‘Europe is a mess,’ economist David Rosenberg warns

Posted by Kendall Harmon

Europe is a mess — politically, economically, fiscally, economist David Rosenberg said Monday.

“In less than two years, we are now up to a total of seven European leaders or ruling parties that have been forced out of office, courtesy of the spreading government debt crisis — tack on France now to Ireland, Portugal, Greece, Italy, Spain and the Netherlands. Even Germany’s coalition is looking shaky,” the Gluskin Sheff economist wrote in his note Monday.

“This is quite a potent brew — financial insolvency, economic fragility and political instability.”

Read it all.

Filed under: * Economics, PoliticsEconomyConsumer/consumer spendingCorporations/Corporate LifeCredit MarketsCurrency MarketsEuroEuropean Central BankThe Credit Freeze Crisis of Fall 2008/The Recession of 2007--The Fiscal Stimulus Package of 2009* International News & CommentaryCanadaEurope--European Sovereign Debt Crisis of 2010

Posted May 7, 2012 at 4:16 pm [Printer Friendly] [Print w/ comments]

1. Pageantmaster ن wrote:

A short but interesting article

Perhaps the most shocking thing in the article was the sidebar on the right which reads per Rosenberg:

Triple A - Countries currently rated AAA by all three agencies:

How short it has become.  It is basically [bar Australia and Canada] very Northern and very Western Europe - a third of the region is regarded as fiscally prudent can borrow money at sensible rates.

Moreover and at a stroke the election of Hollande has cast France into extreme doubt, and given what he has been saying today, he won’t get much sympathy here.  With plans for 75% taxes for top band earners in France, people are talking of heading over to London.

Isn’t it typical that when there is a crisis people wave their arms about flailing this way and that, lashing out at those who have been trying to rescue them from drowning.

And it is not just Europe, it is the world which is in trouble.  Standing back a bit, there are large shifts in economic power going on.  The BRICS countries are still growing, and perhaps what we are seeing is less a short term problem, but more a global shift which means that Europeans are going to have to get used to the idea that they will not in the future naturally be wealthy high spending countries, simply because they are, well, European.

May 7, 9:35 pm | [comment link]
2. Terry Tee wrote:

What is to be done?  Reflate via Keynsian policies?  But that involves piling debt on debt and/or devaluing currency via printing money.  Austerity?  That involves trimming state expenditure which deepens the trough in which the economy is trapped.  Trim back the welfare state substantially?  That might produce social instability.  The obvious answer is a judicious balanced mixture of all three, but it requires the wisdom of Solomon.  I have prayed and will continue to pray for those who have to make the economic decisions for our nation. 

What is becoming clear, though, is the unsustainability of our welfare programmes in Western Europe.  At first I bridled at American commentators who described us as welfare junkies and warned of national bankruptcy but I now concede that it is uncomfortably close to the truth.  Y’all over there might be interested to know that there is a big debate here in the UK - our newly re-elected Mayor of London has just given the debate another push - asking by so many of our people prefer a permanent life on benefits while workers from Eastern Europe and elsewhere snap up the jobs.  The really, really, uncomfortable truth is that many of those local non-working people are actually unemployable, with poor education and poor social skills.  Of course there are plenty of talented, hard-working, disciplined people looking for jobs too - so my comment is a heavily qualified sweeping generalisation - but I have met plenty of others no employer would contemplate taking on.

May 8, 5:53 am | [comment link]
Registered members must log in to comment.

Next entry (above): (RNS) Why the United Methodist Church canceled votes on same-sex marriage and gay clergy

Previous entry (below): Central Florida Episcopal Bishop Greg Brewer’s homily at St. Michael’s, Orlando, May 6, 2012

Return to blog homepage

Return to Mobile view (headlines)