the dust, the dust, the dust, which may have been because Pa never did get round to changing the furnace filters. His time, he said, best spent elsewhere.
Pa, oh, Pa. He never did stop spreading the word of Ron Paul on completely unrelated news items.
April 12, 2013
A brief overview of the much-talked-about digital currency:
BITCOIN, the world’s “first decentralised digital currency”, was launched in 2009 by a mysterious person (or persons) known only by the pseudonym Satoshi Nakamoto. It has been in the news this week as the value of an individual Bitcoin, which was just $20 at the beginning of February, hit record highs above $250, before falling abruptly to below $150 on April 11th. What exactly is Bitcoin, and how does it work?
Unlike traditional currencies, which are issued by central banks, Bitcoin has no central monetary authority. Instead it is underpinned by a peer-to-peer computer network made up of its users’ machines, akin to the networks that underpin BitTorrent, a file-sharing system, and Skype, an audio, video and chat service. Bitcoins are mathematically generated as the computers in this network execute difficult number-crunching tasks, a procedure known as Bitcoin “mining”. The mathematics of the Bitcoin system were set up so that it becomes progressively more difficult to “mine” Bitcoins over time, and the total number that can ever be mined is limited to around 21m. There is therefore no way for a central bank to issue a flood of new Bitcoins and devalue those already in circulation.
And a bit more technical detail:
All transactions are secured using public-key encryption, a technique which underpins many online dealings. It works by generating two mathematically related keys in such a way that the encrypting key cannot be used to decrypt a message and vice versa. One of these, the private key, is retained by a single individual. The other key is made public. In the case of Bitcoin transactions, the intended recipient’s public key is used to encode payments, which can then only be retrieved with the help of the associated private key. The payer, meanwhile, uses his own private key to approve any transfers to a recipient’s account.
This provides a degree of security against theft. But it does not prevent an owner of Bitcoins from spending his Bitcoins twice—the virtual analogue of counterfeiting. In a centralised system, this is done by clearing all transactions through a single database. A transaction in which the same user tries to spend the same money a second time (without having first got it back through another transaction) can then be rejected as invalid.
The whole premise of Bitcoin is to do away with a centralised system. But tracking transactions in a sprawling, dispersed network is tricky. Indeed, many software developers long thought it was impossible. It is the problem that plagued earlier attempts to establish virtual currencies; the only way to prevent double spending was to create a central authority. And if that is needed, people might as well stick with the government devil they know.
To get around this problem, Bitcoins do not resemble banknotes with unique serial numbers. There are no virtual banknote files with an immutable digital identity flitting around the system. Instead, there is a list of all transactions approved to date. These transactions come in two varieties. In some, currency is created; in others, nominal amounts of currency are transferred between parties.
April 9, 2013
In the New Yorker, Maria Bustillos reviews the history of bitcoins:
In many ways, bitcoins function essentially like any other currency, and are accepted as payment by a growing number of merchants, both online and in the real world. But they are generated at a predetermined rate by an open-source computer program, which was set in motion in January of 2009. This program produced each one of the nearly eleven million bitcoins in circulation (with a total value just over a billion dollars at the current rate of exchange), and it runs on a massive peer-to-peer network of some twenty thousand independent nodes, which are generally very powerful (and expensive) G.P.U. or ASIC computer systems optimized to compete for new bitcoins. (Standards vary, but there seems to be a consensus forming around Bitcoin, capitalized, for the system, the software, and the network it runs on, and bitcoin, lowercase, for the currency itself.)
[. . .]
There is an upper limit of twenty-one million new coins built into the software; the last one is projected to be mined in 2140. After that, it is presumed that there will be enough traffic to keep rewards flowing in the form of transaction fees rather than mining new coins. For now, the bitcoins are initially issued to the miners, but are distributed when miners buy things with them or sell them to non-miners (such as jumpy Spanish bank depositors) who desire an alternative currency. The chain of ownership of every bitcoin in circulation is verified and registered with a timestamp on all twenty thousand network nodes. This prevents double spending, since no coin can be exchanged without the authentication of some twenty thousand independent cyber-witnesses. In order to hack the network, you would have to deceive over half of these computers at the same time, a progressively more difficult task and, even today, a very formidable one.
[. . .]
A casual review of Nakamoto’s various blog posts and bulletin-board comments also confirms that, from the first, Bitcoin was devised as a system for removing the possibility of corruption from the issuance and exchange of currency. Or, to put it another way: rather than trusting in governments, central banks, or other third-party institutions to secure the value of the currency and guarantee transactions, Bitcoin would place its trust in mathematics. At the P2P Foundation, Nakamoto wrote a blog post describing the difference between bitcoin and fiat currency:
[Bitcoin is] completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust. The root problem with conventional currency is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts… With e-currency based on cryptographic proof, without the need to trust a third party middleman, money can be secure and transactions effortless.
