Sovereign debt bubble thread

[Iormlund]

German Minister of the Interior is now calling for the expulsion of Greece from the EZ: "I'm not saying that Greece should be thrown out but rather to create incentives that it can't say 'no' to."
At the same time that the ruling coalition is trying to pass a resolution that would forbid further contributions to firewalls in place to avoid contagion to Italy and Spain.


It looks like they've finally figured out the € wasn't worth it in the first place and it's time to tear the whole thing down.

[MadImmortalMan]

How much does the interior minister have to do with it? Could it just be for internal consumption, and he's a safe mouthpiece?

[DGuller]

German Minister of the Interior is now calling for the expulsion of Greece from the EZ: "I'm not saying that Greece should be thrown out but rather to create incentives that it can't say 'no' to."

[Iormlund]

Rajoy has replaced several key figures at the IRS, including the anti-fraud squad leader that had uncovered a corruption ring involving his party.

He has promoted instead the former head of a financial regulatory commission under Aznar, who back then had to step down under suspicion of corruption and tax fraud.

[Iormlund]

Uh, oh!

It seems Rajoy has finally grown a pair. He has presented a budget with 5.8% deficit, well over the 4.4% our northern friends demanded. Any bet on what will be the response?

[citizen k]

Uh, oh!

It seems Rajoy has finally grown a pair. He has presented a budget with 5.8% deficit, well over the 4.4% our northern friends demanded. Any bet on what will be the response?

Deploy the Condor Legion?

[The Larch]

Uh, oh!

It seems Rajoy has finally grown a pair. He has presented a budget with 5.8% deficit, well over the 4.4% our northern friends demanded. Any bet on what will be the response?

Deploy the Condor Legion?

Don't say it too loud, turning our cities to rubble could be considered a good way to revitalize the construction industry again. 

[Iormlund]

Uh, oh!

It seems Rajoy has finally grown a pair. He has presented a budget with 5.8% deficit, well over the 4.4% our northern friends demanded. Any bet on what will be the response?

Deploy the Condor Legion?

Don't say it too loud, turning our cities to rubble could be considered a good way to revitalize the construction industry again. 

You might be onto something there. Rajoy is one cunning sob!

[Tamas]

Uh, oh!

It seems Rajoy has finally grown a pair. He has presented a budget with 5.8% deficit, well over the 4.4% our northern friends demanded. Any bet on what will be the response?

Hm, what can happen? The EU does nothing, undermining the just-accepted fiscal pact and potentially causing panic, plumetting EU economics? Or, escalate the situation with Spain, after which either Spain yields with worse conditions than it had, or Spain leaves the euro, collapsing the EU and possibly the world economy as wel.

Cleary a benefical move for Spain!

[Sheilbh]

Apparently Dutch budget forecasts mean they're breaking the fiscal rules this year and are projected to break them for the next 3 years.  It'll be interesting to see the response to the Dutch (a fiscal Saint) and the Spanish (an important member) breaking them.  This a very early test of credibility.

I feel a bit sorry for Rajoy on this.  Isn't part of the reason because it turned out the deficit for last year was far worse than estimated?  So it's actually far more difficult to achieve the deficit agreed.  At some point I think the Eurozone statisticians should stop having such positive estimates for everything (like the Greek economic rebound they're projecting ).  It makes them look ridiculous and means that our leaders, instead of addressing the world as it is, are fearlessly solving a much milder economic crisis that exists in Eurostat projections.

[Iormlund]

Uh, oh!

It seems Rajoy has finally grown a pair. He has presented a budget with 5.8% deficit, well over the 4.4% our northern friends demanded. Any bet on what will be the response?

Hm, what can happen? The EU does nothing, undermining the just-accepted fiscal pact and potentially causing panic, plumetting EU economics? Or, escalate the situation with Spain, after which either Spain yields with worse conditions than it had, or Spain leaves the euro, collapsing the EU and possibly the world economy as wel.

Cleary a benefical move for Spain!

It's actually a pretty good move. The current "solution" to the crisis is not only not working but actually making things worse. By ignoring the demands he's forcing the issue and avoiding a still deeper recession. It also plays well at home, where he can be seen as resisting the diktats of Germany - instead of people focusing on the 2% rise in unemplyment. We're almost at 24% now.

[Jacob]

Jeesus fuck. 24%. That's insane.

[Iormlund]

Jeesus fuck. 24%. That's insane.

We'll get close to 30% soon. And that doesn't even count those studying or those who have given up.

The last reform was supposed to become a vehicle for businesses to reduce working hours and wages. My entirely anecdotal experience is that lots of people are getting the axe instead.

[Jacob]

The last reform was supposed to become a vehicle for businesses to reduce working hours and wages. My entirely anecdotal experience is that lots of people are getting the axe instead.

I guess the theory is that because they can fire more easily, companies will be less afraid of hiring in the future...?

[Iormlund]

The last reform was supposed to become a vehicle for businesses to reduce working hours and wages. My entirely anecdotal experience is that lots of people are getting the axe instead.

I guess the theory is that because they can fire more easily, companies will be less afraid of hiring in the future...?

It's a nice theory. Problem is firing an employee that has only been working for you for a few years is dirt cheap. Free for unskilled labour, since you can chain  temp contracts for 2 years, then get someone else.
As I said a few pages pack, the problem of enacting reforms now is that not only there's no actual work, but there are so many unemployed that you can pressure whoever you hire into work overtime for free if the need arises. This (or rather deeper) reform would have been fine 6 years ago, when it was quite a feat to be unemployed (longest I managed was 3 days and I wasn't even looking for work, they called me).