Here's today's look at some of the top stories on markets and politics in Europe:

Turkish lira drop will mean slower growth.

Turkey's finance minister, Mehmet Simsek, said the 7.5 percent drop of the Turkish lira against the U.S. dollar since Dec. 17 had "negative implications" for the national economy and could result in "sub-trend" growth. According to Simsek, a 4 percent increase in the gross domestic product would be the best possible outcome for 2014. For Turkey, which grew more than twice as fast in 2010 and 2011, these expectations are quite low, but even they may be overoptimistic. While the weakening currency will help the country reduce its current account deficit, it is a sign of instability that is likely to scare off investors and raise the country's borrowing costs. The causes of the currency and stock market decline are there for all to see: A high-profile corruption investigation has engulfed Prime Minister Recep Tayyip Erdogan's government and is getting closer to Erdogan himself. Even if it unearths nothing to discredit Erdogan, the longer it lasts, the harder it will be for the prime minister to boast of his economic success. Erdogan is under increasing pressure to resolve the political crisis. Economic policy measures like raising interest rates could only weaken his position.

Deflation a major threat for euro area in 2014.

Three euro area economies – Greece, Cyprus and newly-added Latvia – saw negative inflation in 2013. And in all other countries in the area inflation slowed considerably. No euro economy ended the year with an inflation rate of 2 percent or more, and only the fact that Germany, Finland, Austria and the Netherlands managed to stay above the 1 percent mark prevented inflation in the euro area as a whole from sliding to zero. Along with high unemployment, the risk of debilitating deflation will be a central theme in discussions of Europe's economic performance this year. There is little the European Central Bank can do about it: Its key interest rate is already down to 0.25 percent. The governments, still focused on austerity, also have their hands tied. Exports are the only source of economic growth in Europe in the coming months, as they were last year.

Khodorkovsky goes to ground in Switzerland.

Mikhail Khodorkovsky, formerly Russia's richest man and prisoner, and recently pardoned by President Vladimir Putin, has moved from Germany to Switzerland to stay with his wife and two sons. The boys, Gleb and Ilya, go to a Swiss school, and Khodorkovsky's wife Inna has been spending most of her time in the country. The former oligarch's plan for the visit is to spend some quiet time with his family: His Swiss public relations firm, Creafactory, said he was "not to be disturbed." Khodorkovsky will also need time to track down the remains of his fortune through a vast network of investment schemes built while he was in prison. If Putin opponents in Russia hoped he would take on an active role in their movement, these hopes are proving misplaced. Khodorkovsky appears to have no plans to follow in the footsteps of that other Russian emigre to Switzerland, Vladimir Lenin.

EU wants to soften demand to separate lending from trading.

After a 15-month drafting process, European Commissioner Michel Barnier is almost ready to present his proposal for EU banking reform. According to Financial Times, the proposal no longer requires banks to separate their investment units from commercial ones. That will be up to the bank's supervisor, who would decide, based on metrics developed by the European Banking Authority, whether a bank poses a systemic risk and needs to be split up. The proposal also offers its own version of the U.S. Volcker rule, imposing a ban on proprietary trading for about 30 big banks regardless of whether they build a wall between lending and trading. The separation rules are supposed to be enacted from 2018 and the proprietary trading ban from 2020. Effectively, this means Europe will not have a single set of rules for all banks. Bankers love applying for exemptions and know how to obtain them. The Barnier proposals are yet another blow to plans to set up a unified European banking system.

Swiss central bank lost money on gold.

The Swiss National Bank announced a loss of 9 billion francs ($9.93 billion) in 2013 due to a 15 billion franc drop in the value of its gold reserves. The central bank holds 1,040 tons of gold, the seventh biggest hoard in the world, but, according to the World Gold Council, it is only 8.3 percent of Switzerland's total foreign reserves. There are countries where the share is much bigger, and thus the 2013 losses on the safe haven asset are more painful, from the U.K., whose reserves are 12.3 percent gold to Turkey (16 percent) and Venezuela (69.8 percent). Gold is as speculative an investment as any currency, though buying it does not involve trust in any issuing authority.

(Leonid Bershidsky can be reached at bershidsky@gmail.com).