Italy's 10 year bond rate past 7% again ...

[BlasterBates]

"Never mind. It will probably blow over during the next few weeks." - Blaster, Nov 2011

In November the Eurozone was on the verge of melt down. That is now over. Italy has just had an auction with an average rate of 3,5%.

Obviously in the Daily Telegraph they want to sell newspapers so they´re keeping the imminent destruction going. There aren´t really any serious economists around now that think there is an imminent problem (apart from the Daily Telegraph obviously).

Yes obviously Southern European countries now need to follow through on their austerity budgets.

The UK is no less worrying, which makes the "Schadenfreude" seem rather ridiculous,

[AtW]

The UK is no less worrying, which makes the "Schadenfreude" seem rather ridiculous,

I would not worry about UK for it has found a unique way out of this problem.

Step 1: give KBE to supposedly independent person in charge of monetary policy
Step 2: said Sir Knight will vote to print money to buy Govt gilts to keep effective interest down to 2-3%
Step 3: everybody else in UK pays for it with 5-7% inflation.

It really boils down to it - in eurozone some Govts have to pay 5-7% interest on some bonds they have to sell now, but residents in eurozone suffer only 3% inflation.

[minestrone]

In November the Eurozone was on the verge of melt down. That is now over. Italy has just had an auction with an average rate of 3,5%.

Obviously in the Daily Telegraph they want to sell newspapers so they´re keeping the imminent destruction going. There aren´t really any serious economists around now that think there is an imminent problem (apart from the Daily Telegraph obviously).

Yes obviously Southern European countries now need to follow through on their austerity budgets.

The UK is no less worrying, which makes the "Schadenfreude" seem rather ridiculous,

The UK faced up to the facts a couple of years ago, set about an (thankfully) unforced austerity budget just before the tulip hit the fan.

This is slightly more than a few southern euopean nations being a bit crazy with the wallet no matter what you think the Telegraph thinks. Italy is close to going to the wall and Germany cannot pay them off, the big problem is that Italy cannot see that, the French are not that far behind and they seem to think it is all abit of a joke just now.

[Doggy Styles]

WMS

No schadenfreude here.

As soon as we got rid of New Labour, the UK started implementing their own deficit-reversal policies, because they can.

But there's no easy answer to the eurozone problems, and they make it far more difficult for us and everyone else to trade.

[AtW]

As soon as we got rid of New Labour, the UK started implementing their own deficit-reversal policies, because they can.

For that New Labour needed to be ridden off.

EU offered treaty that would ensure such important things like debt control is taken out of hand of populist politicians - this could have prevented whole debt bubble if it was enforced early on.

One would have thought Conservatives would be all up for it to ensure that even when they are not in power the other party can't wreck country finances.

I guess they have other priorities.

[sasguru]

In November the Eurozone was on the verge of melt down. That is now over. Italy has just had an auction with an average rate of 3,5%.

Obviously in the Daily Telegraph they want to sell newspapers so they´re keeping the imminent destruction going. There aren´t really any serious economists around now that think there is an imminent problem (apart from the Daily Telegraph obviously).

Yes obviously Southern European countries now need to follow through on their austerity budgets.

The UK is no less worrying, which makes the "Schadenfreude" seem rather ridiculous,

You're talking about short term bonds
I'm afraid the 10 year benchmark bonds, which are what matters, sold at 6.98% - as near to the dangerous 7% as makes no differnce

[BrilloPad]

Yes obviously Southern European countries now need to follow through on their austerity budgets.

The chances of them actually doing so are zero. And it still doesn't alter the fact the Southern Europe is 30% less competitive than the North.

[sasguru]

The chances of them actually doing so are zero.

Probably just as well, since implementing austerity plans means their economies will shrink - and that means even less chance of paying off debts.
Stupid economic policy from the Germans - they should look to history rather than making the same mistakes the US did in the 30s.

[BrilloPad]

Probably just as well, since implementing austerity plans means their economies will shrink - and that means even less chance of paying off debts.
Stupid economic policy from the Germans - they should look to history rather than making the same mistakes the US did in the 30s.

I think the issue is the are looking at history - but it is the twenties rather than the thirities they are looking at.

If they look to the 30s and target GDP rather than inflation, it will buy them time to split the Euro into a Nothern and a Southern block.

[BlasterBates]

Probably just as well, since implementing austerity plans means their economies will shrink - and that means even less chance of paying off debts.
Stupid economic policy from the Germans - they should look to history rather than making the same mistakes the US did in the 30s.

The Germans are indeed following through on the 1930's austerity policy because it worked. The reason they went for austerity was because the inflationary policy failed miserably. The coalition introduced a new currency and went for austerity, by 1933 Germany was recovering, and Hitler's support at the polls was beginning to dwindle. It wasn't Hitler that got he economy going it was the austerity measures beforehand that created the conditions for a new boom; hence the reason why Germans now go for austerity.

You can check through history, austerity budgets always set the scene for a boom.

The big mistake in the 1930's was protectionism not the austerity.