Some years ago, a small rural town in Spain twinned with a similar town in Greece. The Mayor of the Greek town visited the Spanish town. When he saw the palatial mansion belonging to the Spanish mayor, he wondered how he could afford such a house. The Spaniard said: “You see that bridge over there? The EU gave us a grant to build a two-lane bridge, but by building a single lane bridge with traffic lights at either end this house could be built.”
The following year the Spaniard visited the Greek town. He was simply amazed at the Greek Mayor’s house – gold taps, marble floors – it was marvelous. When he asked how this could be afforded the Greek said; “You see that bridge over there?” The Spaniard replied: “No.” Enough said.
Ah yes, things are going to get very interesting over in Europe. Hindsight is 20/20, but still you have to wonder how the EU didn’t anticipate problems when you unite a variety of countries, cultures and priorities under one currency and governing body. Things are messy, and will probably get messier before it all shakes out. The US markets do not like the uncertainty of what is happening in Europe, which is amusing given they should look in a frickin’ mirror; but I digress.
Here are a few articles to catch you up on the EU mess:
– Our first story is from the NYT which Dadof3 refers to as either “the enemy’s newspaper” or “that liberal rag.” I found it a very interesting article which talks about splitting the EU into two ‘speeds’ and there will be countries that are “In or Out.” I wonder if they will have Heidi Klum say “auf wiedersehen” to Greece, Italy, Portugal and others.
– Home of my boy The Coop, CNN has a nice article about what Italy plans to do in order to address the world’s concerns about Italy’s fiscal health. A couple noteworthy points: Italy’s economy has been stagnant for years and the nation has debts equal to 120% of its over all output; the retirement age will increase 2 years to age 67 by 2026 (way to put that off); the overall debt load is six times that of Greece; austerity measures could go into place as soon as Saturday and Berlusconi will step down shortly thereafter.
– “Growth has stalled in Europe, and there is a risk of a new recession,” said VP for Economic and Monetary Affairs Olli Rehn this morning. He ticked off a list of the EU’s ills: expectation that the economy will contract 4th quarter of 2011 and no growth for the first three quarters of 2012; poor job creation; and lock of confidence in fiscal sustainability. Sound familiar?
– The IMF is going to step in and play “global referee” in this financial crisis because “The EU doesn’t have that kind of credibility” right now. There is lots of bickering about the loss of sovereignty over individual country’s finances as the EU demands inspection of their economies by “outside authorities.”
– Greece is in for a very rough two years. The European Commission says their economy will contract by a whopping 5.5% this year and another 2.8% in 2012. The GDP has already contracted since 2009 approximately 15%. Unemployment is expected to reach 18.4% for the next two years.
In non EU news:
– Nixon’s Secret Watergate testimony will be released and available online today. This will be some good reading.
– Joe Paterno is fired over the sex scandal allegation. He said he would retire at season’s end, but that was not good enough for the Board of Trustees. Sad ending to a spectacular career.
– Jefferson County Alabama decided to declare bankruptcy over a $3.14 billion sewer debt. That’s shitty and it probably won’t be the first or last municipality to declare bankruptcy.
– A mystery written from the point of view of a person with Alzheimer’s won a Wellcome Trust Book Prize. Alice LaPlant’s, “Turn of Mind,” according to the panel’s chair, “emphatically confirms the ability of literature to tell us more about the heart and soul of an illness than any textbook.” I’m picking this up for my plane ride next week.
