Warner: Time to put the doomed euro out of its misery (15)

There is no mess quite so bad that official intervention won’t make it even worse. Nowhere is this old saw more applicable than in the eurozone, where only a month or so back, leaders were warmly congratulating themselves on having seen off the worst of the debt crisis. As is apparent from the events of the past week, these hopes were not just premature, but naive. The crisis is once again intensifying, with the focus of attention switching from Greece to Spain.

The European Central Bank’s flooding of the banking system with cheap money didn’t solve the problem, or provide more than short-term relief for its symptoms. After a brief period of remission, they are returning. At best, the ECB bought a little time. This has not been used well. Instead, the eurozone has just ploughed on with the same old set of failed policies.

The Spanish government, for example, recently announced 29 billion euros of spending cuts and tax increases. It failed to do the trick, so this week a further 10 billion was added to the tally. This only succeeded in unnerving the markets even more, forcing the ECB to concede that it might have to engage in further purchases of Spanish government bonds.


See Also:

Spanish bailout ‘impossible’ for eurozone, says prime minister Mariano Rajoy

Property market smothered by ‘gigantic’ rate swap costs

Brussels moves to cap banker bonuses

The Return of the Spanish Flu

Bank offers you should refuse

Afternoon Updates:

12:07 pm EDT, April 13th, 2012 — China’s economic growth slows to three-year low of 8.1pc

12:09 pm EDT, April 13th, 2012 — Gold: bank trims exposure to the precious metal amid fears of profit-taking

12:11 pm EDT, April 13th, 2012 — Unemployment hits new record high of 21.8 percent

12:13 pm EDT, April 13th, 2012 — JPMorgan chief warns of ‘catastrophic’ Greek euro exit

12:15 pm EDT, April 13th, 2012 — Portugual first to the post in ratifying EU budget pact

12:17 pm EDT, April 13th, 2012 — Keynesian “Easy Money” Is Nothing But Currency Devaluation

12:20 pm EDT, April 13th, 2012 — Canada not interested in Europe bailout fund

12:22 pm EDT, April 13th, 2012 — Spain’s record borrowing from the ECB increases EU debt worries

12:26 pm EDT, April 13th, 2012 — Europe’s Debt Crisis Getting Worse, Pimco’s El-Erian Says

12:31 pm EDT, April 13th, 2012 — Debt crisis: Live

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  • Jack

    I am getting very tired of following this mess. EU politicians and “crats” are sticking to their story like “shit to a blanket” and no matter how bad things get never will we hear one word from them about their ongoing stupidity. Small wonder when you consider they would all lose their jobs if they told the truth.

    My view: The “Euro” has to go and Warner is correct. There is no other solution available but we will not hear it anytime soon from EU “leaders”. The first indication will come with the result of the oncoming Greek election (which I am keeping track of –May 6th) and in that country voters are not “happy campers”. I expect a total “blowout”.

    With that EU bankers are going to be in a world of hurt as Greece votes to leave the EU and thanks to “globalization stupidity” so will many others IN MANY COUNTRIES in the days that follow. Maurice Strong must be pissing his pants this day and for good reason. He is the author of all this mayhem, not that he knew that as he pushed his grand idea.

    When this situation resolves itself globalization is dead and for good reason. Charity extends only so far and when that huge financial “bubble” breaks and investors everywhere are hit with financial ruin our banks and markets are going to stop investing abroad and stick to what they know locally.

    This day I am very thankful that Harper is in control in Canada. He already knows and is protecting this country. More to the point he is pro-actively engaged in planning for a future for Canada based on this very premise (the EU will fail).

    “You see” — Harper has a crystal ball and it tells him “stuff”. “Crouton” never had that visionary capacity and it remains so today. In his case it is all about a museum in Shawingan and a failed old man who never saw it coming. Paul Martin knows that stuff (not that he did any better).

    In truth Harper is the best PM this country has ever had in my lifetime and he needs support as the media endeavours to beat him to death over (of all reasons) the F-35 — a jet Canada truly does need — and a jet that the Liberals signed onto.

    I believe that.

  • Don D.

    Whoops this reply s/b under #4 “Afternoon Updates”

  • Don D.

    Re: #4
    Thank goodness for bureaucrats, whatever would we ever do without them.