Eurozone Inflation has risen to 1.7%, the highest in 2 years. This may put renewed pressure on the ECB in its attempts to stimulate the Eurozone economy using a near Zero Interest Rate Policy
AFP: Eurozone inflation rises to 1.7% in July
"The euro recovered from the day's low after a €5 billion sale of German 10-year debt produced a record-low average yield of 2.37 per cent. An auction of Portuguese T-bills also went smoothly. Analysts said that in the absence of major events or economic data in the euro zone, investors had taken the successful auctions as a cue to renew buying of the single currency": Euro gains following German bond sale - The Irish Times - Wed, Aug 18, 2010
And from the FT: "[...] spreads against “peripheral” debts still narrowed as fears in debt markets ease. Portugal sold more bonds than it anticipated at an auction of short-term debt. Three-month bills commanded just half the yield versus a previous auction, while 12-month bills saw yields rise slightly. That adds to well-received Spanish and Irish bond auctions. The Irish auction went well enough that Bank of Ireland, one of the country’s biggest banks, is considering coming to market with a €1.5bn deal" FT.com / FT's rolling global market overview - Jittery investors keep ?havens? in demand
While the Eurocrats high five each other over glib but amusing headlines about having the ability to raise debt that ultimately will not and cannot be serviced, in the real world, Greece is collapsing thanks to the idiotic austerity program.
Greek Bonds Slump As Austerity Backfires, Country Enters "Death Spiral", And The Violent End Game Approaches | zero hedge
Positive digits flowing around Bloomberg professional screens with complements to the ECB may convey a sense of calm with the myopic sheltered psyche of the Eurotrons, but bond sales meaning nothing to the average European and a lot of them are very, very p1ssed off.
In essence, Greece is dispensable. If Greece can get its act together, it can probably sustain its Eurozone membership. But that's up to Greece. If Greece cannot hack it, the rest of the Eurozone will carry on regardless.
Indeed, the Eurozone wouldn't miss any country which is not prepared to play by the rules. The only possible candidates which could cause concern in this regard are Spain and Italy. But I think they both have the political will to pull through - in Spain's case, with considerable pain.
As for the "analysis" in your final paragraph, it's pure garbage. So what if the average European doesn't understand the finer points? What matters is whether the Eurozone emerges from the global crisis intact. IMO it will. IMO it will also thrive.
If this thread is still around a year down the line, it'll make an interesting case study of the negative mindset of the dedicated Eurozone critics who have no understanding of the political will behind a single currency and the economic capacity of the Euro's drivers to make the project work.
The French President Nicolas Sarkozy has had to call an emergency meeting in the middle of their official holidays with his Prime Minister and his Finance minister as the crisis in the Eurozone deepens.
France?s Sarkozy Summons Ministers to Discuss Cuts, Times Says - Bloomberg.comFrance’s President Nicolas Sarkozy ordered Prime Minister Francois Fillon, Finance Minister Christine Lagarde and Budget Minister Francois Baroin to interrupt their holidays for a meeting on the economy after Moody’s Investors Service warned that the country is closer to losing its AAA credit rating, the London-based Times reported, citing unidentified government officials.
The meeting, set for tomorrow, will discuss a new package of cuts, the newspaper said.
Moody’s said France, along with the U.S., Germany and Britain, is “well positioned” to keep the top rating, but faces a reduced “distance-to-downgrade” because of the challenges associated with fiscal adjustment, the Times said.
Interesting to see how the French will react to these fresh waves of austerity measures. A tad more militant than us I would imagine.
France has massive exposure to Greece which as mentioned 2 posts back is falling apart and presents a deadly contagion for the terminally ill European project
"Equities across Europe rallied on Thursday after the Bundesbank raised its growth forecast for Germany for the rest of the year after a forecast-beating second-quarter": FT.com / Markets / European equities - German growth forecasts boost European equities [emphasis added].
although i dont understand half the stuff you say CS and sometimes you scare the S""hit out of me you do have a way with words.
"may convey a sense of calm with the myopic sheltered psyche of the Eurotrons"