And so Mr Berlusconi, with his car salesman smile and his suspiciously dark hair, has gone, he has been an absolute gift too to the satirists; Italy I doubt, will dwell too much on his resignation. As Hugh Denis said on Friday night’s ‘The Now Show’ on Radio 4, how can you put much trust in a man who had to endure 53 confidence votes since 2008? Clearly investors did not have a great deal of faith in the man; one only has to look at the eye watering 7% interest on government loans and the frenzied activity on the market to see how uncertain people have been about the Italian economy. With similar events witnessed in Greece earlier this week, with the exiting on George Papandreou, and with it looking increasingly likely that Mario Monti will succeed Mr Berlusconi, it is entirely possible that we bear witness to dawning of a new era for the Technocrat. Some readers may recall that I suggested that Berlusconi went months ago, I only wish that my spooky ability to predict events in Italian politics was transferable to the Eurolottery! Read the rest of this entry
The Eurozone states seem to be stuck in quicksand, and yet no one seems to be able to do anything to stop it. Sir John Major has been lamented by many as being one of our more underwhelming Prime Ministers, but he is intelligent and savvy in his way, and knows when to hold his tongue; it is all the more pertinent therefore to take notice when he does speak. His views on how the Eurozone should try to make its way out of its current mess seem to make a great deal on sense, but so far nobody seems to be listening. For anyone who has not heard what he said (and with all the shouting about the Rugby and important things like that, it’s quite understandable), he suggested the banks recapitalising and then Greece defaulting on her loans. If the European Financial Stability Facility were then given a banking licence, he says, they could either buy Greek government bonds centrally, or else use the money to recapitalise the bank. This move could not only restore confidence in the Eurozones ability to control the extent of the crisis, but also allow countries like France and Germany to focus on the fate of other countries such as Italy and who knows, even the possibility of a spanish bailout. Read the rest of this entry
Although I feel Janet Daley is over dramatic in her prediction of the end of the Eurozone, I feel she may have a point with her when she writes that the end really does seem nigh! With the rather sombre predictability of an episode of Eastenders, Italy has had its credit rating downgraded by Standard & Poor. Considering the rather uninspired austerity package cobbled together by the Italian government, it really doesn’t come as a shock, and personally I would have been surprised if they hadn’t done so. Nevertheless consumer groups Adusbef and Federconsumatori have retaliated by threatening to sue S&P. In fact, the reverberations of this move have been sharply felt all over Europe; not only have bond yields in Spain and Italy soared, but there are now worries over the future of the loans promised to Greece. If this is not finalised by the middle of next month, the Greek government have warned that there will be no money left in the till to pay public sector workers. It does seem like a pretty bleak outlook and more and more people are suggesting that it is evermore likely that Greece will default.
Conversely however, Bloomberg has reported that all the signs point to a fairly optimistic outlook for Germany in the third quarter, with most sources describing the economy as “robust”. While they freely admit that the long-term outcome is still uncertain, not least because of the precarious situation many of the peripheral Eurozone countries find themselves in, there does seem to be the faintest hint of a silver lining to this rather dark cloud. This is where I feel Daley (and she is no means on her own) is a little premature in her Eurosceptic doomsaying. Surely it stands to reason that if there is growth in Germany, then in an indirect way, that bodes well for other Eurozone countries, particularly the likes of Greece and Italy. German industrial production and private consumption of goods e.g.car sales, etc, started to rise again for the first time in months. With growth comes confidence in the financial sector and Germany is determined to ensure the survival of the Euro. Furthermore, if there is still grown in Germany then this of course means that not only will she be able to deliver on her promises for bailouts to various states, but also, should it continue there will still be money available if/when she is called upon for further bailouts (and lets face it, that’s pretty likely). It is only when Germany is in trouble that we really have to start worrying.
I am thinking of adding clairvoyant to my CV; amid, what have so far been rather lackluster attempts to get the government to agree to spending cuts and the like, Italy has gone on strike. Well, not exactly all of Italy, but enough to make the day-to-day running very difficult. Some of the BBC’s more creative headline writers are clearly on holiday, one headline I saw on their website said ‘Italian austerity measures prove unpopular’, I think there are few people who would welcome austerity measures at any time, but when there is no money left in the kitty, you have to tighten your beautifully hand stitched leather belt; unless of course you are Italian it seems. Read the rest of this entry
As the Americans make an 11th hour deal to increase their hideously bloated overspend, the focus of the jittery Gnomes of Zürich and elsewhere swings like a pendulum back to the Eurozone. Am I the only one who can see the resemblance between the Eurozone crisis and that scene in Star Wars where the Death Star blows up? Click here to keep reading