The Brussels top brass insist that we've entered a quiet patch. Yesterday, EC president Jose Manuel Barroso called for an end to "constant drama" over the euru. We'll see what we can do....Yes, it's a quiet patch. But it ain't going to last long. Greece has an awful lot of activities it's supposed to complete by end of march 2012. Now, call me cynical, but I don't think ministers minds are going to be on ticking off the action items for the Troika, with elections in late april / early may, and most of the electorate up for grabs.,,,,So come early april, the loud grumbling from Troika and various EZ finance ministers will resume.....A bit more on Evangelos Venizelos's resignation, which broke in the last few minutes. The finance minister made clear that he would resign by Monday, Helena Smith confirms. And here's a quote from the Pasok leader in waiting: I cannot continue to have a double role. As soon as I assume duties as the leader of the biggest party in parliament, I must dedicate myself to those duties. Helena adds that a poll in the satirical weekly To Pontiki, to be published tomorrow, shows that nine parties are expected to win seats in the next parliament -- a multi-party presence not seen since the 1950's in Greece. Speaking of double roles, I'm reminded that Mario Monti rebuffed the idea that he might chair the eurogroup (made up of eurozone finance ministers). Monti is a contender because he is Italy's economy minister, as well as being prime minister. The former European Commissioner has quite the CV, as financial reporter Fabrizio Goria of Linkiesta pointed out on Twitter last night.
Angela Merkel's constant mantra in recent months has been austerity, austerity, austerity. But apparently the German chancellor hasn't been quite as strict when it comes to her own country's budget. SPIEGEL reports this week that the German government didn't reach even half of its planned savings in the federal budget. Only 42 percent of the spending cuts named by Merkel's coalition government, comprised of the conservative Christian Democrats and the business-friendly Free Democratic Party, were actually implemented. Calculations made by the influential Cologne Institute for Economic Research indicate that only €4.7 billion ($6.16 billion) of the €11.2 billion in austerity measures stipulated by the savings package actually took shape in 2011. The government is also falling behind on its targets for this year. Of the originally planned €19.1 billion in savings, less than half has been implemented. For the coming year, the concrete measures that have been agreed on so far cover just one-third of the announced amount of savings. Merkel's cabinet is hoping to agree to the basic foundations of the 2013 federal budget in March.
6 comments:
If Fitch strip us of our AAA rating, then given the credit rating agencies are discredited in most people eyes what will the reaction be:
1. Market panic and a rise in the cost of borrowing.
2. A collective "meh" sound as the world shrugs its shoulders ( as happened to the USA)
If as I suspect the second option happens will George Osborne (AKA Daves slightly thick mate) apologise for unecessarily trashing our economy, our youth and our social cohesion.
"Undemocratic and all-too-unaccountable body tells undemocratic and all-too-unaccountable body to watch their backs or things might go tits up on the balance sheet".
It has fuck all to do with real life.
Or rather it should have fuck all to do with real life, except the consequences are all too damning when it comes to that trickle-down effect
"Undemocratic and all-too-unaccountable body tells undemocratic and all-too-unaccountable body to watch their backs or things might go tits up on the balance sheet".
It has fuck all to do with real life.
Or rather it should have fuck all to do with real life, except the consequences are all too damning when it comes to that trickle-down effect
Still talking crap, eh?
You tried the Greece gambit during the election - you fooled the electorate once, you're not going to fool them again. Osborne has volunteered the UK as a sacrifice to the ratings agencies, at least the Greeks had the courage to put up a fight rather than accepting the betrayal by their political class as a fait accompli.
I am beginning to think that this type of bullshit from the likes of Fitch has been engineered to give the coalition some justification for it's harsh austerity plans and further cuts in spending.
Why should we be worried about our credit rating if you have a Government that won't borrow to get the country out of the shit ? after all you only pay interest on money borrowed, if we are not borrowing then it should not matter if our rating falls to triple Z. So enough of the bullshit from Fitch &co, start running the country properly and stop trying to justify your miserly ways and allow some money for the country to flow. or you can ofcourse make it that the people are paying so much to reduce debts that they can only spend their remainder to survive! Now thats not a good deficit reduction plan .
I'm also going to post Prof Bill Mitchell's blog on this subject again.
http://bilbo.economicoutlook.net/blog/?p=7838
Start about halfway through it if you want a quick answer.
Essentially clowns like the rating agencies are irrelevant to a sovereign government producing its own currency. The people who actually buy government bonds know this, which is why, say, the US or the UK has no problem selling the things at low interest rates.
Also ask yourself: where does sterling come from in the first place?
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