* * *
Much of what has been written so far about bitcoins has centered on the perceived dangers of their relative anonymity, the irreversibility of transactions, and on the fact that they can be used for money laundering and for criminal dealings, such as buying drugs on the encrypted Web site Silk Road. This fearmongering is a red herring, and has so far prevented the rational evaluation of the potential benefits and shortcomings of crypto-currency.
Cash is also anonymous; it is also used in money laundering and illegal transactions. Like bitcoins, stolen cash is difficult to recover, and a cash transaction can’t readily be traced back to the source. Nor is there immediate recourse for the reversal of transactions, as with credit-card chargebacks or bank refunds when one’s identity has been stolen. However, I find it difficult to believe that anyone who has written critically of the dangers of bitcoin would prefer an economy where private cash transactions are illegal.
Update: Meet the $2 Million Bitcoin Pizza.
Floridian Laszlo Hanyecz thought it would be “interesting” to be able to say he paid for a pizza in bitcoins. He worked out a deal where he transferred 10,000 of his bitcoins to a guy in England, who ordered him two pizzas from Papa Johns.
Today, one Redditor notes, those 10,000 bitcoins would be worth about $2.3 million, thanks (in part) to folks fleeing unstable and politically risky state currencies in Cyprus and elsewhere.
Some news outlets are covering this as a “doh!” story. But these pizzas were a huge publicity boon for Bitcoin, contributing to the success of the currency today. If Lazslo had been a hoarder, perhaps his bitcoins would be worth very little now. Cashing in bitcoins for pizza when they were worth a fraction of a cent each is not obviously smarter or stupider than selling now would be, with bitcoins trading at $234. It’s a bet on which way the market is headed, that’s all.
April 1, 2013
Not only can it happen here, but Stephen Harper’s Conservative government is making it explicit that it will happen here:
The politicians of the western world are coming after your bank accounts. In fact, Cyprus-style “bail-ins” are actually proposed in the new Canadian government budget. When I first heard about this I was quite skeptical, so I went and looked it up for myself. And guess what? It is right there in black and white on pages 144 and 145 of “Economic Action Plan 2013″ which the Harper government has already submitted to the House of Commons.
This new budget actually proposes “to implement a ‘bail-in’ regime for systemically important banks” in Canada. “Economic Action Plan 2013″ was submitted on March 21st, which means that this “bail-in regime” was likely being planned long before the crisis in Cyprus ever erupted. So exactly what in the world is going on here? In addition, as you will see below, it is being reported that the European Parliament will soon be voting on a law which would require that large banks be “bailed in” when they fail. In other words, that new law would make Cyprus-style bank account confiscation the law of the land for the entire EU.
I can’t even begin to describe how serious all of this is. From now on, when major banks fail they are going to bail them out by grabbing the money that is in your bank accounts. This is going to absolutely shatter faith in the banking system and it is actually going to make it far more likely that we will see major bank failures all over the western world.
What you are about to see absolutely amazed me when I first saw it. The Canadian government is actually proposing that what just happened in Cyprus should be used as a blueprint for future bank failures up in Canada.
March 31, 2013
At Forbes, Tim Worstall has some thoughts on the oddities now apparent in how the Cyprus banking crisis has played out so far:
Now that we’re seeing the real numbers coming out about who loses what in the Cyprus haircut/bank consolidations there’s something very strange about the numbers. Whiffy even, and that’s not with a good odour to it either. For, as far as I can tell at least, the haircuts are far larger than they need to be in order to make good the damage that we were told about. I’m therefore coming around to the idea that this wasn’t what we’ve been told it was, a story of Russian offshore deposits and tax avoidance. Rather, it’s two banks which invested regular domestic deposits into just terrible opportunities and then lost it all.
I don’t think I can make the case absolutely but I think it’s a case worth at least investigating.
[. . .]
But back to the point I’m trying to work through here. We’ve been told that the immediate cause was all about all that foreign money which flooded the country’s banking system. Yet when we look at the amount that is being raised by the haircuts it doesn’t look as if the two bankrupt banks had all that much of those foreign deposits. It looks very much like the banks which had the deposits didn’t invest badly and thus didn’t go bankrupt. So the problem isn’t therefore one of all that foreign money.
Rather, it’s a problem of where those two banks invested their deposits. And it looks as if this was largely in Greek Government and Cypriot Government bonds. Which is why they are bust.
