Just how bad is the real economy in Greece after five years of recession, countless strikes, and 17.7% unemployment? Registrations of vehicles plunged 30% in 2011, after having plunged 37% in 2010. They’re now at the lowest level in over 20 years. Troika inspectors are on their way … to demand yet more cuts. And the Prime Minister puts the nuclear option on the table.
Euro
Missing: 13.3 Billion Deutschmarks
by Wolf Richter • • Comments Off on Missing: 13.3 Billion Deutschmarks
In late 2001, German banks sold Euro Starter Kits—sealed pouches with €10.23 in coins. One of many steps in the arduous process of weaning Germans from their D-Mark. I bought one and still have it. It’s in the back of a drawer, next to a D-Mark coin. And that coin is part of a vast phenomenon: 13.3 billion in missing Deutschmarks. But now people see a reason to hang on to them.
French CEO About Ratings Agencies: ‘We Have To Shoot All These Guys’
by Wolf Richter • • Comments Off on French CEO About Ratings Agencies: ‘We Have To Shoot All These Guys’
“We’re experiencing the beginning of the repercussions of the financial crisis,” said Michel-Edouard Leclerc, CEO of the second largest retailer in France. He has never seen so much “rational behavior among consumers” and so much “fear of getting screwed.” Until now, the crisis has touched mostly the financial world, but in 2012, it will hit the real economy. “It’s always the people who end up paying,” he said.
The Previously Unthinkable Becomes A Planned Event
by Wolf Richter • • Comments Off on The Previously Unthinkable Becomes A Planned Event
Governments and companies around the world have been preparing for a collapse of the Eurozone—simple prudence requires them to do that. Theoretical exercises for a hypothetical scenario, they call it. But recently, these theoretical exercises have taken on practical overtones. And even the public is now encouraged to prepare for the demise of the euro.
Political Realities Threaten To Split The Eurozone
by Wolf Richter • • Comments Off on Political Realities Threaten To Split The Eurozone
Sarkozy will be the only French president since World War II with two recessions under his belt, if current forecasts are correct. Recessions are rare in France: between the war and the financial crisis, there were two. Against this backdrop, Sarkozy faces a tough reelection campaign. And front runner François Hollande has vowed to oppose the German dictate on how to save the Eurozone. So it might all unravel.
Germany’s Last-Ditch Compromise, At A Price
by Wolf Richter • • Comments Off on Germany’s Last-Ditch Compromise, At A Price
“I’m very happy with the result,” Merkel told the cameras. But the agreement may be illegal under EU law and may devastate weaker economies. It elevated Germany to a leadership role that other countries perceive as domineering. By isolating the UK, it cut a deep gash into the EU. And it can’t be put into a treaty. But it did offer a compromise of sorts.
Sarkozy: “The Risk That Europe Will Explode”
by Wolf Richter • • 3 Comments
The Swiss government is preparing for a collapse of the euro while 27 heads of state convene for another EU summit in Brussels to find that elusive solution to the debt crisis. Goal: treaty changes that would impose Germany’s new religion of budgetary discipline on all 27 member states. But opposition has cropped up, and timing turns out to be impossible.
When Bond Buyers Pull Out Their Calculators
by Wolf Richter • • Comments Off on When Bond Buyers Pull Out Their Calculators
As the euro debt debacle unfolded, Germany benefited from a reputation as safe haven: yields on its 10-year bonds dropped below the rate of inflation while yields spiked in other countries. So when it offered €6 billion in 10-year bonds at a record low yield of 1.98%, it expected them to fly off the shelf. They didn’t. “Disaster,” the media screamed worldwide. But….
Euro Schizophrenia in Germany
by Wolf Richter • • Comments Off on Euro Schizophrenia in Germany
My German contacts want to keep the euro. They’ve gotten used to it. They like it in their wallets. It’s so convenient for cross-border travel and commerce. And it has been strong. But now that the European bailout fund has descended into irrelevance, they fret about the euro’s future. They want it saved. And they’re increasingly willing to pay a price.
Germany Sees Greece’s ‘Worst-Worst-Case-Szenario’
by Wolf Richter • • Comments Off on Germany Sees Greece’s ‘Worst-Worst-Case-Szenario’
Judging from the stream of rumors and energetic denials, German bureaucrats, experts, and politicians are furiously working on dozens of projects that all deal with the debt crisis, and they go off in as many directions. But at the end, there is what they call in their inimitable German a Worst-Worst-Case-Szenario.