Wednesday, February 22, 2012

Greece: So far, I've yet to find anyone who differs with the view that the deal has done nothing but buy time and exhaust the participants. Postponing the day of reckoning in the process. No one seems to think the Greek government will be able (even assuming it's willing) to deliver much of what it's promised. So, a crisis postponed, rather than resolved. It would be negligent in the extreme if the EU's politicians and bureaucrats didn't have a Plan B for next time Greece comes begging. But who can be confident of this? And will it mean an orderly exit (the Grexit) from the eurozone? Of course, the real question is - Who's next? The betting seems to be on Portugal. Followed by Italy, Ireland and Spain. With Germany being willing to do almost anything to keep them in the EU and the eurozone. Unless, of course, the German people are asked. Which they probably won't be.

Some feel that Greece won't get anywhere - except further down the plughole - on her own and that she merits something akin to the Marshall Plan. I'm betting this isn't Plan B and that it'll never happen. If only because there'd immediately be a long list of additional mendicants. No, as of now Greece is a pariah state and sometime within the next year or so will become the first ex-eurozone state. But probably not the last.

Sensing scope for an easy ride, Madrid has said Spain won't be able to achieve a deficit of 4.4% this year (after 8.8% last year) and will be asking Brussels to accept a figure in excess of 5%. Meanwhile, the European Commission will publish its latest forecasts for Spanish growth tomorrow. They're widely expected to be lower that last autumn's.

But it's not all bad news; Spain's exports continue to grow at a healthy lick. In 2011, they were 15.4% up on the previous year.

And 72% of French people surveyed recently said they 'love' Spain. Followed by Germany (63%), the USA (62%), Japan (53%) and Brazil (52%). I'm not sure the UK even made the list. From the opposite standpoint, 47% of Spaniards said they'd like to live in France and 48% said they'd like to work there. Interestingly, while 68% of Spaniards felt that France was a leader in fashion, only 60% thought it a leader in international cuisine,

Rabbits are proving something of a nuisance on the AVE high-speed train tracks near Valencia. So a company called ADIF has spent half a million euros(!) hunting them down, "using ferrets as bait". I can easily believe they used ferrets but "as bait"??? Can anyone imagine a rabbit approaching a ferret?

Having started this post with a disaster, I'll end on the same theme . . . Are we sleep-walking towards a war with Iran? God/Allah forbid. But that's the only possible reading of the runes right now. What a dreadful thought. But at least it will take Greece off the front pages.


Perry said...

One would have thought that a small rabbit catcher fitted to the front ends of the AVE woulld be more practical than using ferrets. After all, cowcatchers work; what's so tough about wabbits, eh doc?

Colin said...

Nice one, Perry.

Azra said...

My mother is currently in Barcelona with her siblings, bonding on holiday. And they all agree that it's a pleasant surprise - not at all what they expected.

How far is Spain from being where Greece is right now - in terms of financial crises etc?

Mike the Traditionalist said...

Well looking around here in La Coruña it is difficult to believe there is a crisis. Bars are full, everyone is still smoking, just about everyone you pass on the street is talking into a mobile phone so they are not short of money. Many small shops have gone out of business because of a lack of sales but as we have dozens of Chinese run shops they could be taking away the trade from the smaller shop keepers who can´t compete and are forced to close. Perhaps people are digging out the money they have hidden under the mattress.

Azra said...

The Chinese have also taken over here in SA. We benefit in that most things are dirt cheap because greedy South African's love to make a 900% profit on just about everything. However, local businesses suffer as a result. Again, maybe if they weren't trying to *con* people out of their money, we'd support them. Things are tight but people seem to be going about their days - eating out, going out etc (in SA, entertainment is very popular and cheaper in comparison to other countries)

Colin said...

@Azra. Good question. Right now Spain sees to be in a much better position than Greece ever was. It has a new (right-of-centre) government which is talking the talk and walking the walk. Which goes down well in Brussels. And with investors. Spain has no difficulty in selling her bonds and the premium over the German rate of interest is much lower than it was a month or so ago.

On the other hand, Spain clearly isn't going to meet the deficit target for 2012 of 4.4%. And it's quite possible the austerity measures demanded by Brussels could well result in GDP 'negative growth' of 1% forecast by the EU yesterday.

If this happens, it's quite possible, I guess, that things would get difficult again and bail-outs will be necessary for Spain and other countries. Hence the need for a 'firewall' and the arguments about how big it must be.

Here's an article published today which addresses the question you raise, even if it doesn't fully answer it.

Finally, Barcelona is is one of the richest parts of Spain. So I wouldn't expect it to show many signs of the recession.

What dis they expect? Something like Soweto??

Azra said...

lol, no actually. Spain was never one of Mother's "Must See" places. And even though her brother lives in Denmark and has been to Spain several hundred times (Almeria and other parts for work purposes) - I don't think either of them expected to thoroughly enjoy the place and their experiences.

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