Tag Archives: Austerity

Basta ‘La Casta’: No End in Sight to Italy’s Economic Decline

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“Italy, despite being the third-largest economy in the euro zone after Germany and France, finds itself in dire straits, having been in decline for years. Its GDP has dropped by 7 percent since 2007. But economic growth only tells part of the story. More than half a million industrial jobs have been lost since 2007, and 15 percent of the country’s industrial capacity is gone, says Luca Paolazzi, head of research for Confindustria, Italy’s leading industry association. Paolazzi, Italy is experiencing an ‘unprecedented process of deindustrialization.’  According to Confindustria, the Italian economy faces a tax burden that is 20 percent higher than in Germany.”

http://www.spiegel.de/international/europe/economic-crisis-in-italy-continues-to-worsen-a-912716.html

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Spanish Pension Raids Spell Bad News for Bond Sales

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“Spain’s Treasury may find one of its best customers less eager to buy its bonds as budget woes lead Prime Minister Mariano Rajoy to raid a government piggy-bank for a second year. Created in 2000 to guarantee pension payments in times of hardship, the 59.3 billion-euro ($78 billion) Fondo de Reserva was tapped for the first time in December for 7 billion euros to fund Christmas bonuses and a monthly increase for retirees. Further withdrawals will have taken an additional 4.5 billion euros by the end of this month, helping to pay for pensioners’ summer bonuses and tax refunds.”

http://www.bloomberg.com/news/2013-07-23/spanish-pension-raids-spell-bad-news-for-bond-sales-euro-credit.html

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One-Third Of Europe’s Unemployed Are Spanish

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“Spain has been in recession for seven quarters in a row and survey indicators suggest it will extend to eight. House prices continue to collapse. Government revenue to GDP is among the worst in the union. But unemployment is where Spain has its peers beat – at 6.2 million unemployed, Spain accounts for almost one-third of the entire unemployed population of Europe. With expectations that the unemployment rate will break above 28% next year and a government embroiled in scandal, Rajoy’s planned address to discuss the politicial and economic situation to his nation in August may just be the catalyst for the social unrest that has laid relatively dormant for so long.“

http://www.zerohedge.com/news/2013-07-23/one-third-european-unemployed-are-spanish

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Europe Continues to Circle the Drain

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“Where is the austerity? The cuts Keynesians are complaining about are mere reductions in increase. ‘Despite austerity rhetoric,’ wrote Frank Karsten, ‘government debts keep rising in most democratic countries. ‘Austerity’ is a code word for ‘spending less than we had wanted, but more than in the past.’ In the end, they wind up raising taxes, rather than lowering expenditures to cut deficits.’ As we reported last week, central banks around the world continue to cut their euro holdings for the third straight year. The Old World’s scrip now accounts for only 23.3% of foreign reserve holdings. If central banks are wary of euros… you should be as well.”

http://dailyreckoning.com/europe-continues-to-circle-the-drain/

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Greece May Need Billions More in Emergency EU Aid

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“The Greek recovery may be facing yet another hurdle. According to German daily Süddeutsche Zeitung, the beleaguered country needs another massive influx of money if it is to avoid insolvency. The paper cites an unnamed official at the European Commission as saying that the “financial gap” could be as large as €10 billion.  The news comes at a difficult time for Greece and its relations with Germany. German Finance Minister Wolfgang Schäuble is highly unpopular in Greece for his consistent insistence on austerity. And with German elections looming in September, it seems unlikely that additional aid money for Athens will be forthcoming anytime soon.”

http://www.spiegel.de/international/europe/greece-may-need-billions-more-in-emergency-eu-aid-a-911570.html

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Going, Going, Gone: Crisis-Plagued Madrid Sells Out City Assets

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“Mayor Ana Botella would like to bring the Summer Olympics to Madrid in 2020, following the city’s third attempt to capture the games. Her predecessors have already invested more than €6 billion in the effort, and she needs at least another €2.5 billion. That might explain why, in recent months, Botella has begun to sell off public buildings and properties — even if she hasn’t managed to raise very much money so far. A Chinese bank snatched up a magnificent building near the Prado Museum at a price discount of almost a third.  The fire sale also included 26 works by Spain’s best-known contemporary artists, which were part of the city hall’s inventory.”

http://www.spiegel.de/international/business/madrid-takes-dramatic-steps-to-curb-red-ink-in-crisis-a-911438.html

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Beware the man on the white horse…

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Beware the man on the white horse…

“As far back as ancient times, whenever civilizations fell into great crisis, people in desperation have almost invariably turned to a single individual who promised them better times.  Of course, history is full of examples of men who did not give up power willingly once the crisis passed. The ancient historian Herodotus lists as many as fifty ‘tyrants’ in his writings, a word that has its origins in ancient Greek despotic rulers. For thousands of years, ambitious men have always taken advantage of crisis, social turmoil, and economic downturns to solidify their positions and take control… often creating even more destruction in their wake.”

http://www.sovereignman.com/trends/beware-the-man-on-the-white-horse-12286/

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‘No Longer Necessary’: Hungary Wants to Throw Out IMF

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“A long-running dispute between Hungary and the International Monetary Fund escalated on Monday when the head of the country’s central bank called on the IMF to close its office in Budapest, saying it was no longer needed.  On Monday, central bank chief Matolcsy said Hungary would repay the 2008 loan in full by the end of this year.  He said the government had succeeded in pushing its budget deficit below the EU ceiling of 3 percent of GDP. Matolcsy is the architect of Orbán’s unorthodox economic policy which is based on imposing heavy special taxes on large companies. He became central bank governor four months ago.”

http://www.spiegel.de/international/europe/hungary-calls-on-imf-to-close-its-budapest-office-a-911250.html

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Nearly 2,500 British bankers paid over €1m, says EU regulator

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“In 2011, 2,436 UK-based bankers earned in excess of €1m, down from 2,525 the previous year, according to a study by the European Banking Authority. The most senior bankers working in Britain took home on average €1.44m in 2011, down from €2.3m in 2010, highlighting the impact of the downturn in the financial services industry.In total, the country’s highest paid financiers shared a salary and bonus pool in 2011 worth €3.51bn, down from €5.8bn in 2010.However, based on average pay levels, bankers in Spain earned the most, with earnings of €2.26m (£1.95m) in 2010 and €2.44m in 2011. The number of individuals paid more than €1m in Spain was 125.”

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10180313/Nearly-2500-British-bankers-paid-over-1m-says-EU-regulator.html

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Unemployment crisis in Italy hits immigrants the worst

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“Immigrants are being hit harder than Italians by the country’s unemployment crisis, a new report showed Monday, saying the figures were ‘extremely worrying’ and could lead to ‘major social destabilisation’. The report said the number of unemployed foreigners in the country was currently 385,000 — up from 220,000 at the beginning of the economic crisis in 2008. The report also outlined the importance of immigrants in Italian society and said those who did work were often stuck in low-skill and low-pay jobs. Without migrants, Italian demographic growth would be zero and the population would be ageing at a faster rate, according to the report..”

http://www.rawstory.com/rs/2013/07/15/study-unemployment-crisis-in-italy-hits-immigrants-the-worst/

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