Monday, June 11, 2012

Continuing to Do the Same Thing, and Expecting a Different Result

That is one definition of insanity. Bailout in Spain hurts foreign markets | Business | TIME.com

With the Greek bailouts, you usually saw one whole day of trading before markets realized this wasn't the end of the line. Not so much with the announcement of the recent Spanish bailout.
MADRID (AP) — Euphoria over a lifeline of up to €100 billion ($125 billion) to rescue Spain‘s hurting banks morphed into a financial markets rout in a matter of hours Monday, as investors digested the still-undefined plan and became concerned the country may be unable to repay the new loans.
I still don't understand why Germany and the Scandinavian countries continue to provide funds for the south of Europe. Most of the "loans" won't be paid back in a timely fashion.

Greece holds elections this weekend, and there is still a chance that the anti-bailout-party will win. And Italy is waiting on the sidelines for its turn getting bailed-out. Like I said, I don't know what the Germans think they get out of this.

3 comments:

Graybeard said...

And Spain is the #4 GDP in the EU. They can't keep them propped up, when Italy is next and Ireland is saying, "Hey, how come you didn't give us as good terms as you're giving Spain? We want a new deal."

Do you think we're in the end game in Europe? A matter of weeks or maybe till September before it just collapses?

Zendo Deb said...

I gave up predicting when people will head for the exits. The powers-that-be in Europe are too married to their vision to admit it isn't working. Which is why we get the unending list of "this is the last chance."

Ireland may want a better deal, but at least they have a viable economy at this point. Greece is on a downward spiral.

As for Spain, I honestly don't know much about them, aside from the banks that are collapsing after a real-estate implosion. Do they have a service economy? Manufacturing? Are they a vacation destination? I know they are number 4 in Europe, but I don't know what that is based on.

Graybeard said...

Hmmmm. CIA World Factbook says 24% manufacturing and ~72% services. I'm guessing tourism is a large portion of that.

I know they elected a spineless government a few years ago - in response to the Madrid train station bombing, but I'm not sure how they compare to France, say, on the Euro-socialism scale.