The five countries that implemented Merkel's anti-crisis recipes and cut
spending massively in areas such as health and education, have been in or close
to recession
since 2008. Unemployment
tops 27pc n Spain and Greece. Their leaders, however, disagree with the public
view. Confident that Merkel will tone down her budget cutting mantra and accept
more burden-sharing within the euro zone, they are positioning themselves as
close allies of Europe's main paymaster. "I think we will see a different Mrs.
Merkel after the elections," said Cypriot President Nicos Anastasiades, echoing
a view shared by most of his fellow southern European leaders. In Greece, where
crunch time for plugging a budget gap with a third bailout of the country starts
at the end of September, hopes are high that debt issues can finally be sorted
out after the German election, maybe through a new debt write-off. In Italy and
Portugal, policymakers believe Merkel will accept a shift from the emphasis on
unpopular austerity to a more balanced model for managing the economic crisis if
she wins. In Spain, where banks were rescued with 42 billion euros of European
money, expectations are that the chancellor will lean towards common euro zone
debt issuance and accept a full-fledged banking union, unlocking credit in the
recession-hit nation. While market turmoil has eased in the euro zone and last
year's massive capital outflows from southern Europe to safe-haven Germany have
started to reverse, the underlying problems are far from resolved. The
correction pace of imbalances in the European
Central Bank's Target 2 cross-border payments system, a key indicator of
financial stress within the single currency zone used by ECB President Mario Draghi to
monitor monetary policy, remains slow. Continued German support will be key to
keep the fever down. Senior government sources in southern European countries
insist Merkel has signaled flexibility on these issues in recent private talks.
But she has given no public indication of such a U-turn and many in Berlin
caution it is highly unlikely to happen, warning against wishful thinking.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, August 9, 2013
The five countries that implemented Merkel's anti-crisis recipes and cut
spending massively in areas such as health and education, have been in or close
to recession
since 2008. Unemployment
tops 27pc n Spain and Greece. Their leaders, however, disagree with the public
view. Confident that Merkel will tone down her budget cutting mantra and accept
more burden-sharing within the euro zone, they are positioning themselves as
close allies of Europe's main paymaster. "I think we will see a different Mrs.
Merkel after the elections," said Cypriot President Nicos Anastasiades, echoing
a view shared by most of his fellow southern European leaders. In Greece, where
crunch time for plugging a budget gap with a third bailout of the country starts
at the end of September, hopes are high that debt issues can finally be sorted
out after the German election, maybe through a new debt write-off. In Italy and
Portugal, policymakers believe Merkel will accept a shift from the emphasis on
unpopular austerity to a more balanced model for managing the economic crisis if
she wins. In Spain, where banks were rescued with 42 billion euros of European
money, expectations are that the chancellor will lean towards common euro zone
debt issuance and accept a full-fledged banking union, unlocking credit in the
recession-hit nation. While market turmoil has eased in the euro zone and last
year's massive capital outflows from southern Europe to safe-haven Germany have
started to reverse, the underlying problems are far from resolved. The
correction pace of imbalances in the European
Central Bank's Target 2 cross-border payments system, a key indicator of
financial stress within the single currency zone used by ECB President Mario Draghi to
monitor monetary policy, remains slow. Continued German support will be key to
keep the fever down. Senior government sources in southern European countries
insist Merkel has signaled flexibility on these issues in recent private talks.
But she has given no public indication of such a U-turn and many in Berlin
caution it is highly unlikely to happen, warning against wishful thinking.
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3 comments:
the drop in imports doesn't say much about domestic demand. Instead it says a lot about Germany's order book.
Germany's imports are mainly raw materials (copper etc) they need to make their products for export. A crash in imports of these raw materials signals a drop in the order book - and we should see a crash in exports in about 6 months time reflecting the same trend.
Everything has a sequence and hence a lag - you see orders drop first, therefore the manufacturer doesn't need to import raw materials, he doesn't make the stuff and it doesn't get exported - exports now reflect the order book of six months ago.
All I can say is that most sensible Brits, if not most sensible people irrespective of passport-issuing authority, would welcome any news from Germany that the country is faring well. Why wouldn't we? Germany is a considerable market for Brit goods and services and vice versa the UK for Germany.
That there are some people, this side of the channel, who have deep distrust, dislike, of the euro, etc. that would be certainly true. But such people have their wires crossed and are having serious difficulties telling things apart. Some are even as sad as thinking that WWII is still ongoing.
I would add though, that such Brits are being profoundly non-Brits for if we're something that's to be, let's say, mercantile, and we like to sit down and do business to mutual benefits with any one. And we have been doing that for centuries and it has made us who we are.
Meanwhile, please ignore such confused Bris as they continue to stroke bulldogs and other such nonsense which don't turn in a penny for Britain!
The rate of interest available for inter-bank lending and short selling in the City will be around the minimum lending rate; the commercially available credit will still be double digit. The masters of the universe get virtually free money; Joe Bloggs on the street still has to pay for it.
The real problem is going to be the mortgage bubble. And the securities and derivatives attached to that market. Nobody ever learns.
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