I promise I am not going to witter on an on, but the leader in the FT is absolutely clear that the market is pricing in one or two scenarios, as much more probable. The break-up of either the Euro, or the Fiscal Union in Europe, the Greek Exit is not the issue, and nor is some shock at jobs figures which confirmed what everyone else knew. The data which spooked everyone yesterday was global, with Brazil also reporting slowdowns and China looking worrying. ‘Contagion’ is now the word on everyone’s lips long after the scabs have appeared which signify that should have been a concern in 2008.
Spanish ministers have been sat in rooms with the US, Germany and the IMF and are defiant about the need to avoid a bailout, while Mario Draghi uses it as an opportunity to scold. People really should stop referring to Bankia as a troubled bank, this accidentally happened to. It was cockup from start to finish a bringing together of many dodgy banks, designed to hide serious problems, and to contain a property bubble and not a cock up that Spanish people voted for and the political spectrum has moved far away from those asserting authority.
After a Europe wide democratic rejection of austerity, the results of the Irish referendum are being seen as offering democratic legitimacy to it, low participation no deterrent to those in the media who described it as overwhelming acceptance of austerity from the Irish people. In Greece the left wing party Syriza, have outlined a proposal for renegotiating the terms of loans and interest payments.
Debt is a fairly universal thing. Analysts are saying Spain cannot meet its obligations, in Greece I think they are at the point where the CAB have showed them which letters they need to send to their creditors to say enough is enough. Highly amusing watching the centre-left here hitch on to the word left, without understanding this is a sign that the lies they sell are over or understanding they have spent a year trying to squash discussion which threatened their neo-liberal bubble.
This is the question now at hand for Europe, even without our press allowing it, can we have an examination of how austerity works to increase indebtedness in people and countries, and how that destroys anything but the potential for those people and countries to be exploited? Because there is a long history and Joseph Stiglitz himself was shouting from the rooftops years ago.