Eurozone unemployment hits new euro era high --- More data from the eurozone: inflation in the 17-nation currency bloc remained steady for a third month in July at 2.4%. But unemployment rose in June, with another 123,000 people out of work across the eurozone, according to Eurostat figures. The jobless rate hit 11.2%, a new euro era high. There are huge divergences - in Austria unemployment is just 4.5% of the working population while in Spain it is 24.8%, the highest level in the eurozone....EFSF holds auctionThe European Financial Stability Facility today held a tap via auction. The reopening was in relation to a 3-year bond which was initially placed on 24 May for €3bn. Today’s auction raised an additional €1.48bn. Investor demand was high with over €5.47bn in bids received. The weighted average price was 101.63% and the average yield was 0.54%. The bid/cover ratio was 3.7. The funds raised will be used to support struggling EU member states....Capital flight from Spain gathers paceCapital outflows from Spain gathered pace in May with the rescue of one of the country's biggest banks. Outflows rose to €41.3bn, according to the latest Bank of Spain data. Between January and May, a total of €163bn left Spain - equivalent to 16% of economic output - as the country's banks sent money abroad, foreign lenders pulled out cash and investors dumped Spanish assets....Greece running out of cash. Greece is rapidly running out of cash, its deputy finance minister admitted today. Its European partners have promised the country will be funded through August when it must repay a €3.2bn bond, but the details have not been disclosed yet. Without that money, Greece would run out of funds to pay its wage bill for public sector workers, pensions and social benefits.
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Thursday, August 2, 2012
Eurozone unemployment hits new euro era high --- More data from the eurozone: inflation in the 17-nation currency bloc remained steady for a third month in July at 2.4%. But unemployment rose in June, with another 123,000 people out of work across the eurozone, according to Eurostat figures. The jobless rate hit 11.2%, a new euro era high. There are huge divergences - in Austria unemployment is just 4.5% of the working population while in Spain it is 24.8%, the highest level in the eurozone....EFSF holds auctionThe European Financial Stability Facility today held a tap via auction. The reopening was in relation to a 3-year bond which was initially placed on 24 May for €3bn. Today’s auction raised an additional €1.48bn. Investor demand was high with over €5.47bn in bids received. The weighted average price was 101.63% and the average yield was 0.54%. The bid/cover ratio was 3.7. The funds raised will be used to support struggling EU member states....Capital flight from Spain gathers paceCapital outflows from Spain gathered pace in May with the rescue of one of the country's biggest banks. Outflows rose to €41.3bn, according to the latest Bank of Spain data. Between January and May, a total of €163bn left Spain - equivalent to 16% of economic output - as the country's banks sent money abroad, foreign lenders pulled out cash and investors dumped Spanish assets....Greece running out of cash. Greece is rapidly running out of cash, its deputy finance minister admitted today. Its European partners have promised the country will be funded through August when it must repay a €3.2bn bond, but the details have not been disclosed yet. Without that money, Greece would run out of funds to pay its wage bill for public sector workers, pensions and social benefits.
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7 comments:
Germany is going to discover how residents of richer US States feel when they have to subsidize the poorer ones.
Of course, everyone over here gets a say in how the country is run, if you call what the US Congress has been doing lately running the government.
Thankfully, California can't impose austerity on Louisiana. We are forced to make our own cuts, or raise taxes. Very seldom do people vote to raise their taxes, but it has happened, usually for public safety, education, or roadway construction.
Even assuming the Eurolouts somehow manage to get Spanish and Italian bond yields down to 4 or 5% what has that really accomplished? The economies of both nations are still shrinking so even a low interest rate is impossible to pay if your income gets smaller every year.
Seems simple enough
Either our bankers feel the pinch or we have pain or Spain
Personally I do not care for either; because the poor old bloody infantry ( you and me - the tax payer ) will end up with the butchers bill anyway
On balance; as austerity only ever applies to the poor I think I would enjoy seeing the bankers and their bonuses suffer than the poor led Spaniards
Everything these clowns do is geared to preventing imminent collapse, while nothing is done to solve the root problem. How can anything be done when discussion of the real issue is verboten?
Immediate disaster averted, bond yields flattened and Europe still goes to hell in a hand basket simply because the euro vanity project continues to fuel divergence of EZ economies.
If I were a Martian watching this pantomime, I would LMFAO.
There is only one long term solution to this problem, which applies to all of the states in Europe, to the USA and to most other liberal mixed economies and that is :
Reduce the size of the state to a size that can be supported by that country's private sector.
Support of a state, say Spain, by a super state, the EU or the Eurozone, does absolutely nothing other than magnify the problem and maintain it into the future..
You cannot solve a debt crisis by borrowing and lending.
Former ECB governor Athanasios Orphanides said Mr Draghi had boxed himself into a corner. “Expectations are now so high, the ECB will have to announce something,” he said.
Bundesbank chief Jens Weidmann shows no sign of relenting, warning on Wednesday that the ECB must not “overstep its mandate” or stray into fiscal rescues. He issued a blunt reminder that the German central bank is master of the euro project, and not “just one” bank among others. “We are the biggest and most important central bank in the euro system,” he told the Bundesbank journal.
While the Bundesbank does not command an ECB majority – and has been outvoted in the past – Mr Draghi must move with extreme care. Two German members of the ECB have already resigned in protest over bond purchases, seen as debt pooling by the back door. EU officials fear that Mr Weidmann may leave as well if pushed too far, risking a political storm in Germany.
European politicians and central bankers were at odds on Wednesday on the eve of a crucial meeting of eurozone policymakers that has encouraged speculation about "unlimited firepower" for bailout funds to resolve the crisis.
While Mario Monti, the Italian prime minister, spoke hopefully of the eurozone's bailout fund being granted a banking licence and access to endless funding from the European Central Bank, Jens Weidmann, head of Germany's powerful Bundesbank, strongly opposed radical action.
The 23-strong governing council of the ECB will meet on Thursday in Frankfurt for the first time since the ECB chief, Mario Draghi, declared a no-holds-barred fight to save the euro last week in London.
Draghi's pledge to "do whatever it takes" to save the currency and the confidence he voiced that "it will be enough" triggered a euro rally over the past week and curbed bond market pressure on Spain and Italy.
Since then European leaders have lined up to make similar pledges using virtually identical language. Chancellor Angela Merkel of Germany, President François Hollande of France, Monti, and Jean-Claude Juncker of Luxembourg, the president of the eurogroup, have all parroted Draghi, encouraging belief in the markets that the ECB is about to revive a dormant policy of intervening to buy up the bonds of distressed sovereigns, cut interest rates again from an all-time low of 0.75%, or support a more activist role for the European Stability Mechanism, the main eurozone bailout fund.
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