Is the end nigh for the Euro? [vol. 3]
Discussion
Aunty is finally catching up: http://www.bbc.co.uk/news/business-28783850
Ashoka Mody said:
(until recently a top IMF bailout official in Europe)
The IMF's internal studies deemed it is impossible to run primary surpluses on the scale needed to pay off Italian debt. He advises the Italian authorities to start consulting “smart sovereign debt attorneys to ensure orderly debt restructuring”.
"This does not have to be a one-off cataclysm. There are ways of stretching out the obligations over time. But there is no point waiting until the ratio reaches 150pc. They should get on with it right away,"
The IMF's internal studies deemed it is impossible to run primary surpluses on the scale needed to pay off Italian debt. He advises the Italian authorities to start consulting “smart sovereign debt attorneys to ensure orderly debt restructuring”.
"This does not have to be a one-off cataclysm. There are ways of stretching out the obligations over time. But there is no point waiting until the ratio reaches 150pc. They should get on with it right away,"
Oh and here's a goody for Steffan's euro-gravy train meme, from Algarve News;
Luís Durão Barroso…. has landed a top job at the struggling Bank of Portugal. The 31-year old... was taken on without having to suffer the stress of an interview as no other candidates were sought by Portugal’s struggling central bank. Luís’ father is José Manuel Durão Barroso, the 11th President of the European Commission...
Nice work if you can get it
Luís Durão Barroso…. has landed a top job at the struggling Bank of Portugal. The 31-year old... was taken on without having to suffer the stress of an interview as no other candidates were sought by Portugal’s struggling central bank. Luís’ father is José Manuel Durão Barroso, the 11th President of the European Commission...
Nice work if you can get it
Edited by Andy Zarse on Thursday 14th August 12:57
Andy Zarse said:
Oh and here's a goody for Steffan's euro-gravy train meme, from Algarve News;
Luís Durão Barroso…. has landed a top job at the struggling Bank of Portugal. The 31-year old... was taken on without having to suffer the stress of an interview as no other candidates were sought by Portugal’s struggling central bank. Luís’ father is José Manuel Durão Barroso, the 11th President of the European Commission...
Nice work if you can get it
So many good posts on here recently it is difficult to decide which points to emphasise. Here is my attempt.Luís Durão Barroso…. has landed a top job at the struggling Bank of Portugal. The 31-year old... was taken on without having to suffer the stress of an interview as no other candidates were sought by Portugal’s struggling central bank. Luís’ father is José Manuel Durão Barroso, the 11th President of the European Commission...
Nice work if you can get it
Edited by Andy Zarse on Thursday 14th August 12:57
Certainly Andy Zarse is right on the button with his comments above and what better demonstration can there be than that exposition on the criminality at the heart of the Euro mountain. Plumb job not advertised given to the son of best friend, who just happens to be very highly placed within the EU and no other candidates even considered?
Stitch up from the start with the miscreants lining their own pockets once again. This really does show how the individuals fiddling the EU finances are making hay whilst the sun shines by feathering their own nests. Just utterly disgraceful and with the EU rubber stamping this sort of disgraceful behaviour the future of Europe does not look at all good.
The comments of Digga are also of much interest to me because as Digga says this just demonstrates the disgraceful dishonestty once again in the heart of the EU.
Digga said:
Aunty is finally catching up: http://www.bbc.co.uk/news/business-28783850
Referring to the BBC finally beginning to grudgingly admit what has been apparent to most observers of this problem and certainly to the readers of this thread. The supposed economic recovery in mainland Europe is a complete nonsense. The truth is that the falling economic output from Germany, (for heaven's sake always the powerhouse of Europe for so long), France, Italy, Greece (output already minimal) Portugal (ditto) Spain (double ditto) and so on clearly confirms that this "Recovery" in the EU has in fact been ruined by the madness of the EU approach. And this failure must have direct consequences.The consequences must be that the EU is right on the point of falling back into fullblown recession. There is no hope of the recovery continuing with economic facts like these staring the EU and all the observers in the face.
Draghi's a very clever man and he may be able to spin (with large dollops of EU taxpayers money which will be thrown away in the spinning) an apparent improvement in the output in order to bolster confidence in the Euro and the EU. These senior operators have got huge power until, of course, the penny drops, in the markets. Then there is the devil to pay. Draghi may be able to buy more time. But he cannot improve the underlying lack of economic perfrmance that these figure clearly indentiify. Therefore Draghi has no real solution.
