Welcome to the new version of European Tribune. It's just a new layout, so everything should work as before - please report bugs here.
Display:
Really hard to see how the eurozone gets out of this without a major crisis.

Barring a really scary definition of "major crisis," I'd say you should have put that in past tense.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 4th, 2011 at 12:04:37 PM EST
[ Parent ]
Well I wrote that a few days ago and the crisis I feared appears to be arriving. The one where the markets start betting on Italy and Spain leaving the Euro.
by Metatone (metatone [a|t] gmail (dot) com) on Thu Aug 4th, 2011 at 04:32:39 PM EST
[ Parent ]
For me this became a major constitutional crisis when the first EU member state got ECB'ed. That they come for Spain after they came for Greece and Portugal and nobody spoke up very loudly should come as a surprise to absolutely nobody.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Aug 4th, 2011 at 06:38:00 PM EST
[ Parent ]
last March:
The PES tried to put together a coordinated position on the crisis, and who missed the meeting? Sócrates and Zapatero.

Luis de Sousa was quite angry in his previous diary: Sócrates and Zapatero leave PES for EPP

We finally seem to have some coordinated effort from the PES to tackle the crisis. The socialist family has gathered in Greece to present an alternative path to the austerity-rules-all course imposed by the conservatives. They lure to have a thorough answer to the new economic governance rules proposed by Merkel and Sarkozy, now being refined to be voted by the Council later this month. Shy to some extent, it nevertheless points to the obvious building blocs needed to both deal with the crisis and reinforce the Union. The creation of an European Treasury, the creation of an European tax, even the reference to the needed structural paradigm change to build an Economy for the XXI century, all of it seems to be considered by the PES leaders.

The meeting is even more important for another reason, by displaying this unity the socialists are sending their citizens a clear message, the blind austerity is not being imposed by the Union, but by the conservatives that at the moment rule the Union. Merkel, Sarkozy, von Rampuy, Barroso, are all members of the EPP; the apathetic servitude to American rating agencies, the blind pursue of a stronger than steel €uro, it's their course, not of Europe itself.

Unfortunately, two socialist leaders missed the meeting: Zapatero and Sócrates. They don't seem to be interested in an alternative to the conservatives' policy. They are now themselves conservatives.

Zapatero has been busy reminding everyone that "Spain is not Ireland" just like "Portugal is not Greece". I'm not sure what ZP expects to gain from that. At the time of the Irish bail-out, I criticised Zapatero for joining forces with the EPP (or farther right in the case of the UK) of the other 4 larger EU member states to "reassure the markets" that bondholders wouldn't suffer losses on currently existing debt:
Zapatero, the last best hope of Social Democracy in Europe [sic], joins forces with the Conservative-Neoliberal governments of Germany, France, Britain and Italy in a futile attempt to protect his own bond spreads, only to find a few weeks/months from now that the other 4 larger economies hang him out to dry...
Sure enough, it took only 5 weeks for the markets to attack Spain...

Who Could Have Predicted?



Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Thu Aug 4th, 2011 at 06:42:47 PM EST
[ Parent ]
It wouldn't surprise me if it emerged one day that this is a US strategy aimed at taking the pressure off the $.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Thu Aug 4th, 2011 at 08:39:21 PM EST
[ Parent ]
You're right about the constitutional crisis...

I was thinking merely of the coming collapse of the euro, combined with the collapse of enough banks to create a cash crisis (as in people literally can't get hold of cash, because too many banks and ATMs have closed down...)

That's my fear. I'd agree that in principle the constitutional crisis is more important... but I feel like the crisis I fear will touch us all more directly.

by Metatone (metatone [a|t] gmail (dot) com) on Fri Aug 5th, 2011 at 05:13:26 AM EST
[ Parent ]
The ATMs will not fail. They're all covered by depositor insurance. Those liabilities are not great compared to the total size of the problem, and the catastrophe that would result from failing to print enough money to cover those guarantees is obvious to even the dimmest of dim bulbs in the ECBuBa. The €-zone is not Iceland in this regard.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Fri Aug 5th, 2011 at 04:12:47 PM EST
[ Parent ]
I've given up believing anything is obvious to the dimmest bulbs at the ECBuBa...
by Metatone (metatone [a|t] gmail (dot) com) on Sat Aug 6th, 2011 at 07:04:14 AM EST
[ Parent ]

Display:

Occasional Series