BS no 1. ----The news that the eurozone has avoided recession is politically tricky for the UK government, which has repeatedly blamed Britain's economic woes on the problems over the English Channel.
Just last night, chancellor George Osborne warned that the eurozone crisis was affecting the wider economy, saying in Brussels that:
The euro zone crisis is having a real impact on growth across the European continent, including Britain....The British recovery has been damaged over the last two years not by Britain getting a grip on its public finances but by uncertainty in the euro zone.
So it's somewhat embarrassing to now find that the Eurozone managed to avoid contracting in the last three months, while the UK shrank by 0.2% (although, in the spirit of balance, many business leaders reckon that reading was too negative). Ed Balls, Labour's shadow chancellor, has already argued that today's GDP data shows the UK's double-dip was caused by domestic policy.
BS no. 2 ---- A strong performance by the powerhouse German economy, which grew by 0.5pc, helped haul the 17-members over the line and prevented the eurozone recording a second quarter of contraction in a row, according to the latest figures from Eurostat. In the fourth quarter of 2011, eurozone GDP shrank by 0.3pc.
Howard Archer, economist at Global Insight, said: “While it is welcome news that the eurozone avoided recession, its performance is hardly something to celebrate as GDP was only flat year-on-year in the first quarter of 2012. Furthermore, generally weaker latest data and, particularly, survey evidence suggests that renewed GDP contraction is very much on the menu for the second quarter.”
The debt crisis took its toll on the other core economies. French GDP failed to grow at all in the first three months of the year; Austria and Belgium showed modest growth; the recession in the Netherlands continued as its economy contracted 0.2pc quarter-on-quarter.
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As leaders in Athens accepted the need for a new general election to end a national stalemate, the International Monetary Fund said Europe’s leaders should prepare for the possibility of a Greek departure from the single currency.
Christine Lagarde, head of the IMF, warned she was “technically prepared for anything” and said the utmost effort must be made to ensure any Greek exit was orderly. The effect was likely to be “quite messy” with risks to growth, trade and financial markets. “It is something that would be extremely expensive and would pose great risks but it is part of options that we must technically consider,” she said.
Raising tensions still further, Germany warned Greek voters that the wrong result in next month’s election will force their country out of the single currency.
Greece’s president warned, perhaps most alarmingly, that its banks risk running out of money, posing a “threat to our national existence”.
The escalating turmoil sharpened fears in financial markets, with European shares and the euro itself falling again. On the stock markets, the Eurostoxx 600 fell 0.7 per cent to a year-low; Germany’s Dax dropped 0.8 per cent and Spain’s Ibex was down 1.6 per cent. In London the FTSE100 slid 0.5 per cent. Following this month’s inconclusive election, Greek parties yesterday failed again to agree a new government. A new election, most likely to be held in mid-June, could see more gains for parties that want to reject the austerity measures that are a condition of international efforts to bail out the debt-crippled state.
Another stream of "bash the bankers", "blame the Eurocrats" and various, related mindless tosh, from the commentators.
The people to blame for the Greek Crisis are the "ordinary people" of Greece.
They are the people who have repeatedly voted in financially and fiscally incontinent politicians.
They are the people who, when faced with their moment of truth, descend into a state of total denial and throw childish, pointless tantrums.
The "ordinary people" are the ones who held the Public Sector Ghost jobs, where they drew salaries but never did a days work.
The "ordinary people" are the ones who fiddled their benefits, drove cars that were untaxed, worked in paid jobs but paid no tax and claimed unemployment benefit whilst their employers conveniently forgot to pay their state insurance contributions, state pension contributions and forgot to collect or pay the VAT on their sales.
Their moment of truth is just around the corner but don't feel sorry for them, it has been coming for years
This was so inevitable and predictable.
So why did we have to wave our billions down the river for a lost cause?
Smell a conspiracy by international banking, anyone? Look at who have profited and continue to do so.
Be prepared - get some cash out and have a stash at home, then watch the queues at the banks snaking down the street, panicking to get hold of their money when it all comes tumbling down.
Citizens of Greece you have to face reality. Pensions that start in your 60's not 50's; fair taxes that everyone pays; a common work ethic the same as people in other European countries; state spending that matches income and a end to free money with no more living on credit. Reject the cure, default on the bail-out and leave the Euro. Return to the Drachma and magically the demons of insolvency disappear. Really! With no line of credit, banks will shut, the people will have no ability to trade because there will be no free trading currency and with the unpredicted consequences of a wrecked European trading system where do Greeks think new money is going to come from? Without money how is the man in the street going to bring bread home for his family? Riot, have new elections, grandstand and set yourself free of German hegemony but has anyone really explained to you what the alternative years outside the Euro will bring? Greece is speeding into the abyss and the unknown on a wave of revolt fanned by the flames of populist leaders who have no Plan B instead they simply reject plan A in complete ignorance of the consequences. All the commentary so far is about blaming Greeks for their past sins their is little about what life will be like after ditching life in the international trading system.
Citizens of Greece you have to face reality. Pensions that start in your 60's not 50's; fair taxes that everyone pays; a common work ethic the same as people in other European countries; state spending that matches income and a end to free money with no more living on credit. Reject the cure, default on the bail-out and leave the Euro. Return to the Drachma and magically the demons of insolvency disappear. Really! With no line of credit, banks will shut, the people will have no ability to trade because there will be no free trading currency and with the unpredicted consequences of a wrecked European trading system where do Greeks think new money is going to come from? Without money how is the man in the street going to bring bread home for his family? Riot, have new elections, grandstand and set yourself free of German hegemony but has anyone really explained to you what the alternative years outside the Euro will bring? Greece is speeding into the abyss and the unknown on a wave of revolt fanned by the flames of populist leaders who have no Plan B instead they simply reject plan A in complete ignorance of the consequences. All the commentary so far is about blaming Greeks for their past sins their is little about what life will be like after ditching life in the international trading system.
After moving to Germany from the US, I've seen that "austerity" really means "an excuse to pay the people less and line the pockets of the corporations, governments, and aristocrats even more". German workers have been in austerity since 2000, in fact, forgetting that corrupt collective bargaining and unions that don't even consult us always rule in favor of the corporations who want to pay less and less. German pay is so low that many people, especially doctors, lie about their incomes by adding the value of their benefits package.
The EU is not a state (yet) its actions are not based on law and legal precedent or treaty as real democratic nations are, the EU breaks its own supposed rules and regulations with impunity and simply makes it up as it goes along. The EU lectures others about democratic standards and the rule of law that it does not apply to itself. EU accounts are still not signed off by auditors, corruption is rife and nobody knows how much goes missing each year.
The EU kommissars claim that Greece would have to exit the Euro if it ripped up the suicidal bailout agreement but the truth is its all hot air and bluster because there is no mechanism to force Greek withdrawal from the Euro. Greece could rip up the bailout AND stay in the Euro and there s nothing the EU can do to stop them, indeed the central bank of Greece could simply print all the Euros it wants or needs and again there is nothing the EU can do short of invasion or a full scale economic blockade.
Strip away the bluster and hot air and empty threats emanating from Brussels and all that is left is a desperate desire to keep the truth from emerging that Euro nations do have other options other than the crippling terms of the bailouts. The MSM has not yet asked the awkward questions of the puffed up kommissars and there is a good reason for this, the kommissars have no answers. Like a little dog the EU barks a great deal with no actual bite, it talks the talk like the big I am but underneath it is a gutless wimp, look behind the curtain and you find a desperate little midget.
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