As Irwin Stelzer argued in a recent opinion article in the Wall Street Journal, Spain’s Prime Minister José Luis Rodríguez Zapatero seems to be an admirer of Charles Dickens's character Mr. Micawber. When asked what he plans to do about Spain’s 11.4% fiscal deficit, first he promises to extend the retirement age, only to later tell us the measure may not be necessary. Then he promises a public-sector wage freeze, only to have his Economy Minister, Elena Salgado, say he really doesn't mean exactly what he seems to say. And in any event, we shouldn’t worry too much, since given that Spain is a serious country, somehow or other the fiscal deficit will be cut to 3% by 2013, even though most serious analysts consider the economic growth numbers on which the budget plans are based to have their origins more in the dreams of an Alice long lost in Wonderland than in any kind of sobre analysis of real possibilities. "We do have a plan," deputy prime minister, Maria Teresa Fernandez de la Vega assures us, but to many that plan now seems to be little better than hoping, like the proverbial Mr. Micawber, that "something will turn up."

There is an ancient Greek legend describing the education of the common man Damocles. You see, Damocles exclaimed that, as a great man of power and authority, Dionysius (the current ruler) was truly fortunate. Thus, Dionysius offered to switch places with him for a day, so Damocles could taste first hand that fortune which he savored so fervently.

Well, I for one can't help thinking that it's now well time we all stopped getting carried away with the use of so many acronyms. Not only may one man's meat easily prove to be another's poison, it may even be that for some the entire meal will be so distasteful as to prove totally indigestable. And so it is with the latest set of proposals to appear on that diagnostic lab bench which has been hastily erected in the search for that magic "cure all" for the eurozone's many ills.

These days, I am trying to find a good lawyer so that I can sue German finance minister Wolfgang Schäuble for copyright infringement.

During my stint in D.C., I was scheming on setting up a competing monetary fund at the empty lot across the street from the IMF and call it the EMF, or Emre’s Monetary Fund. This ingenious idea never took off because somehow, I wasn’t able to solve the financing. Mr. Schäuble came up with the same acronym last week, suggesting a European Monetary Fund, which would act as a lender of last resort to cash-strapped countries such as Greece.

You probably heard the news, but if you haven't, the Turkey-IMF saga has come to an end:

http://www.imf.org/external/np/sec/pr/2010/pr1076.htm

For my part, I am really happy for my good call, done at a time the consensus view was that the agreement would be sealed in a matter of weeks, if not days:

http://www.hurriyetdailynews.com/n.php?n=fool-some-sometimes-you-can-2010-01-03

According to Bundesbank President Axel Weber, Germany’s economic recovery is “essentially intact”, and is now set to benefit from stronger demand in countries outside the euro region.

“I firmly believe that the recovery process that began in summer 2009 is essentially intact, and that it will continue despite the slower growth dynamic in the winter semester. An additional factor in this context is that the German labor market continues to be in extremely robust shape.”

Turkey suddenly came into the spotlight two weeks ago with the arrests of more than five dozen military officers, some of them still on active duty, for an alleged coup plot that would put even the most imaginative Hollywood screenwriters to shame.

The plan, codenamed sledgehammer, was alleged to include the bombing of a major mosque, planting of weapons at the headquarters of religious sects and the gunning down of a Turkish fighter jet (which would be blamed on Greece), all to create the necessary circumstances for a military takeover.

On March 5th, following Prime Minister Papandreou’s consultations with the European Commission, the European Central Bank and the IMF, the Greek parliament approved the austerity plan intended to reassure international financial markets on Greece’s creditworthiness. The plan envisages budget cuts of 4.8 billion Euros, about 2.5 points of GDP, comprising of  both expenditure cuts (one month wage cut and pensions’ freeze for public employees) and revenue increases (+ 2% on VAT , +20% on luxury goods, tobacco, alcohol, gasoline). While protests are already taking the streets, news agencies unveiled the details of the European support strategy:  a guarantee fund of 20-25 billion which would allow German KfW bank and the French Caisse des Dépôts, both publicly-owned, to underwrite the securities that markets would not be willing to roll-over. This fund would be financed by Germany (5 billion) and other Euro members (on the basis of their shares in the BCE). Meanwhile, the latest auction of ten-year Greek Treasury bonds was a success: all securities were subscribed (at a 6.4% interest rate).  Moreover, Moody's, the rating agency, decided to confirm the current A2 rating: this will allow banks to continue to use Greek debt as collateral for their refinancing operations at the ECB. These are good signs, for sure. So, is the danger (of default and contagion) over?

American officials are annoyed and deeply skeptical – not thinking that this will amount to anything.  But the future has finally arrived – or perhaps its arrival has just been announced – in the form of the European Monetary Fund.

Two months ago we wrote in our monthly letter that we anticipated social unrest will ripple through Europe as fiscal retrenchment is imposed across a number of eurozone nations. We were not kidding – it is said civilization has a thin veneer, and we do not offer such warnings lightly. These are matters of some gravity.