The coordinated confidence-inspiring words from the Eurozone’s fearless leaders yesterday and today about doing whatever it would take to save the euro wasn’t about Greece anymore. Politicians have apparently given up on it. Instead, the fearless leaders were afraid of Spain. Its vital signs were deteriorating. It had threatened with default. So the ECB caved. And in doing so, it threw down the gauntlet.
The Ballooning Cyprus Fiasco
by Wolf Richter • • Comments Off on The Ballooning Cyprus Fiasco
In June, Cyprus had held its nose and requested aid from the Troika, those despised austerity thugs made up of the European Union, the European Central Bank, and International Monetary Fund that have wreaked so much havoc in Greece. This week, these despised Troika inspectors are swarming again over Cyprus. And each time they do, the numbers balloon. How can such a small country blow through so much money? Well….
Foreign Money in US Elections: And There Is A Winner
by Wolf Richter • • 2 Comments
Mitt Romney is venturing overseas to spend two days each in the UK, Israel, and Poland. It will hone his international credentials, give him an opportunity to look “presidential,” and allow him to establish or refine connections. He will also court Americans living abroad. Every vote counts. Campaign brawls will stay “at the water’s edge,” so no speeches or news conferences. But there will be fundraisers. And foreign corporations are donating to both sides.
The Extortion Racket Shifts to Spain
by Wolf Richter • • 2 Comments
After 21 summits to save the euro, followed by dog-and-pony shows to calm the markets, followed by confidence-inspiring pronouncements about insurmountable firewalls and pandemic structural reforms, the euro is in greater danger than ever before. Spanish Prime Minister walked away from the last summit in June with a victory smile. Now, Spain is on the brink. And word is out: default.
But Who The Heck Is Going To Do All The Bailing Out?
by Wolf Richter • • 10 Comments
Spain’s banks are getting bailed out with €100 billion. It won’t be enough, but it’ll buy time—a Eurozone mantra. Three of Spain’s seventeen heavily indebted regions asked for a bailout from the central government, and more are coming, but the central government can’t bail out anything because it’s broke. It needs a bailout for itself and for its regions. A bailout far larger than any of the prior bailouts. And then there’s Italy.
Smashing The Can Instead Of Kicking It Down The Road
by Wolf Richter • • 1 Comment
“The euro is irreversible,” said ECB President Mario Draghi as a whiff of panic began sweeping over the Eurozone. Everybody was supposed to enjoy their long vacation, and nothing important was supposed to happen. But, like a group of disruptive homeless guys, the ECB, the International Monetary Fund, and politicians have apparently gotten tired of kicking the Greek bailout can down the road, and they stomped on it instead.
“Southern Europe Does Almost Nothing—Except Complain”
by Wolf Richter • • 4 Comments
Bulgaria, which has a balanced budget, a growing economy, and a top income tax rate of 10%, fires a withering blast at neighboring Greece where the new government, instead of implementing structural reforms, invokes bankruptcy unless it gets more money. And in Spain, which is teetering on economic collapse, protests erupted in the streets as people resist reforms. So, Bulgaria put joining the euro on ice
Even Counterfeiters Are Giving Up On The Euro
by Wolf Richter • • 7 Comments
My first experience with euros was mid-December 2001 when I travelled to Germany. Bank showcases were filled with euro feel-good agitprop. Euro bills and coins would enter circulation soon, and this was part of the campaign to persuade Germans to surrender their marks. People had apprehensions, but my business contacts were gleeful: the euro would become the dominant reserve currency in the world; oil would be priced in it.
Wielding The Corporate Tax Dodge Code Like A Cudgel
by Wolf Richter • • 4 Comments
I was making coffee this morning when President Obama’s voice ruined it. His words didn’t even sound unreasonable, as I was still half asleep. He advocated giving tax breaks to companies that create jobs in the US, rather than those that create jobs overseas. Mitt Romney also wants to hand out tax breaks and tax cuts, just different ones.
Euro Desperation: German Justices Already Buckled Under Political Pressure
by Wolf Richter • • Comments Off on Euro Desperation: German Justices Already Buckled Under Political Pressure
Jean-Claude Juncker was desperate. The Prime Minister of Luxemburg and President of the Eurogroup is the ultimate Eurozone infighter. “We all know what to do, but we don’t know how to get re-elected afterwards,” he’d once said—now referred to as “Juncker’s curse.” But he, the longest-serving head of state in the EU, knows how to get reelected. So when he is desperate, even the German Constitutional Court listens.