What the EU needs to do is to enable the failing states to recover. Which as we can see from these latest figures, the EU cannot do. What the EU is actually doing therefore, is to print money and lend it to failing states, that could otherwise not afford to borrow the money. Then, because the states cannot afford to repay the interest on the money, the EU must lend the states further money which the states cannot afford to borrow, to repay the interest on the money borrowed from the EU. Otherwise the failing states cannot afford to repay the interest on these debts. Ths reads like the complete nonsense that this is. There is no future in this madness.
If anyone in business suggested lending an insolvent business money, without security and then to lend them more money, without security, because they cannot afford to repay either the interest or the capital, and to keep on repeating those loans they would be charged with fraud. That is exactly what Draghi and the EU are doing to the failing states. It cannot work.
Inevitably there must be an adjustment to the structure of this nonsense and that adjustment will have to recognise the reality that the southern EU states were never able to operate economically within a currency dominated by Germany and continue to be unable to operate economically within that economic straight jacket. They cannot afford the price and therefore they must fall away.
Nothing the EU have done since ths crisis first started has either recoginsed or addressed the underlying weakness in this Union. A significant number (200 million ??) of the EU electorate are locked into a wholly unaffordable currency which their country cannot afford to belong. Their economic output simply is not adequate to remain within a currency valued at that level. Nor could these states ever have afforded to belong to ths grouping. In cosequence there will inevitably be a regrouping. It really is just a matter of time.
In a traditional sense I would agree entirely with Steffan of course - for he will undoubtedly have a better handle on things than I do or ever will.
However I am beginning to wonder if in fact seeing things - things like loans - as having any real value is yesterday's understanding of economics. The pre-credit card version of the concepts of trade.
Back then things were, vaguely, real. Continuation of life required food, shelter and some form of security from marauding itinerants.
The creation of wealth was a byproduct of those three basic needs augmented by finding stuff and coming to understand how it could be useful - hard stone, metals, comestibles and so on - and some luck with both discoveries and the weather playing ball year to year with providing a sufficiency of food without also demanding 100% waking hour toil just for survival.
This approach, with all of its inequalities but nevertheless closely shared risks - of attack, disease, crop failure and so on - was based on real time local product creation and exchange needs. Barter and trading. A manufacturing and farming economy that dealt with real stuff.
In the current world view it seems we see greater value in 'money' than we do in 'stuff' and there are larger rewards to be had shuffling money around and shaving a margin at every turn than there are to be made in making and growing stuff. (To put it very simplistically.)
Money as an industry, if one might call it that, seems to be no more than a game of Monopoly. Some virtual tokens of a nominal value are created, the game is played and some of the player end up with more virtual tokens then the others. It feeds no one, not even the successful players really for the "money" is not real. However playing the game can distort the perception of values in the real world, to the debenefit of most people most of the time. (And yes I am offering an extreme generalisation here.)
Lending someone money you have printed is a confidence trick on those who, if they but understood it, provide the belief in the smoke and mirrors. Charging "interest" on the printed virtual money is another. The interest and the original loan are worth nothing - it is virtual money that exists only because, like the Emperors New Clothes, people want to believe they can see it and understand the process. When that confidence is shaken people start asking to see something they believe is "real" as a guarantee of the loan. At which point a Draghi or two head of behind a curtain and come back with a hat out which pops a rabbit. Ah ha! people say. "See, a rabbit! I could eat a rabbit if I had a mind to. Therefore this 'loan' is real. It can provide me with sustenance should I need it".
So long as someone or some groups of people are prepared to keep all of the plates spinning it probably doesn't matter one iota what the numbers are. The greatest stability is that people believe that there is stability - that things are, in general, fiscally equitable and in line with their expectations. In general so long as they still have enough bartering power to feed themselves and shelter themselves and have, for the most part, some confidence in their security it is likely that things can continue. The numbers don't much matter, generation to generation, so long as the pattern of life, modifying all the time of course, can be assimilated into the trading process one way or another.
Should that balancing act stop "bad things" may happen. For instance should one group or another suddenly jump into ascendency or fall into a trading abyss because the old balance has been lost too disruptively and the new equilibrium has yet to be settled in and accepted.
It has always been this way once humanity passed the "struggling just to survive" point and grew as it moved into the Industrialised era. Fiscally the system survived (in the main) and withstood a few setbacks from time to time. There were always people who would live on tic thus being in possession of virtual buying power provided, did they but know it, by the others in the barter group.
