I was struck by what came out of the Troika this week after it finished negotiating the program with the authorities in Cyprus. This is not the first time officials bungle an element of the Cypriot rescue.
It is now clear that the endgame of financial crisis in Europe is not a game of chicken with debtor nations that threaten to leave the Euro, but rather a contentious (but one-sided) debate over how much local bank depositors will have to share in the cost of future bailouts.
The role of the Troika in bailing out governments and banks is nothing new, but the solutions put forward by EU leaders to improve the Cypriot crisis seem to be founded on little foresight, and without regard for the tragic mistakes of the past few years.
Unless you're a student of history or are planning a Mediterranean vacation, you may never have given the island of Cyprus much thought. Then suddenly, it dominated the headlines. What does a banking crisis in a small and far-off land mean to you?
Could it happen here? It's unlikely that in America you'd see that kind of outright grab on the part of the government, for any reason, (unless you think back to the gold confiscation of the 1930s). And in America, we're very aware of our deposit insurance limitations.
The debacle in Cyprus is far from over, but it's already taught us some very important lessons. We've seen, for example, that the world's financial leaders insist on clinging to the principles of austerity economics even after they've failed over and over again.
With their southern partners' economies collapse resulting in these nations being unable to purchase many imported goods, Germany has decided to pursue the only assets left to be had, namely the funds remaining in their banks.