The Eurozone crisis and America

According to the CIA Factbook estimated Spanish public debt in 2011 will be about 68% of GNP. German public debt is about 81% of GNP.

And I thought the Spanish had budget surpluses until 2007 when the recession struck and revenues plummetted.

Why is Spain in trouble and Germany considered a model?

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2186rank.html

 

Germany's debt is shrinking.

http://news.yahoo.com/german-debt-down-81-2-percent-gdp-141101587--finance.html

 

Did legality stop being a binary distinction while I wasn't looking again?

I hate when that happens.

 

There became gray areas the second she turned out to be a cop.

 

You mean that was a nightstick?

 

There's legal, illegal, extralegal, quasilegal and barely legal.

 

You selling magazine subscriptions again?

 

But the German level of debt to GNP is still higher than Spain is thier econmey doing so much better. Spain only started to run deficits when the recession hit and revenues collapsed. Why did Spain suffer so much more than Germany and face a default?

And the British have a higher debt to GNP than Spain. They are cutting spending but the economy does not appear to be responding.

 

Sure it's responding. It's just responding by falling into recession. The entire program of cuts was predicated on the idea that hundreds of thousands of laid-off government workers would fall into the loving employment embrace of the private sector.

The shock that that hasn't happened would be hilarious if it weren't so maddening.

You can't eat a falling debt-to-GDP ratio. I've yet to see a solution to these problems that includes what people are actually supposed to do to earn a living. But Santander only earned a billion and a half euros in the first quarter, so who cares about people.

 

They're all sitting on shitty real estate portfolios. That's THE issue in Spain. I laugh when I see two-thirds of Spanish banks claiming that their NPL ratio is less than that of the sector at large. Clearly most, if not all, of them are lying.

Where I have an issue is that when the next Dexia happens, be it Santander or UniCredit or whoever, 50,000 people are going to lose their jobs (directly -- a lot more indirectly) while the executives and officials who signed off on all this shit get golden parachuted to the Mediterranean coast. Meanwhile, the fund managers betting on failure will rake in a couple million more in bonuses.

The little guy bears all the cost of failure, but the big guy "earned" all the benefits of success? Bullshit.

And we've been over demand for German exports. You keep touting Germany as a paragon of virtue, when its economy is founded on using an unworkable currency to sell overpriced crap to countries that can't afford it.

 

I feel like you are looking at a European problem through an American lens. You just underestimate the lengths Europe will *continue* to sacrifice itself as a whole to keep the union together. And as we know, that has a lot less to do with economy that with social dynamics post-1939. I don't think as Americans we can fully understand how important it is to the EU to maintain unity. Germany will prop up the Eurozone far longer than would be economically pragmatic. There's been a lot written about this post-meltdown.

It's also worth noting that in the grand scheme of things, these potential defaults do not comprise a significant portion of the world market. There's a reason everyone keeps bankrolling these struggling nations -- the cost of propping up a tiny economy like Greece is low compared to the irrational hit the world markets would take from a country's default.

Gee, I wonder where all that irrationality comes from?