EU ministers are simply failing to convince investors that Italy is on a safe distance from Greece, Ireland and Portugal.
The following graph (HT FT Alphaville) shows how alarmingly quick things can move.
To add fuel to the fire an almighty row has broken out between PM Berlusconi and his Finance Minister Tremonti, with Berlusconi reportedly saying:
"You know, he [Tremonti] thinks he's a genius and that everyone else is stupid...I put up with him because I've known him for a long time and one has to accept the way he is. But he's the only one who is not a team player."
Not exactly inspiring confidence.
There is nothing new about the Italy crisis other than the fact that the market ahs woken up to the fact that Italy has the biggest debt in the Eurozone, is uncompetitive, that its debt is growing, and as long as they stay in the Euro, thay have now way out. They share this problem with the other PIIGS, Belgium and in the end, France. Euro-politicians though cannot see reality, and will continue to evade it till it hits them in the face.
ReplyDeleteI think the europrats can see reality but are determined to ignore it because it is spoiling their lovely dream. They will get a sudden drenching of cold facts sooner rather than later. Let's hope there's no cash left for pensions.
ReplyDeleteThe creation of the Euro was a disaster which could have been foreseen by anyone with half a brain. But they wanted to press on with making a United States of Europe governed by Brussells. There has never been a better case for leaving the EU but none of the three main parties can see that.
ReplyDeleteIt is perfectly natural for the Europrats to change the rating system to get the answers they need.
ReplyDeleteThe Euro and the EU are the problem not the solution which is the complete removal of the unwanted EU from Europe.
ReplyDeleteIf they are allowed to form their own credit agency then they will be able to bend the whole financial system and the whole thing will fail. Unfortunately this will harm everyone as I do not see the EU going down without major damage to the UK. This will be inorder to spite us for not having joined the Euro.