The problems arise if we flip credit to be debt in our world economic view. Some will because they will find ways of making themselves personally better able to trade for "stuff" - or perhaps because their vanity project ideals say they should. In doing so they apply the (often badly written) rules of the game to their advantage and the known disadvantage of those they defraud (in moral terms if not according to the law at the time). However what the numbers are really matters not a jot except by comparision with 'others' and how they perceive the balance of "buying stuff" power to have changed. Ripples are fine. Huge storms are not.
One might argue that devaluing debt is, in effect just adjusting so that people trade their output value for input value at the correct price price for the utility it provided once adjusted for inflation. Meanwhile life continues. However if you try to pay off debt (which is not real debt since it is generated against monopoly money), waves are created and the balance of the system is lost. If bad enough the instability could be catastrophic.
From time to time I have wondered whether, in part, the EU is running an experiment to see just how far the central controllers can push the local people in various areas before they induce a real explosion of instability. It would also be useful to know that if one was a federalist with a vanity project objective for which one wanted to push things forward more rapidly to fit into one's lifetime.
However I am beginning to wonder if in fact seeing things - things like loans - as having any real value is yesterday's understanding of economics. The pre-credit card version of the concepts of trade.
Back then things were, vaguely, real. Continuation of life required food, shelter and some form of security from marauding itinerants.
The creation of wealth was a byproduct of those three basic needs augmented by finding stuff and coming to understand how it could be useful - hard stone, metals, comestibles and so on - and some luck with both discoveries and the weather playing ball year to year with providing a sufficiency of food without also demanding 100% waking hour toil just for survival.
This approach, with all of its inequalities but nevertheless closely shared risks - of attack, disease, crop failure and so on - was based on real time local product creation and exchange needs. Barter and trading. A manufacturing and farming economy that dealt with real stuff.
In the current world view it seems we see greater value in 'money' than we do in 'stuff' and there are larger rewards to be had shuffling money around and shaving a margin at every turn than there are to be made in making and growing stuff. (To put it very simplistically.)
Money as an industry, if one might call it that, seems to be no more than a game of Monopoly. Some virtual tokens of a nominal value are created, the game is played and some of the player end up with more virtual tokens then the others. It feeds no one, not even the successful players really for the "money" is not real. However playing the game can distort the perception of values in the real world, to the debenefit of most people most of the time. (And yes I am offering an extreme generalisation here.)
Lending someone money you have printed is a confidence trick on those who, if they but understood it, provide the belief in the smoke and mirrors. Charging "interest" on the printed virtual money is another. The interest and the original loan are worth nothing - it is virtual money that exists only because, like the Emperors New Clothes, people want to believe they can see it and understand the process. When that confidence is shaken people start asking to see something they believe is "real" as a guarantee of the loan. At which point a Draghi or two head of behind a curtain and come back with a hat out which pops a rabbit. Ah ha! people say. "See, a rabbit! I could eat a rabbit if I had a mind to. Therefore this 'loan' is real. It can provide me with sustenance should I need it".
So long as someone or some groups of people are prepared to keep all of the plates spinning it probably doesn't matter one iota what the numbers are. The greatest stability is that people believe that there is stability - that things are, in general, fiscally equitable and in line with their expectations. In general so long as they still have enough bartering power to feed themselves and shelter themselves and have, for the most part, some confidence in their security it is likely that things can continue. The numbers don't much matter, generation to generation, so long as the pattern of life, modifying all the time of course, can be assimilated into the trading process one way or another.
Should that balancing act stop "bad things" may happen. For instance should one group or another suddenly jump into ascendency or fall into a trading abyss because the old balance has been lost too disruptively and the new equilibrium has yet to be settled in and accepted.
It has always been this way once humanity passed the "struggling just to survive" point and grew as it moved into the Industrialised era. Fiscally the system survived (in the main) and withstood a few setbacks from time to time. There were always people who would live on tic thus being in possession of virtual buying power provided, did they but know it, by the others in the barter group.
The problems arise if we flip credit to be debt in our world economic view. Some will because they will find ways of making themselves personally better able to trade for "stuff" - or perhaps because their vanity project ideals say they should. In doing so they apply the (often badly written) rules of the game to their advantage and the known disadvantage of those they defraud (in moral terms if not according to the law at the time). However what the numbers are really matters not a jot except by comparision with 'others' and how they perceive the balance of "buying stuff" power to have changed. Ripples are fine. Huge storms are not.
One might argue that devaluing debt is, in effect just adjusting so that people trade their output value for input value at the correct price price for the utility it provided once adjusted for inflation. Meanwhile life continues. However if you try to pay off debt (which is not real debt since it is generated against monopoly money), waves are created and the balance of the system is lost. If bad enough the instability could be catastrophic.
