Q: Is what Dijsselbloem said really so controversial?
A: The Dutch pride themselves on plain speaking. But perhaps Dijsselbloem is a little too blunt, given that he's in a job where one wrong word can move markets.
For instance: he has pointed out that government-insured bank deposits are only as safe as the government that's doing the insuring. True, perhaps, but unnerving for anyone living in a country with a disproportionately large banking sector — such as Luxembourg or Malta. Reasonable business owners and savers in Spain and Italy in particular may look at their governments' finances and conclude their money is simply not safe enough.
Dijsselbloem also made the argument that Cypriot depositors were "investing" their money when they put it in Cypriot banks, rather than saving it, because the banks were offering such good interest rates.
Again, that's true in some sense, but pretty academic. Should, say, everyday Germans feel they have to study the balance sheet of Deutsche Bank before they dare to open a savings account there?
Q: So did he do any lasting damage?
A: The jury's still out.
European politicians are divided over Dijsselbloem's position. Countries like Germany and other northern European nations, which have been paying the bulk of the sovereign bailouts throughout the crisis, agree with him.
Others, such as France, southern countries, the EU's executive authorities in Brussels and the European Central Bank's top officials have distanced themselves from him for fear of upsetting financial markets. Some have said his views are plain wrong.
Bank stocks and the euro have stabilized since falling sharply on his initial comments on Monday. Whatever happens next, the financial world will surely be paying closer attention to the Dutchman from now on.
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