Archive for the ‘Spain’ Category


Friday, August 19th, 2011

European Crisis Deepens | Via Meadia

The bad news just keeps coming. Coming close on the recent revelation that economic growth is slowing faster than expected in France and Germany, British labor figures have disappointed forecasters and it seems that Greece is heading for yet another recession despite optimistic predictions to the contrary.

A familiar pattern is emerging here. European leaders attempt to paper over the problems afflicting their economies with unconvincing and half-baked measures and rosy forecasts about the future. Markets initially respond briskly when European leaders emerge from a huddle with a new “fix”; disillusionment sets in within a few days as the limits of the agreements become clear.

Over time, this approach loses credibility.  New communiques are greeted with slacker and shorter rallies.  Meanwhile, the underlying problems are getting worse, not improving.

The entirely predictable recession in Greece, for example, means that the Greeks are headed for yet another failure to meet the tough fiscal targets imposed by the EU.  Greece’s problems are severe, but Greece is very small.  Europe’s comprehensive failure after countless iterations to get Greece right suggests pretty strongly that it will be unable to manage bigger and more complicated problems in places like Italy, Belgium and Spain.

Breaking this cycle is going to require a more serious commitment to bold steps — perhaps like those proposed today by leading Euro Federalist Mark Leonard – towards overhauling a European system that is quite clearly broken. As Leonard notes, the only way out of the current crisis is both political and economic reform. (more…)



Sunday, August 7th, 2011


Sat, Aug 06, 2011

ANALYSIS: LAST WEEKEND the world’s attention was on Washington DC as America’s politicians peered into the abyss of sovereign default. On Sunday they stepped back. This weekend attention is on Rome and Madrid. Politicians in those two capitals are sliding towards the same abyss.

But there is a big difference between the US and the Mediterranean countries. In America, that country’s leaders walked voluntarily to the edge of the chasm for political reasons. They were not beaten to that point by the bond market.

Political leaders in Italy and Spain are in an altogether more difficult position. They are being propelled towards the precipice because confidence in their economies is draining away. They are clutching desperately for something to halt the slide. But it appears ever less likely that they can save themselves.

With each passing week it seems increasingly clear that Europe is coming to a fork in the road: one route leads to deeper integration, with very considerable political implications; the other leads down into the dark valley of disorderly disintegration. The decision on which way to go will be among the most important collective choices taken by Europeans in the post-second World War era. (more…)



Friday, August 5th, 2011
The Wall Street Journal

  • AUGUST 5, 2011

Stocks Nose-Dive Amid Global


Weak Outlook, Government Debt Worries Drive Dow’s Biggest Point Drop Since ’08

Stocks spiraled downward Thursday as investors buckled under the strain of the global economic slowdown and the failure of policy makers to stabilize financial markets.


The selling began in Europe and continued in the U.S., where stocks plunged from the opening bell. The Dow Jones Industrial Average posted its worst point drop since the financial crisis in December 2008, falling 512.76 points, or 4.31%, to 11383.68. Oil and other commodities were also hammered. Even gold was a safe haven no more as prices fell. Asian markets slid on Friday morning, with benchmark indexes in Tokyo, Australia, South Korea and Hong Kong all falling more than 3% by midday.

Stocks plunged, driving the Dow Jones Industrial Average down more than 500 points, as investors worried about the global economy and Europe’s debt crisis. Paul Vigna has details.




Tuesday, July 26th, 2011

| Brigitte Bouvier

Neil Reynolds

With government spending, virtue hath its own rewards

NEIL REYNOLDS | Columnist profile | E-mail

From Monday’s Globe and Mail
Published Monday, Jul. 25, 2011 2:00AM EDT

In 1900, the governments of the world’s most advanced economies taxed and spent, on average, 10 per cent of respective GDP each year. By 2000, they taxed and spent 33 per cent – France alone taxed and spent more than 50 per cent.

In its most recent analysis of government spending, the Paris-based Organization for Economic Co-operation and Development says its 34 member countries now spend, on average, 44.6 per cent of GDP – and that 10 of them spend more than 50 per cent.

In a similar analysis of a larger block of countries, the Lausanne-based IMD Business School’s World Competitiveness Report says the number of European governments that spend more than 50 per cent of GDP has risen to 12. It puts average government spending in the world’s 58 most developed countries at 47 per cent of GDP and says the 23 biggest state spenders are all European countries. From this perspective, the very concept of limited government – from which many of our blessings flow – looks quaintly anachronistic.

Here are the WCR’s top 10 state spenders: (1) Ireland, 66.1 per cent of GDP; (2) Denmark, 58.9 per cent; (3) Finland, 56.3 per cent; (4) France, 56.2 per cent; (5) Sweden, 54.5 per cent; (6) Belgium, 53.9 per cent; (7) Austria, 52.9 per cent; (8) Italy, 51.4 per cent; (9) Netherlands, 51.2 per cent; (10) Britain, 51.0 per cent.

Europe’s increase in public-sector spending, of course, can’t be sustained. Most top-spender countries will be compelled to cut back. OECD Secretary-General Angel Gurria says bluntly: “They have no choice.” If they continue to dispense two-thirds of their respective economies, chances are they’ll live with near-zero economic growth.

If they live with near-zero growth, they’ll need to commandeer more GDP. In this spiral, they’ll never have enough GDP, never enough growth. (more…)

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