From time to time I have wondered whether, in part, the EU is running an experiment to see just how far the central controllers can push the local people in various areas before they induce a real explosion of instability. It would also be useful to know that if one was a federalist with a vanity project objective for which one wanted to push things forward more rapidly to fit into one's lifetime.
Steffan said:
What the EU needs to do is to enable the failing states to recover. Which as we can see from these latest figures, the EU cannot do. What the EU is actually doing therefore, is to print money and lend it to failing states, that could otherwise not afford to borrow the money. Then, because the states cannot afford to repay the interest on the money, the EU must lend the states further money which the states cannot afford to borrow, to repay the interest on the money borrowed from the EU. Otherwise the failing states cannot afford to repay the interest on these debts. Ths reads like the complete nonsense that this is. There is no future in this madness.
Absolute madness.Great paragraph,blows my mind how crazy it is and how they get away with it.Europe has missed a golden opportunity to trade its way out of trouble.
In July, I bought, through a supplier here, a new wiring loom for a 1970 Fiat 500 that I'm renovating. It arrived at the end of the month.
Unfortunately, the manufacturer supplied the wrong loom. So, my supplier emailed them to request the correct one. More fool us. He emailed them on the 4th August. Only to be get an automated reply from the Italian manufacturer informing him that they will be closed for the rest of the month.
It beggars belief.
In July, I bought, through a supplier here, a new wiring loom for a 1970 Fiat 500 that I'm renovating. It arrived at the end of the month.
Unfortunately, the manufacturer supplied the wrong loom. So, my supplier emailed them to request the correct one. More fool us. He emailed them on the 4th August. Only to be get an automated reply from the Italian manufacturer informing him that they will be closed for the rest of the month.
It beggars belief.
Funkycoldribena said:
Steffan said:
What the EU needs to do is to enable the failing states to recover. Which as we can see from these latest figures, the EU cannot do. What the EU is actually doing therefore, is to print money and lend it to failing states, that could otherwise not afford to borrow the money. Then, because the states cannot afford to repay the interest on the money, the EU must lend the states further money which the states cannot afford to borrow, to repay the interest on the money borrowed from the EU. Otherwise the failing states cannot afford to repay the interest on these debts. Ths reads like the complete nonsense that this is. There is no future in this madness.
Absolute madness.Great paragraph,blows my mind how crazy it is and how they get away with it.Blib said:
Europe has missed a golden opportunity to trade its way out of trouble.
In July, I bought, through a supplier here, a new wiring loom for a 1970 Fiat 500 that I'm renovating. It arrived at the end of the month.
Unfortunately, the manufacturer supplied the wrong loom. So, my supplier emailed them to request the correct one. More fool us. He emailed them on the 4th August. Only to be get an automated reply from the Italian manufacturer informing him that they will be closed for the rest of the month.
It beggars belief.
This is a throwback to the days of agri-economy, when everyone left their posts to help with the harvest. Over years, it morphed into a month-long public holiday. Post crunch, I have come across more enlightened and commercially savvy Italian firms doing a good job to at least keep the wheels turning during the holiday, even if it is nigh on impossible to arrange transport of good out of the place.In July, I bought, through a supplier here, a new wiring loom for a 1970 Fiat 500 that I'm renovating. It arrived at the end of the month.
Unfortunately, the manufacturer supplied the wrong loom. So, my supplier emailed them to request the correct one. More fool us. He emailed them on the 4th August. Only to be get an automated reply from the Italian manufacturer informing him that they will be closed for the rest of the month.
It beggars belief.
however, this does serve as but one reminder of the many and varied ways (4 commutes a day with a siesta/leg over with your's or someone else's wife being another) which the more dysfunctional EU economies scupper their chances. One could argue all these daft habits and regulations make only a minor difference, but it may well be the difference between decline or success IMHO.
Anyway, that'll teach you to let the smoke out of your wiring harness.
Mermaid said:
Funkycoldribena said:
Steffan said:
What the EU needs to do is to enable the failing states to recover. Which as we can see from these latest figures, the EU cannot do. What the EU is actually doing therefore, is to print money and lend it to failing states, that could otherwise not afford to borrow the money. Then, because the states cannot afford to repay the interest on the money, the EU must lend the states further money which the states cannot afford to borrow, to repay the interest on the money borrowed from the EU. Otherwise the failing states cannot afford to repay the interest on these debts. Ths reads like the complete nonsense that this is. There is no future in this madness.
