Three months that will test the Eurozone | 223 comments (223 topical, editorial, 0 hidden)

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Eurointelligence Daily Briefing: German rebellion against second loan tranche for Greece

Bundestag votes in favour of Portugal package, but more and more MPs come out in opposition to a second loan package for Greece; Schäuble says Germany's support was a question of fate for Europe; Der Spiegel says Europe has become the fault line of centre-right politics in Germany; Bild Zeitung has another outrageous article about overpaid and lazy Greeks, and why the crisis will last forever; Antonio Borges and Jean Claude Juncker call for more Greek privatisations; Holger Steltzner bemoans that the ECB is becoming more French, and less German; the IMF warns that the crisis may yet spread to core Europe; El Pais wonders why the IMF still considers Spain to be among the Euro Area 4 peripheral countries; economists and investors overwhelmingly expect a Greek restructuring, according to a Reuters poll; Barclays Capital calculates that Greece needs a 67% haircut; True Finns stay out of government in protest over the decision to support a Portuguese aid package; there were more violent protests in Athens after the serious injury of a protester earlier this week; John Walters argues why Ireland is the victim in this crisis; Christine Lagarde is to revise the 2011 growth forecast upwards following a better than expected first quarter;there is much speculation, meanwhile, about the future of Lorenzo Bini-Smaghi after Mario Draghi's accession to the ECB presidency.

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Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri May 13th, 2011 at 04:52:51 AM EST

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El Pais wonders why the IMF still considers Spain to be among the Euro Area 4 peripheral countries

ElPais.com in English: IMF puts Spain in same boat as bailout recipients

Must be because Spain is enacting the same economy-killingh austerity policies, only without (or, should I say before) the "bailout".

Fund issues warning over potential "lost generation"
...
In a report on the economic recovery in Europe, the IMF predicts Spain will continue to lag behind the rest of the continent, maintaining its growth forecasts for the country of 0.8 percent this year and 1.6 percent in 2012, compared with 1.6 and 1.8 percent respectively for the euro zone.
...
The IMF expects the ongoing drop in house prices after the property-bubble burst to depress consumer spending, while investment is also expected to be dampened by the weak outlook for the economy. "Spain continues to experience a significant housing-market contraction that will hinder consumption in the near term," the report said.
...
The report notes a "strengthening of national reforms" that allowed Spain to "decouple from other periphery countries in early 2011," but questioned whether the government would meet its deficit reduction targets for this year and the next. Specifically, the IMF sees the shortfall in Spain's finances narrowing from 9.2 percent of GDP in 2010 to 6.2 percent this year and 5.6 percent next year, compared with the administration's goal of a deficit of 6 percent in 2011 and 4.4 percent in 2012.

Economics is politics by other means

by Migeru (migeru at eurotrib dot com) on Fri May 13th, 2011 at 07:56:29 AM EST
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Three months that will test the Eurozone | 223 comments (223 topical, 0 editorial, 0 hidden)