The European Union was stripped of its AAA credit rating by the Standard & Poor’s agency on Friday [Dec 20] as the 28-state block struggles to deal with the debt problems afflicting a number of its members and internal conflict over its budget.
Maybe some of them still think Fiat is a car?
Or are they actually downgrading public initiative? If so, how can one pretend to apply a long-term metric to something that's as fickle as mood, propaganda or the act of recognizing context?
Hopefully S&P's New Years resolution is to recognize common sense, forgo innocent fraud, and seek situational awareness?
EU nations don't control their own domestic currencies, so this isn't crazy.
ReplyDeleteGermany can control it... they knew it before getting into the euro.
ReplyDeleteThey knew in 1992 that the merging of the east and west deutsche mark would require later wringing out the piigs and pressuring swiss to out germans
Krugman with an interesting graph here:
ReplyDeletehttp://krugman.blogs.nytimes.com/2014/01/01/the-state-of-the-euro-in-one-graph/?smid=tw-NytimesKrugman&seid=auto&_r=0
"debt to gdp ratios" (comparing a stock to a flow among other things....) is still going up but interest paid on the govt securities going down as cooler heads prevail....
rsp,
Dan,
ReplyDeleteS&P wasn't downgrading any particular member country. It was downgrading the entire, 28-nation block.
That quite clearly includes downgrading the Euro-Parliament, it's budget process, and the ECB as well.