Wednesday, February 27, 2013
"Italian Deadlock Rekindles Anxiety About Euro Zone"
This Article about Europe is interesting. Maybe the euro-zone crisis is not over and Italy is showing it because of this political election? What are your thoughts on how the Eurozone is looking like it has not recovered and may be stuck in the recession because of their austerity measures?
Subscribe to:
Post Comments (Atom)
The Euro-zone has not recovered in any way. Minuscule increases in GDP and employment, do not mitigate the 2-4 year contractionary downfall into their abysmal trough.
ReplyDeleteThe elections in Italy illustrate that notions of volatility may just be getting started for nation. There's nothing investors hate more than rapid changes...and a candidate running on a 'protest' platform is bound to shake things in the region.
Moreover, both candidates are anti-austerity. The IMF and ECB both have ordered more austerity measures for Italy as a stark condition of their fiscal aid. If the Italian government rejects these measures into the future, they are in essence, rejecting any rope out of their financial pit.
I cannot believe that "Italian gross debt is expected to peak above 128 percent of gross domestic product this year — the highest level in the euro zone after Greece, and up from 126 percent last year". When one focus on those types of data, one can see that something is going bad. One do not need to be smart to realize that the austerity policies are not a result. However, the politician are the only ones that have not realized. I cannot say: "that is the recipe", but I am sure that the extremes are not. Italy cannot go from black to white or from austerity to nationalism. As Quiggin mentions in his book, the key is to balance the economy between the fee market and the government. While it is true that the Euroze was the potential economy with the Euro, it does not mean that Angela Merkel can decide which options are the best for other countries. I feel that the problem in Eurozone is based on the intervention of foreign countries in your sovereignty.
ReplyDeleteAndrew I agree with you completely in that the Euro-zone crisis is not settled. To me the key point in the article that shows this says, "panic...seized financial markets on Monday and carried over into European stock and bond trading on Tuesday." If the crisis had been over, investors would not have panicked to the degree in which they did because of an election. Interesting to see what happens with the Italians moving forward.
ReplyDeleteThe Eurozone crisis is definitely not settled. Greece and Italy are far from being back to where they were before the crisis even started. The Euro currency is down. Even when you got politicians saying the democratic party in Italy is not longer supported because its like a "dead man talking". This is far from over and a solution still has not been found.
ReplyDeleteI agree with everyone that the Euro-zone crisis is not settled yet. The commitment that Euro-zone had previously reached about central bank agreeing to buy large amounts of bonds from countries with shaky finances was far from coming true. The unstable government with political turmoil is dragging the whole Euro- zone down. Europeans are reaching the limit of their patience so I feel Euro-zone will be stuck in their recession longer that we expect.
ReplyDelete