Wednesday, December 01, 2010

Look behind you!

While the ramifications of tuition fee policy for the stability of the Coalition, and the very existence of the Lib Dems are all very interesting, they are starting to seem a touch parochial.  Really seriously interesting things are happening in the Eurozone.
A good basic rule of politics is that nothing much changes most of the time.  Reforms and policies are trailed, events are breathlessly foretold - all with the potential to uproot life as we know it.  Most of the time, it’s hard to spot the difference afterwards.  This time though?
As stark analyses go, it’s hard to better Willem Buiter’s view on Eurozone economies:
Ireland, Greece And Portugal Are Insolvent, Spain Will Be Soon, Italy And Belgium Are Threatened
The markets are taking the view that the Portuguese are just weeks away from needing a bailout, the Spanish maybe only a few months.  Is the Euro really going to be sustainable with half its members on life support?  Germany is now growing pretty strongly – they’ll be wanting an increase in interest rates before too long.  But with the whole Eurozone periphery in the deep freeze?
It may be, of course, that this is another case where despite apocalyptic headlines everyone just sort of muddles through and nothing much really changes.  But I’m not sure I’d be betting that way.

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