March 29, 2013
In sp!ked, Bruno Waterfield talks about the EU’s most recent involuntary experimental subject, Cyprus:
Every negative European political trend has deepened in the latest round of the Eurozone crisis, as Cyprus has been treated by the EU with a disdain for self-determination worthy of the high age of imperialism. It is this which is really troubling, not the haircuts for depositors or the bank closures. In effect, an entire island nation has been made a laboratory rat for a new Eurozone experiment in rebalancing economies in the EU single currency — whether the Cypriots like it or not.
Cyprus is the perfect fall guy for the EU and IMF experts who, despite the mess in Greece and elsewhere in southern Europe, still believe they know best how to run a nation’s affairs. That’s because, as well as being too small to count, especially for the markets, Cyprus is easily painted as a bad guy, a swarthy, even Levantine crook which launders dirty Russian money (nearly a third of Cypriot bank deposits) for ‘dodgy’ oligarchs. This whiff of corruption (nothing new to Cyprus, or other European banks for that matter) provides the perfect pretext for treating Cyprus as a case apart. This is meant to soothe the fears of senior northern European debt holders — it is corrupt Cyprus, and not failed private risk in general, that has been targeted.
So, because it is small, and in the eyes of the Eurozone social engineers, easily contained, Cyprus has been selected to be an experiment, potentially a model for Portugal or Spain. And if it all goes horribly wrong… well, Cyprus is small and a dodgy special case, so who cares? The EU doesn’t.
March 25, 2013
With a blog post entitled “THE CYPRUS HEIST GOES THROUGH: And it’s an Orwellian masterpiece“, you could say that this is an unfair summary of the situation:
Somewhere, George Orwell is spinning in his grave — although he wouldn’t be even remotely surprised by the 1984-style nonsense being hailed as a compromise by the Troikanauts and Nicosia’s embarrassed leaders.
This is the deal: the levy is
called something elsescrapped, and none of the deposits below €100,000 will be stolenincluded.
lunacyidea sees Laiki Bank closed. The entirety of its €4.2bn in deposits over €100,000 will be placed in a “bad bank”: why you would put healthy deposits in a bad bank eludes me, but we’re really just moving the stash around here: the bad bank’s resources will be confiscated. We’re talk a 100% haircut for all these savers.
And don’t be fooled by the Berlin propaganda about Russian money-laundering. First up, being a rich Russian doesn’t automatically make you a crook; and secondly, nowhere near all — possibly under half — are Russian anyway: UBS, several Israeli banks, a number of French banks will have depositor’s money taken out of them to pay for the ambitions of Brussels-am-Berlin.
There’s more: all the bondholders in Laiki also take a 100% haircut.
[. . .]
Entirely appropriate however was the choice of Wolfgang Schäuble to face the cameras and ‘explain’ why none of this would need the approval of the Cypriot Parliament. Just “approved by the 17 eurozone finance ministers comparatively quickly, after about two hours of further deliberations”. As to why it needed FinMin approval (but not that of the citizens’ representatives) get a load of this for jargonised bollocks:
“This plan will not require the approval of the Cypriot parliament because the losses on large depositors will be achieved through a restructuring of the island’s two largest banks and not a tax.”
In Cyprus the word you hear most often is ‘betrayal’. There is an acceptance that Cyprus made mistakes but the people feel punished,
— Gavin Hewitt (@BBCGavinHewitt) March 25, 2013
Update: I think Tyler Cowen gets it exactly correct here:
The capital controls will have to be strict. What will the price of a Cypriot euro be, relative to a German euro? 50%? I call this Cyprus leaving the euro but keeping the word “euro” to save face. And yet they fail to reap most of the advantages of leaving the euro, such as having an independent monetary policy.
March 24, 2013
In the Telegraph, Colin Freeman looks at how the banking crisis is impacting ordinary Cypriots and retired EU citizens in Cyprus:
Last weekend, the small Mediterranean island was plunged into the epicentre of the eurozone crisis when Brussels finance chiefs, led by Germany, demanded a levy of up to ten per cent of savers’ deposits in return for a 10bn euro bail-out of the country’s ailing banks. The move left many of Cyprus’s 60,000-strong British community facing heavy losses on retirement nest eggs — and as the week rolled on, that looked like being just the least of their worries.
On Thursday, unhappy at the Cypriot parliament’s rejection of the deal, Europe’s Central Bank then threatened to cut financial life support for the island altogether, a move that would have led to its banking sector collapsing, and savers losing not just a percentage of their money, but all of it. It was only thanks to a last-minute agreement hammered out on Friday night, which is expected to restructure the country’s banks and restrict the levy to deposits of more than 100,000 euros, that all-out chaos was averted. For now, anyway.
[. . .]
Since last weekend, when all of Cyprus’s banks were shut to stop a run on withdrawals, work has ground to a halt, as the repair man has been unable to buy in the materials he needs from suppliers, who are all now demanding cash. The job symbolises the malaise of the wider Cypriot economy, built on shaky foundations, and now in a state of paralysis, with thousands of shops, businesses and restaurants unable to operate properly because of the financial uncertainty.
