Italian bonds rise past 'unsustainable' 7% barrier and the country enters bail-out territory, with the ECB reportedly buying country's debt and Germany under pressure to act to save monetary union. The spread between French and benchmark German bonds hits new record high of 148 basis points. When, like Italy, you have a €1.9 trillion debt pile should it really matter if the market charges you 6.7pc or 7.4pc to service it? The Telegraph's Louise Armitstead believes it may not matter to the country but it does matter to the EU. Once yields go above 7pc they rarely come down again because a self-fulfilling spiral takes hold. Once above the 7pc mark, Greece lasted just 13 days before requesting a bail-out. Ireland lasted 15 days. Portugual held out longer but succombed after 49 days. The reason that the Italian public have a right to be angry over how their country has been run: In the past, Italy used to devalue its currency to regain its competitive position, in the Euro, it cannot do that. To increase competitiveness within the Euro involves painful reform, like the wage cuts seen in Ireland. Can you see the Italians going for that solution? They have been mislead by their politicians for years, promising them the Dolce Vita. And just like the Greeks they are slowly waking up to the realisation that this promised life of pleasure was a dream that is fast disappearing as dawn breaks ... or until "the german governor" is appointed , just like in Greece's case !
Access Investments-Building Awareness - European Union-ROMANIA
Wednesday, November 9, 2011
Italy - trouble in paradise
Italian bonds rise past 'unsustainable' 7% barrier and the country enters bail-out territory, with the ECB reportedly buying country's debt and Germany under pressure to act to save monetary union. The spread between French and benchmark German bonds hits new record high of 148 basis points. When, like Italy, you have a €1.9 trillion debt pile should it really matter if the market charges you 6.7pc or 7.4pc to service it? The Telegraph's Louise Armitstead believes it may not matter to the country but it does matter to the EU. Once yields go above 7pc they rarely come down again because a self-fulfilling spiral takes hold. Once above the 7pc mark, Greece lasted just 13 days before requesting a bail-out. Ireland lasted 15 days. Portugual held out longer but succombed after 49 days. The reason that the Italian public have a right to be angry over how their country has been run: In the past, Italy used to devalue its currency to regain its competitive position, in the Euro, it cannot do that. To increase competitiveness within the Euro involves painful reform, like the wage cuts seen in Ireland. Can you see the Italians going for that solution? They have been mislead by their politicians for years, promising them the Dolce Vita. And just like the Greeks they are slowly waking up to the realisation that this promised life of pleasure was a dream that is fast disappearing as dawn breaks ... or until "the german governor" is appointed , just like in Greece's case !
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4 comments:
You can be sure the multi- milionaire oligarch Kinnochio & his family of spongers are well insulated frigthening when you think of him & his ilk multiply it by the amount in this country then to the EU all on the gravy train take take take and having created nothing while benefit cheating is totally wrong these people are just the same! Only difference they look a little bit smarter and would'nt know a days work if it smacked them in the face
I note that various harbours outside the Eurozone are allegedly filling up with Greek and possibly Italian pleasure craft.
In the same way that London is rapidly filling up with Greek, Italian and French property buyers.
Or that it is not just the Oil money that is mopping up gemstones.
Does anyone still think we should be bailing these countries out?
There is PLENTY OF MONEY washing around - it is hardly our fault that their governments are too inept or corrupt to collect it and deal with the problem.
Club Med Europe's fundamental problem is that it has promised too much to all and sundry without having the wealth creation to pay for it all. And now the wealthy are engaged full time in good olf capital flight.
Please can we just leave the EU before we are sucked into the morass?
Sleep now to gather strength for the morning;
for the morning will come. Brightly will it shine
on the brave and the true."
Sir Winston Churchill: Broadcast to the people of defeated
France after the Nazi overrun of Paris.
We must gather strength to overthrow the tyranny of the
debt based money system.
BY WILLIAM KEMBLE-DIAZ
LONDON—The euro tumbled more than two cents against the dollar during European hours as Italian government borrowing costs accelerated toward unsustainable levels, cranking up the euro zone's debt crisis by several notches.
Economically sensitive currencies like the Australian dollar and British pound also fell sharply against the in-demand dollar, shrugging off the positive after-effects of earlier weak Chinese inflation data that hinted at possible interest-rate cuts there. In addition, eastern European currencies and European shares were slammed.
In early New York trade, the euro was at $1.36
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