Tag Archives: Austerity

BIS blames European banks for eternal euro crisis

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“Europe’s creditor powers bear as much blame as debtors for the eurozone’s eternal crisis and are blocking recovery by failing to play a full part in righting the ship, according to the Bank for International Settlements.  The BIS said European banks played a huge role in stoking the pre-Lehman credit bubble. They rotated $1.25 trillion into US debt alone between 2003 and 2007, greater than the combined purchases of Asia and OPEC. It said banks funnelled money into southern Europe regardless of risk in ‘expectations of a bail-out’ if any country got into trouble.”

http://www.telegraph.co.uk/finance/financialcrisis/10221869/BIS-blames-Europes-creditors-for-eternal-euro-crisis.html

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IMF sees no end to French jobless crisis this decade

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“The IMF said the jobless rate will rise yet further to 11.6pc in 2014 and will not drop below 10.6pc within Mr Hollande’s five-year term. If this grim scenario unfolds, it will be a political hammer blow for Mr Hollande. He asked the nation to judge him on his record in ‘bending the unemployment curve’. The Fund said efforts to bring down the budget deficit should focus on spending cuts rather than fresh taxes, ‘which are among the highest by international standards and have a negative effect on investment and job creation’. Two-thirds of Mr Hollande’s fiscal squeeze has come from taxes, to the fury of the business lobby Medef.”

http://www.telegraph.co.uk/finance/financialcrisis/10224099/IMF-sees-no-end-to-French-jobless-crisis-this-decade.html

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Greece should defy the gunboat creditors

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“Nothing whatsoever has been resolved, either in Greece, or in Portugal, or in Cyprus, or in Spain, or in Italy. Nor will there be under the current contractionary policy structure. There is no Deus Ex Machina. These nations will remain trapped in slump and mass unemployment until they take matters into their own hands, form a debtors cartel, confront the head-on gunboat creditors from a position of strength, and dictate the outcome. But first they have to defenestrate out their own cowed elites.”

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100025270/greece-should-defy-the-gunboat-creditors/

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Doubt Grows in Reforms of Rajoy Government in Spain

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“The reorganization of Spain’s financial sector is seen as the most important part of the reforms introduced by conservative Prime Minister Mariano Rajoy to overcome his country’s economic and debt crises. But whether the plan will succeed remains uncertain, as real estate prices continue to slide amid continued concerns over the country’s financial institutions. A corruption scandal surrounding Luis Bárcenas, the former treasurer of the governing People’s Party party, is a reminder to Spaniards of how a group of political and economic elites has taken the country to the brink of ruin.”

http://www.spiegel.de/international/europe/doubt-grows-in-reforms-of-rajoy-government-in-spain-a-913866.html

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Spain Weighs Home Demolitions as Wrecking Crews on Alert

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“Demolition man Daniel Anka had a staff of 450 in Spain preparing for new developments before the property crash. With about a 10th of that workforce left, he’s now waiting for a call from the country’s bad bank so his trimmed-down crew can start knocking down half-built homes that aren’t worth completing. Anka may not have long to wait as Sareb, the unit holding soured real estate assets from Spain’s nationalized banks, orders work to stop on about 160 of the 650 partially-completed building projects on its books and decides which ones are worth completing.”

http://www.bloomberg.com/news/2013-07-30/spain-weighs-home-demolitions-as-wrecking-crews-on-alert.html

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Swedish warning

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“The hard data is in. Sweden’s GDP fell by 0.1pc in the second quarter, astonishing everybody who relies on soft PMI confidence surveys. Year-on-year growth has been just 0.6pc, half the level expected, and Sweden is supposed to be a star performer in Europe. There are fundamental economic and mathematical reasons why Europe remains in dire trouble. Nominal GDP is contracting in a string of countries, causing debt dynamics to explode. As for Sweden, it had a housing boom and household debt bubble like the rest of us. The reality is that the Scandinavian pillar is not as strong as people think. There are no strong pillars in Europe.”

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100025264/swedish-warning/

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IMF finds $11 billion ‘black hole’ in Greece’s finances

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“The International Monetary Fund warned the eurozone yesterday that it may be forced to write off a chunk of Greece’s debt after identifying an $11bn black hole in the finances of the recession-stricken country. In its regular update on the programme of financial austerity and structural change agreed to by Athens in return for financial help, the Washington-based IMF said weak growth and a sluggish pace of reform had opened up a funding gap in both 2014 and 2015.”

http://www.rawstory.com/rs/2013/07/31/imf-finds-11-billion-black-hole-in-greeces-finances/

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Europe’s ‘recovery’ is a conjuring trick

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“Stock market indices in Portugal, France and Spain are up by about 30 per cent. That’s pretty impressive for economies running on empty but is completely outshone by Greece, where the main index is now 64 per cent higher than in June 2012. There’s a temptation to look at the direction of travel and conclude that, even for the eurozone’s weaklings, the point of maximum danger is history. This is what EU leaders and the European Central Bank would like us to believe. At the core of this ‘recovery’ is a bluff that has yet to be called. In August last year, the European Central Bank’s president, Mario Draghi, promised to do ‘whatever it takes’ to defend the euro.”

http://www.telegraph.co.uk/finance/10207789/Europes-recovery-is-a-conjuring-trick.html

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IMF approves 1.7 bn euro loan payout to Greece

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“The International Monetary Fund released 1.72 billion euros ($2.29 billion) in aid for Greece on Monday after completing a review of the country’s performance under the international rescue program. The latest disbursement means that Greece has received a total of roughly 8.24 billion euros ($10.94 billion) from the IMF under the bailout coordinated with the European Union and the European Central Bank in March 2012. Greece was first bailed out for 110 billion euros in 2010 but when that failed, got a second rescue worth 130 billion euros plus a private sector debt write-off totaling more than 100 billion euros.”

http://www.hindustantimes.com/business-news/WorldEconomy/IMF-approves-1-7-bn-euro-loan-payout-to-Greece/Article1-1100475.aspx

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Ageing population pushes welfare bill to crisis point

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“In a report released tonight, the Organisation for Economic Cooperation and Development said that the proportion of GDP spent on jobseekers’ allowance, pensions and other ‘public social spending’ stood at 23.8 per cent — the same as it was in 2010. The Paris-based think tank warned that unless action was taken to cut the cost to the state of Britain’s rapidly rising elderly population, the health and pensions systems could collapse. Ddespite broadly positive signs, economic activity is still well below the level enjoyed before the financial crisis and Britain faces years of austerity and uncertainty.”

http://www.telegraph.co.uk/news/politics/10203402/Ageing-population-pushes-welfare-bill-to-crisis-point.html

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