Absolute madness.Great paragraph,blows my mind how crazy it is and how they get away with it.Once you remove barter and the grey/black market economies from the concept all "money" belongs to the state in one or another of its forms. We are merely allowed to use it under direction.
Taxation is really about balancing stuff well enough to convince the tax payers (i.e. the margin amount that we think we are entitled to but need to pay back to ensure, in so far as it is possible, stability and security, etc. in our lives) that things are OK and avoid riots leading to social meltdown.
Shuffling the creditworthiness around the system is how one fiscal entity gains advantage over another. (There may be other ways too but "money" is the more flexible concept compared to, say, gold or diamonds or potatoes).
To be credible a fiscal entity needs to be seen to be in control monetary matters as far as the lenders are concerned but to make sure its efforts in that regard do not become points of mass dissatisfaction to the serfs in its "society". Thus it creates way to define "reasonable" taxes to reclaim a proportion of what it shovels out to the masses and as many additional schemes as it can get away with to chip away at the rest of its loans to members of the society without those scams uniting "society" into a coordinated resistance that might lead to large scale social instability.
Against this background it's hard to see how "the numbers" could be prevented from creeping up. But in fact it probably doesn't matter that the measures seem to represent figures that grow constantly - it's all relative to the total interaction rather than some sort of absolute measure. Hence the perpetual attempts to explain to people how the value of something today compares to its nearest equivalents at times in the past.
It's all a matter of faith and confidence - two fickle human attributes with suspect reliability.
What could possibly go wrong?
LongQ said:
Lots of very intersting stuff.
Agreed and fully understood.For once, there's quite an intelligent post on zerohedge in this regard: http://www.zerohedge.com/news/2014-08-14/70-years-...
Digga said:
Blib said:
Europe has missed a golden opportunity to trade its way out of trouble.
In July, I bought, through a supplier here, a new wiring loom for a 1970 Fiat 500 that I'm renovating. It arrived at the end of the month.
Unfortunately, the manufacturer supplied the wrong loom. So, my supplier emailed them to request the correct one. More fool us. He emailed them on the 4th August. Only to be get an automated reply from the Italian manufacturer informing him that they will be closed for the rest of the month.
It beggars belief.
This is a throwback to the days of agri-economy, when everyone left their posts to help with the harvest. Over years, it morphed into a month-long public holiday. Post crunch, I have come across more enlightened and commercially savvy Italian firms doing a good job to at least keep the wheels turning during the holiday, even if it is nigh on impossible to arrange transport of good out of the place.In July, I bought, through a supplier here, a new wiring loom for a 1970 Fiat 500 that I'm renovating. It arrived at the end of the month.
Unfortunately, the manufacturer supplied the wrong loom. So, my supplier emailed them to request the correct one. More fool us. He emailed them on the 4th August. Only to be get an automated reply from the Italian manufacturer informing him that they will be closed for the rest of the month.
It beggars belief.
however, this does serve as but one reminder of the many and varied ways (4 commutes a day with a siesta/leg over with your's or someone else's wife being another) which the more dysfunctional EU economies scupper their chances. One could argue all these daft habits and regulations make only a minor difference, but it may well be the difference between decline or success IMHO.
Anyway, that'll teach you to let the smoke out of your wiring harness.
http://www.theguardian.com/commentisfree/2014/aug/...
fbrs in June 2013 said:
. next up; demographic crisis in old europe as the more entreprenurial youth and wealthy leave and the locals push back against immigration...
Just looking at the early pages on this volume of the thread...I've just walked through the city centre of Southampton and popped into a few shops, cafes etc. The amount of European youngsters working behind the counters is simply staggering, only bested by the amount of foreign languages being spoken by the actual shoppers.
I think it's clear the demographics haven't been taken with sufficient seriousness. Here is a quite long and technical blog by respected economist and author Edward Hugh which makes the case.
http://spaineconomy.blogspot.co.uk/ If you read his work, he is constantly drawing demographic parallels between Japan and Europe and plotting them against economic stats. It's really quite scary...
Anyway, here's his take on Spain's population problem, which I would guess would make the crisis in Italy very similar:-
Spain isn't facing the best of scenarios. Where once people were arriving, the dire state of the country's labour market means they are now leaving. And once we factor in immigration, things start to get a bit more dramatic. As the IMF notes (in the 2014 selected issues document):
"Demographics have turned negative. After expanding at a fast pace until 2007, population growth slowed significantly and turned negative in 2012. This is likely to be a new trend, as INE projects working-age population to continue to decline over the next years........Labor dynamics will make a much weaker contribution to potential output. Demographics will be a drag on growth due to declining working-age population (emigration and ageing). The Spanish statistical agency (INE) expects working-age population to fall by 1 percent a year over the medium term."
