Tag Archives: Eurozone

The Growing Pain in Spain

Posted on July 12, 2012 by Mitch Green | 10 comments

Just when you think that things can get no worse in Spain, they do. Take a look at this chart, courtesy of Credit Suisse via FT’s Alphaville

http://ftalphaville.ft.com/blog/2012/07/11/1080121/just-another-scary-spanish-capital-flight-chart/#comments

Yiagos Alexopoulos at Credit Suisse estimates that Spanish capital outflows are currently running at an annualised rate of 50 per cent of GDP. No question, the bank run is clearly accelerating, and one can easily understand why. The country is turning into a Little House of Economic Horrors. The alleged “rescue” of Madrid’s banks is a non-starter. 100 billion euros won’t begin to cover the scale of the problem on any honest accounting or “stress test” (and that’s before we get to the next phase of announced austerity measures). Continue reading →

10 Comments

Posted in Marshall Auerback

Tagged austerity, euro, Eurozone, spain, unemployment

Greece and the Rest of the Eurozone Remain on the Road to Hell

Posted on June 18, 2012 by Mitch Green | 12 comments

By Marshall Auerback

So for the short term, it appears we won’t have a “Grexit”, which has led many commentators to suggest (laughably) that a crisis has been averted. Typical of this sentiment is a headline in Bloomberg today “Greece avoids chaos; Big Hurdles Loom”. To paraphrase Pete Townsend, meet the new chaos, same as the old chaos. It is worth pondering how acceptance of the Troika’s program (even if cosmetic adjustments are made) will help hospitals get access to essential medical supplies (see here), whilst the government persists in enforcing a program which is killing its private sector by cutting spending and not paying legitimate bills, and an unemployment rate creeps towards 25 per cent and 50 per cent for youth. Continue reading →

12 Comments

Posted in Marshall Auerback

Tagged austerity, Eurozone, greece, troika

The Eurozone as a Modern Day ‘Merchant of Venice’

Posted on June 7, 2012 by Stephanie Kelton | 4 comments

By Marshall Auerback
(Readers may skip directly to the post. But why would you?)

PORTIA

A pound of that same merchant’s flesh is thine;
The court awards it, and the law doth give it.

SHYLOCK:

Most rightful judge!

Continue reading →

4 Comments

Posted in Marshall Auerback

Tagged austerity, Eurozone, germany, merchant of venice

Another One Bites the Dust: The ECB Pours Cold Water on Bankia Bailout Solution

Posted on May 30, 2012 by Mitch Green | 5 comments

By Marshall Auerback

It might seem strange to invoke Freddie Mercury and Queen in the context of the eurozone, but it’s the first thought that springs to mind, as Brussels and the increasingly hapless ECB, continue to mismanage their way to financial and economic catastrophe. Yesterday, there were signs that the Spanish plan to recapitalise Bankia (which came with the implied backing of the ECB’s balance sheet) introduced a potential way out of the eurozone’s metastisizing banking crisis. Sadly, it’s another idea which will never get off the bulletin board, as the ECB bluntly rejected any proposal to use its balance sheet to indirectly fund Bankia, the troubled Spanish lender

Continue reading →

5 Comments

Posted in Marshall Auerback

Tagged Bankia, ECB, euro crisis, Eurozone

William K. Black: Greece Is Tearing Europe Apart Politically, Socially and Economically

Posted on May 24, 2012 by Mitch Green | 5 comments

5 Comments

Posted in William K. Black

Tagged austerity, Eurozone, greece

Marshall Auerback on RT’s CrossTalk

Posted on May 22, 2012 by Mitch Green | 2 comments

2 Comments

Posted in Marshall Auerback

Tagged austerity, Eurozone, germany

Will the New York Times’ Reporters ever admit that European Austerity is the Problem?

Posted on May 21, 2012 by Mitch Green | 6 comments

By William K. Black

The New York Times’ reporters covering Europe’s financial, social, and political crises continue to channel Berlin and demonstrate an ignorance of economics so profound that it rivals the Wall Street Journal’s editorial writers and columnists. On May 18, 2012 the NYT published “Rising Greek Political Star, Foe of Austerity, Puts Europe on Edge.” The problem begins with the title. It is austerity that has put Europe over the edge. The Greek leader the article discusses is one of the best hopes from pulling Europe back from self-inflicted disaster. Most of the euro zone has been thrown into a gratuitous recession and the periphery has been cast into Great Depression levels of unemployment. The title reverses the analytics and implies that if only the peoples of the periphery would silently embrace economic catastrophe all would be well with Europe.

Continue reading →

6 Comments

Posted in William K. Black

Tagged austerity, Eurozone, new york times

National Affairs: Eurozone Faces Financial Assault

Posted on May 12, 2012 by Mitch Green | 2 comments

Click here to catch Marshall Auerback’s latest analysis of the ongoing crisis in the Eurozone.

2 Comments

Posted in Marshall Auerback

Tagged austerity, bailouts, ECB, euro crisis, Eurozone, greece, Modern Monetary Theory, spain, unemployment

Spain is the New Greece

Posted on April 29, 2012 by Mitch Green | 13 comments

By Marshall Auerback

Nearly one Spaniard in four is unemployed, according to data released on Friday, as the country’s economic and financial predicament prompted a government minister to talk of a “crisis of enormous proportions”.The data from the National Statistics Institute showed 367,000 people lost their jobs in the first three months of the year. At this pace, Spanish job losses are equivalent to 1 million per month in the United States. That means more than 5.6m Spaniards or 24.4 per cent of the workforce are unemployed, close to a record high set in 1994.

Spain has become the new Greece. Actually, in many respects Spain is now worse than Greece. The Spanish unemployment rate is already so high and unlike Athens, Madrid has made no headway in reducing its public debt levels (whereas the Greeks are close to running a primary fiscal surplus at which point they could leave and turn the problem back on to Brussels). Moreover, Spain has a huge private debt burden that is twice that of Greece.

Although I have warned on these pages before that Spain’s austerity program was leading the country to disaster, my reaction to this economic catastrophe has been one of amazement. Just take a look at this employment data

Spain First Quarter Unemployment: Summary (Table)
2012-04-27 07:00:00.13 GMT

1Q Quarterly Yearly
	2012	Net Change	QoQ %	Net	Change YoY%
Both Sexes
Over 16s	38,493.70	-14.5	-0.04%	-18.4	-0.05%
Active Workforce	23,072.80	-8.4	-0.04%	10.9	0.05%
Employed	17,433.20	-374.3	-2.10%	-718.5	-3.96%
Unemployed	5,639.50	365.9	6.94%	729.4	14.85%
Inactive	15,420.90	-6.1	-0.04%	-29.3	-0.19%
Activity Rate	59.94%	0.00%	n/a	0.06%	n/a
Unemployment Rate	24.44%	1.59%	n/a	3.15%	n/a
16 to 64	30,606.00	-52.5	-0.17%	-171.4	-0.56%
Activity Rate	74.87%	0.13%	n/a	0.44%	n/a
Unemployment Rate	24.59%	1.59%	n/a	3.17%	n/a
Employment Rate	56.47%	-1.09%	n/a	-2.03%	n/a