Tensions within the zone are mounting as we enter a week in which Italy, Belgium, Spain and France plan to tap the markets for some €17 billion ($22 billion) in new loans and, says Goldman Sachs, the European economy slides into recession. Bankrupt Greece; junk-rated Portugal pleading with Angola for inbound investment; jobless Spain, facing some interest rates that have doubled in the past month; and recovering Ireland have already fallen to the bond vigilantes. Growth-free Italy is fighting a rearguard action, facing unsustainable interest rates despite the stellar reputation of its newly appointed technocrat prime minister, Mario Monti; Belgian debt, now equal to its GDP, has been downgraded, in part because of the inability of this seat of the EU to form a new government. France, consumer confidence dropping, is likely next. Some German IOUs were unsold, and prices of bunds are slipping. No euro-zone country and no euro-zone company can any longer escape the consequences of the structural flaw in the euro-zone architecture. German Chancellor Angela Merkel opposes measures that might stem the tide that is about to engulf the euro. Nor can countries outside the euro zone. Great Britain, with high deficits, mounting debt, and a deficit-reduction plan that just might not work, retains its triple-A rating because it has its own currency and the rating companies increasingly consider governance when deciding whether to downgrade.Britain is considered governable, but that might change after Wednesday's strike of public service workers shuts down the country. The failure of the super committee to find some trivial deficit reductions means America might also slip into the ungovernable category. And the Federal Reserve Board is imposing new stress tests to determine whether leading banks can withstand a wave of sovereign- debt and bank defaults in Europe. One thing is certain: The euro cannot survive without a major change in the governance structure of the euro zone. The first prescription for what ails the zone was "austerity", but that has produced recessions and government oustings. Then came the European Financial Stability Facility, but it turns out to be too puny to halt the bond vigilantes' rampage through the euro zone, and anyhow rests in part on France's waning ability to join Germany as a guarantor by retaining its triple-A credit rating. The European Central Bank, operating within the legal limits imposed on it by thetreaties that govern the European Union, is providing some liquidity to the banks and a bit of relief on the interest-rate front for sovereign borrowers, but it cannot do much to prevent the insolvent from being forced to default. Ms. Merkel, Germany's latest Iron Chancellor, has set her face against any of the measures that might stem the tide that is about to engulf the euro. She is against allowing the ECB to become the lender of last resort, aka printer of money. She refuses to share her balance sheet with stressed countries by allowing the issuance of euro-bonds, until they reform, even though such reforms cannot be implemented in time to head off sovereign defaults that would take down many under-capitalized European banks, now desperately juggling their books to inflate their capital ratios.
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The Central Statistics Office (CSO) said that Irish gross domestic product (GDP) shrank 0.2pc in the fourth quarter after a contraction of 1.1pc in the third quarter, putting the country back into a technical recession.
Worse, the Irish gross national product (GNP) plunged 2.2pc in the fourth quarter after a 1.9pc decline in the previous three months. GNP is regarded by the Irish government as a more accurate barometer of the country's economic performance as it strips out substantial profits earned by multi-national companies in Ireland that are then taken out of the country. The CSO said the Irish economy grew by 0.7pc for the whole of 2011. But it shrank by 2.2pc in GNP terms.
Ireland, which received an €85bn (£71bn) international bailout in 2010, has won plaudits from eurozone members for its implementation of tough spending cuts and austerity measures.
European leaders, including Angela Merkel, the German Chancellor, have held up the country as a poster child for other "sinner states" to copy. At the World Economic Forum in Davos in January, Jyrki Tapani Katainen, the prime minister of Finland, said: "The Irish model [of recovery] is the one we all need. I don't see that we have any choice… there is no short cut to heaven."
By cutting public sector jobs and pay and increasing the state pension age, Ireland turned 10 years of budget deficits into a surplus last year.
The Central Statistics Office (CSO) said that Irish gross domestic product (GDP) shrank 0.2pc in the fourth quarter after a contraction of 1.1pc in the third quarter, putting the country back into a technical recession.
Worse, the Irish gross national product (GNP) plunged 2.2pc in the fourth quarter after a 1.9pc decline in the previous three months. GNP is regarded by the Irish government as a more accurate barometer of the country's economic performance as it strips out substantial profits earned by multi-national companies in Ireland that are then taken out of the country. The CSO said the Irish economy grew by 0.7pc for the whole of 2011. But it shrank by 2.2pc in GNP terms.
Ireland, which received an €85bn (£71bn) international bailout in 2010, has won plaudits from eurozone members for its implementation of tough spending cuts and austerity measures.
European leaders, including Angela Merkel, the German Chancellor, have held up the country as a poster child for other "sinner states" to copy. At the World Economic Forum in Davos in January, Jyrki Tapani Katainen, the prime minister of Finland, said: "The Irish model [of recovery] is the one we all need. I don't see that we have any choice… there is no short cut to heaven."
By cutting public sector jobs and pay and increasing the state pension age, Ireland turned 10 years of budget deficits into a surplus last year.
Europe has become the black financial hole of focus yet the US is equally culpable and has merely temporarily moved out of the media limelight. Around the western world debt ceilings have been lifted to stratospheric proportions and are now moving into escape velocity where no rational form of gravity/austerity can possibly contain them.
The European debt dynamics will continue to suck everything into it (nowhere) as all wealth disappears. Rather than face up to these realities and address these problems, we find western politicians and their lackeys in the mainstream media acting as morticians merely trowelling layer upon layer of make-up on the rapidly decaying corpse of western crony capitalism / financialism/ banksterism - whatever you want to call it.
Debt, fraud and deception are virus like worms consuming the life blood of a system hijacked by sociopathic PC politicians, bankers, market movers and shakers and vampire corporations. The wealth of the masses is doomed to be sacrificed at the alter of their insatiable greed and egos.
The only problem being with their grand plans - that the assets they propose to seize are fast becoming nothing in themselves but IOUs and debt - rendering the whole pursuit and conspiracy as entirely fruitless. Scary like the film 'Alien' - yes. Sadly in this movie you don't get to the cheap thrill of seeing Sigourney Weaver strip to her cute white panties.
Post-post-modern irony is still alive and kicking it seems and no doubt post-post-post modern irony will prove even funnier still.
Can we ever forget Osbornes sychophantic twaddle over Ireland when in opposition in 2006.
In 2006 Osborne wrote in The Times “Ireland stands as a shining example
of the art of the possible in long-term economic policymaking.” He also
advocated Irelands de-regulation of banking institutions and cutting of
corporate tax. These two points may have helped launch the Irish Boom,
but they were also almost solely responsible for the crash. He carried
on with “They have much to teach us, if only we are willing to learn.”
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jonlivesey
47 minutes ago
"Can we ever forget Osbornes sychophantic twaddle over Ireland when in opposition in 2006."
I'm not sure. Did you personally point out that he was wrong at the time?
And what were other people saying about Ireland in 2006? you certainly couldn't read the DT without seeing comments from readers gloating about how well Ireland was doing. Same story for the Guardian. Same story for the EU, which never stopped praising Ireland.
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