“None of my food and drink suppliers are taking bank payments any more,” said Yiota Vrasida, 43, who owns a café in the winding streets of the capital, Nicosia. “We can keep going until this weekend, but that is about it.”
[. . .]
“Nobody will want to leave so much as 10 euros in any Cypriot bank any more,” said Dino Karambalis, 49, an IT worker, standing at the end of a 30-people-long queue at the Laiki Bank, where he had 90,000 euros in savings. “They say this levy is only for Cyprus, but why should anyone believe that? This is undermining confidence in the euro as a whole, and in the whole EU project itself. I was pro-European before, but not now.”
This weekend, the Cypriot parliament sought to reassure smaller savers, saying those with less than 100,000 euros would face at most a levy of less than one percent. State television also talked of a one-time charge of up to 25 percent on savings of over 100,000 euros held at the Bank of Cyprus. With that in mind, capital controls will be imposed to stop a run on the banks when they reopen next week.
But whatever new measures come in, some damage has already been done by declaring savers’ accounts to be fair game in the first place. Britain’s Business Secretary, Vince Cable, warned on Friday that it could lead Northern Rock-style runs on banks all over the eurozone in future.
March 22, 2013
In the Telegraph, Thomas Pascoe summarizes the situation in Cyprus as of Friday morning:
As it stands this morning, there is a Plan B on the table after parliament voted down the proposal that every bank deposit in the country be subject to a deduction. The new plan only affects those with deposits over €100,000; however, it will require those depositors to take a loss of up to 40pc. As part of this package, the nation’s two large banks will be saved. However, the structure of the deal requires that one of the pair, Laiki, will be split into “good” and “bad” banks, with large depositors left to chance it in the bad bank.
A word on the thinking behind it. While you and I perceive deposits as secure money (and I have argued that to touch them is an abuse of power), technocrats in Brussels take a different view. They tend to view deposits in the technical sense of being loans to banks. You give the bank your money in exchange for interest, and can call the loan at any time (provided not everyone else is doing the same thing, which is the situation now). The bank loans most of your deposit on again. When countries struggle with too much debt, those who have loaned them money get “haircuts”, or less back than they gave. Following this thinking, the EU’s argument is that if we lend money to failing banks, we too must take a haircut to keep them solvent.
[. . .]
So the compromise deal is an ugly one, involving a precedent (confiscation of deposits) which will cast a pallor over the entire European banking system. But the problems are equally great with any other solution. If the banks are left to fail, depositors lose everything except the scraps recovered by administrators. To argue that they, and the country, must be funded directly by the EU, requires the continued willingness of Germany to act against its own economic interests and support an entire continent on its shoulders, impossible without fiscal and political consolidation which no electorate would assent to at present (not that they are asked, usually).
In my opinion, there is no faster way to destroy confidence in your retail banking sector than stealing the money from depositors with no recourse. I have no idea why the European Union is so hell-bent on crushing the banks, but perhaps they have some looney-tunes notion that they can supplant the existing bank system with something directly operated by the ECB or the EU itself.
March 21, 2013
In Forbes, Tim Worstall sums up the real problem facing Cypriots:
There’s a very large portion of the European political elite who believe, take on faith (for there’s certainly no convincing real world evidence about it) that the creation of the euro is part of the inevitable creation of the European State. And as such it is entirely irreversible. It’s not just that people once in the euro shouldn’t leave it: it’s that it is simply inconceivable that anyone ever would leave it. Either wish to leave it or be allowed to leave it.
Wherein lies the danger to said European dreams and it’s tiny Cyprus that poses said danger.
As both Krugman and Yglesias point out, the Cypriot banking system is bust, gone. Even if it needn’t have happened this way having the system closed for at least a week is going to lead to bank runs when they finally reopen. The economy is most certainly going to stutter if not be deeply depressed as a result of that banking system going. Given that a substantial part of the economy is about offshore finance, and that that’s not going to survive the banking system crash, there will also, whatever else happens, be substantial declines in GDP.
It’s most certainly true that leaving the euro will cause all of those things to happen. But if they’re going to happen anyway then why not leave the euro? Why not bring back the Cyprus Pound? That is, do an Iceland?
[. . .]
But here’s the thing: there’s still that religious insistence among the federasts that the euro is irreversible, a part of the future of the politics and economy of the continent. And if Cyprus does leave and does recover without too much paid then what reason for Greece, or Spain, Portugal, to stay in? If going bust and going back to one’s own currency is, as Iceland showed (although they kept, rather than went back to), less painful that the austerity required to stay in the euro then, well, why stay in the euro?