So much for the action “shifting” away from Europe. Today markets on the continent are melting down, particularly due to the increased Spanish borrowing costs. As I explained yesterday, the votes in Germany to approve the bailout of Spanish banks, which was reiterated by the Eurozone,
effectively reversed the results of the EU Summit by making it explicit
that the Spanish government would be on the hook for the bailout funds,
rather than direct injections into the banks themselves. This has raised those borrowing rates, as it means that Spain, a country already suffering from a high amount of debt, just had €100 billion added onto that.
Spain also approved their austerity program yesterday, which led to riots in Madrid, after tens of thousands participated in mostly peaceful protests throughout the day.
Another austerity program in Spain, in a time of 24% unemployment, has no chance of succeeding, either in improving the economy or even reducing the debt. We have a test case of that today, in Britain:
Read more: http://news.firedoglake.com/2012/07/20/europe-staggered-by-new-round-of-debt-crisis/
Spain also approved their austerity program yesterday, which led to riots in Madrid, after tens of thousands participated in mostly peaceful protests throughout the day.
Another austerity program in Spain, in a time of 24% unemployment, has no chance of succeeding, either in improving the economy or even reducing the debt. We have a test case of that today, in Britain:
Chancellor George Osborne’s deficit-busting plans are struggling to keep up with full-year targets as official figures published today revealed another rise in Government borrowing.
Public sector net borrowing, excluding financial interventions, such as bank bailouts, was £14.4 billion in June, up from a revised £13.9 billion the previous year, the Office for National Statistics (ONS) said.
Read more: http://news.firedoglake.com/2012/07/20/europe-staggered-by-new-round-of-debt-crisis/
1 comment:
I think that for Europe it’s very important to cut expenses and start living within their means. Borrowing can help to fix a part of financial problems but I am afraid that it will not help Europe to get out of the finacial crisis. Only cutting expenses and efficient financial planning can help to stabilize current financial situations and reduce the stress Europeans are going through. People do not trust their money to banks and live through instant payday loans online because it’s necessary to cover basic expenses and stay afloat. Slowly, but the situation is getting better and hopefully that soon European economy will be more stable.
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