Back into it after an enjoyable week at the beach. Satyajit Das has an interesting post on the blog Naked Capitalism concerning the crisis in Europe. He states that EU leaders have issues with their geography and before giving in to the unavoidable:
*Ireland told everyone that they were not Greece.
*Portugal is now telling everyone that it is not Greece or Ireland.
*Spain insists that it is not Greece, Ireland or Portugal.
*Italy says it is not in the “PIGS”.
*Belgium insists it was no “B” in “PIGS” or “PIIGS”.
Russian writer Leo Tolstoy wrote that: “All happy families resemble one another, every unhappy family is unhappy in its own way.” The same applies to beleaguered European countries.
Greece had a bloated public sector and an uncompetitive economy sustained by low Euro interest rates.
Ireland suffered from excessive dependence on the financial sector, poor lending, a property bubble and an increasingly generous welfare state.
Portugal has slow growth, anaemic productivity, large budget deficits and poor domestic savings.
Spain has low productivity, high unemployment, an inflexible labour market and a banking system with large exposures to property and European sovereigns.
Italy has low growth, poor productivity and a close association with the other peripheral European economies. Italy has recently started to rein in its budget deficit. The Italian banking system is relatively healthy but exposed to European sovereign debt.
Belgium is really two ethnic groups that share a king and high levels of debt (about Euro 470 billion, 100% of GDP).
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