During the boom years over nearly 6 million immigrants came to live or work in Spain. The population - which as we have seen is nearly stationary in terms of births minus deaths - shot up from 40 to 46 million. But now, as the IMF say, this dynamic has turned negative. Quite how many people of working age are leaving Spain every year is hard to say. This, in part, is because while the number of former immigrants leaving is known with a reasonable degree of accuracy, the number of young Spanish nationals who do so is much harder to pin down, in part because you need to go to receiving countries like the UK and Germany to obtain the data since most Spaniards who are working abroad have not registered with the national authorities. According to the latest estimates (30 June 2014) the net number of emigrants leaving Spain in 2013 was 256,849. Of these the net number of Spanish nationals leaving was 45,913. But this latter number is confusing since during 2013 some 190,000 former immigrants obtained Spanish nationality and some of these subsequently left for other EU countries. More to the point perhaps, is that these are net numbers. The gross numbers are even more shocking: over half a million people left Spain in 2013 (547,890 to be exact), while some 291,041 new immigrants arrived.
Now I don't want to get into the issue of the enormous tragedy that is taking place daily on Europe's southern borders (and in any event many of the newcomers currently arriving in Spain are doing so as part of family regroupment processes) but the absolute number of people leaving is very large, and those leaving possess a skill set which is vastly superior to that of those arriving, so in the longer run the human capital drain on Spain is massive, again reducing the potential longer term growth rate. As the IMF point out, projections here are pretty risky, but still the Spanish statistics office (INE) have made an attempt, and the result can be seen in the table below. The impact of this hemorrhage (if it is confirmed over time) on Spain's population pyramid will look something like this.
Basically Spain's population will suddenly have become much smaller and much older. The population will fall by 2.6 million, and the number of people in the 20 to 49 age group will fall by 4.7 million (or 22.7%). This is why it is so important to try to do something more and boost employment rapidly. Otherwise the impact on long term growth will be sizable, and the pressure to reduce pensions constant. This INE population and emigration forecast is, if you like, based on a no policy change assumption, on what will probably happen unless substantially more is done. It is the sense of urgency about this need to do something more that I - and others - do not find encapsulated in the phrase "Spain has turned the corner". If these population projections are realized then quite simply it won't have done so. Pensions, for one thing, will be set on a continuously downward path, which is why I think pensioners could be convinced of the need for them to make sacrifices now, if the situation were better explained to them. For another the debt which is currently accumulating will have fewer and fewer people left to pay it. And lets not even start talking about the impact of this sharp reduction on the value of Spanish property.
The real problem in Spain - and this issue isn't treated in the report - is the complete collapse of civic confidence in many of Spain's institutions, from the Bank of Spain, to market regulator CNMV (the Bankia IPO, Preference Shares), to politicians and political parties (the Barcenas affair, among many others), to the monarchy. It is this crisis of confidence which makes it so difficult to get the consensus to make more sacrifices.
Many say that there can't possibly be 25% unemployment in Spain since if there were there would be a revolution (referring to the existence of the underground economy but conveniently forgetting that the worst years of the 1930s depression were not years of revolution, those came later). What people are missing about Spain is the way the credibility of the institutional structure is weakening. Voices talking about a constitutional crisis are growing. The economic crisis basically coincided with the moment when the set up established - including the return of the monarchy - during the transition from Franco's dictatorship to democracy was increasingly seen as having "run its course". Many observers recognise that major constitutional reform is needed and some kind of "rebirth" and renovation in the political system. Last months EU elections were the latest warning signal. The two main political parties (the so called institutional parties) for the first time since the transition failed to get over 50% of the popular vote between them, while the Syriza-like Podemos - who hadn't even been listed in the opinion surveys - surged from nowhere to take 5 seats and 9% of the vote. And in Catalonia a large majority of voters voted for parties who are actively campaigning for independence from Spain. A general election is coming next year, but it is hard to see either of the "old" parties getting a majority without a complex set of coalition partners. So rather than asking whether Spain has now gone round the bend perhaps the Fund would have been better off sticking with "Getting better, but not out of the woods yet, not by a long way".
http://spaineconomy.blogspot.co.uk/
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff