Read it at Calculated Risk
CR: The ECB's LTRO has bought a little bit of time, but if the policymakers stay focused on austerity, they will fail. A key European analyst pointed out last week that essentially all recent sovereign issuance in the periphery has been purchased by in-country banks, and that was related to the LTRO from the ECB. In other words, there is no private market for peripheral sovereign debt. The key analyst concluded: "The EMU (Economic and Monetary Union) is over".
Krugman: "Insane in Spain"
by Bill McBride
by Bill McBride
As I said from the outset, Germany will scuttle it. The Bundesbank is unwilling to agree what it takes.
2 comments:
As long as looking for data to support MMT on unemployment vs. spending I think Spain may be an excellent case.
Probably Spain has an structural problem with unemployment because tax are historically high for the level of services provided + low income levels to housing costs ratio. This eventually had to be solved with inflation.
With the euro capital flows from the core and the credit expansion it facilitated worked extremely well as increased demand even taxes staying relatively high (this with the population increasing by more than 7 millions in a decade, for a country which had 40 million population almost a 25% increase). Had the population not increased not only the employment level would had stayed at european levels, but there would have been an outstanding increase of wealth and conversion with other european nations.
So kinda easy, tax cuts and increase spending, keep taxing imports highly because they costs are increasing as external creditor or financial sector is not willing to finance imports anymore and substitution or cutting consumption is a must and things should work out theirshelves.
"with the population increasing by more than 7 millions in a decade, for a country which had 40 million population almost a 25% increase"
Very interesting Anon...
Resp,
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