[QODLink]
Inside Story
Panic in the eurozone?
We discuss Germany's attempt to crack down on speculators and its impact on the economy.
Last Modified: 05 Dec 2010 16:09 GMT

Desperate times call for desperate measures. Or so it seems, as Germany unilaterally bans naked short-selling and credit-default swaps.

Short-sellers usually borrow shares that they think will fall in price in the near future. They sell them right away.

If and when the stock falls, they buy them back and return them to the lender keeping the difference in price.
 
Naked short-selling occurs when a trader sells stocks, bonds or currency without borrowing them.

And naked credit-default swaps are used to insure against losses.

Germany's announcement was meant to crack down on speculators and shore up the euro.

Instead, markets took the move as a sign of political panic sending the euro to a four-year low.

But Angela Merkel, the German chancellor, is convinced stricter regulation across Europe is the key to rescuing the embattled currency.

So, does that reflect panic in the eurozone? What are the implications on its economy?
 
Inside Story, with presenter Hazem Sika, discusses with guests Heribert Dieter, the co-director of the Warwick Commission on International Financial reform, Jacques Reland, the head of European Research at the Global Policy Institute, and Tony Avirgan of Global Policy Network.

This episode of Inside Story aired from Thursday, May 20, 2010.

Source:
Al Jazeera
Topics in this article
People
Country
Organisation
Featured on Al Jazeera
Weaving and handicrafts are being re-taught to a younger generation of Iraqi Kurds, but not without challenges.
The author argues that in the new economy, it's people, not skills or majors, that have lost value.
Colleagues of detained Al Jazeera journalists press demands for their release, 100 days after their arrest in Egypt.
Mehdi Hasan discusses online freedoms and the potential of the web with Wikipedia founder Jimmy Wales.
Featured
As nuclear age approaches eighth decade, visitors flock to historic bomb craters at New Mexico test sites.
Venezuela's president lacks the charisma and cult of personality maintained by the late Hugo Chavez.
Despite the Geneva deal, anti-government protesters in Ukraine's eastern regions don't intend to leave any time soon.
Since independence, Zimbabwe has faced food shortages, hyperinflation - and several political crises.
After a sit-in protest at Poland's parliament, lawmakers are set to raise government aid to carers of disabled youth.
join our mailing list