The euro-zone crisis has slipped off the radar screen during the past couple of weeks as gun control and the Boston bombers have dominated U.S. news. But none of the euro zone’s problems have gone away. Political crises beset France, Italy and Spain. Smaller countries, from Portugal to Cyprus, face even more pressing financial troubles. Germany grows less and less willing to foot the bill for bailouts. And for the first time, serious public figures in Europe have begun openly discussing the pros and cons of allowing countries to default on their national debt.
There is, in fact, a historical case for tolerating default. …
Tag Archives: Spain
Brussels identifies 13 countries, including France, in need of urgent action, underlying growing scale of eurozone crisis
In a hard-hitting report on the countries facing macroeconomic imbalances, such as overvalued housing markets or hefty government debts, the European commission identified a total of 13 member states – including France, the Netherlands and Belgium – which it said should take urgent action to restore the health of their economies.
In the beginning, it was just the “Greek debt crisis”. Then markets realized Portugal, Ireland, Italy, and Spain were in bad shape too, and the PIIGS (or GIIPS) were born. But now Cyprus and Slovenia have run into trouble as well, giving us the … SIC(K) PIGS? At this rate, we’re going to have to buy a vowel soon, assuming Estonia doesn’t end up needing a bailout.The euro crisis is entering its fourth year, and, sorry world, this won’t be its last. Now, its long periods of boredom have gotten a bit longer, and its moments of sheer financial terror a bit less terrifying ever since the European Central Bank (ECB) promised to do “whatever it takes” to save the common currency. But, as Cyprus and Slovenia show, the battle for the euro isn’t over yet. Not even close.
On the most important measures of this rate, China is now in the flashing-red zone. The first measure comes from the Bank of International Settlements, which found that if private debt as a share of GDP accelerates to a level 6% higher than its trend over the previous decade, the acceleration is an early warning of serious financial distress. In China, private debt as a share of GDP is now 12% above its previous trend, and above the peak levels seen before credit crises hit Japan in 1989, Korea in 1997, the U.S. in 2007 and Spain in 2008.
The second measure comes from the International Monetary Fund, which found that if private credit grows faster than the economy for three to five years, the increasing ratio of private credit to GDP usually signals financial distress. In China, private credit has been growing much faster than the economy since 2008, and the ratio of private credit to GDP has risen by 50 percentage points to 180%, an increase similar to what the U.S. and Japan witnessed before their most recent financial woes.
Barely had European Commission President Jose Manuel Barroso declared yesterday that the worst of the eurozone crisis was behind us than the European statistical office, Eurostat, released the kind of unemployment data that could make your hair stand up on end.
Greece and Spain, the figures showed, now have jobless rates of 26 and 26.6 percent respectively.
The more you look into it the worse it gets. Since November 2011, the Spanish unemployment rate has risen by 3.6 percentage points while Greece’s unemployment rate has soared by 7.1 percentage points.
The trend, in other words, is emphatically upwards. Few could be surprised if either or both of these countries passed the 30 percent mark by the end of this year.
Delving deeper, it gets worse still. …
The trailer truck contained 44 valves made of a nickel and chromium alloy that, due to their “high resistance to corrosion, make them particularly apt for use in the nuclear industry,” the ministry said.
Police also seized mounting accessories, export documents to Iran, bank statements and computer information, it said.
The traffic stop at the toll booth resulted, the ministry said, from an investigation that began in Spain last March aiming to restrict the flow of materials and technology of so-called “dual use” items, which can be used for nuclear weapons programs.
Why France could become the biggest danger to Europe’s single currency
Unless Mr Hollande shows that he is genuinely committed to changing the path his country has been on for the past 30 years, France will lose the faith of investors—and of Germany. As several euro-zone countries have found, sentiment in the markets can shift quickly. The crisis could hit as early as next year. Previous European currency upheavals have often started elsewhere only to finish by engulfing France—and this time, too, France rather than Italy or Spain could be where the euro’s fate is decided. Mr Hollande does not have long to defuse the time-bomb at the heart of Europe. Advertisement
Europe’s rising tide of nationalism swept over Belgium on Sunday when separatists seeking independence for the country’s Dutch-speaking north surged in local elections to take power in city halls across the region.
Separatists also made news in Scotland, where the first minister signed an agreement on Monday setting up a referendum on breaking away from British rule. And in Spain, the president of the Catalonia region vowed to push for the right to hold a similar vote on independence.
At first glance, she looked as if she might be a store employee. But no. The young woman was looking through the day’s trash for her next meal. Already, she had found a dozen aging potatoes she deemed edible and loaded them onto a luggage cart parked nearby.
“When you don’t have enough money,” she said, declining to give her name, “this is what there is.”
The woman, 33, said that she had once worked at the post office but that her unemployment benefits had run out and she was living now on 400 euros a month, about $520. …