Best of the Week
Most Popular
1.UK House Prices Momentum Crash Threatens Mini Bear Market 2017 - Nadeem_Walayat
2.Perfect Storm - This Fourth Turning has Over a Decade of Continuous Storms to Come - James_Quinn
3.UK House Prices Momentum Crash Warns of 2017 Bear Market - Video - Nadeem_Walayat
4.Billionaire Investors Backing A Marijuana Boom In 2017 - OilPrice_Com
5.Emerging Markets & Basic Materials Stocks Breaking Out Together - Rambus_Chartology
6.Global Currency Reserve At Risk - Jim_Willie_CB
7.Gold and Silver: Your Stomach Is Probably Wrenching Right Now - The_Gold_Report
8.Warning: The Fed Is Preparing to Crash the Financial System Again - Graham_Summers
9.Basic Materials and Commodities Analysis and Trend Forecasts - Rambus_Chartology
10.Discover Why A Major American Revolution Is Brewing - Harry_Dent
Last 7 days
North Korea Is Far From Being Irrational… It Has A Plan - 18th Aug 17
US Civil War - FUNCTIONAL ILLITERATES TRYING TO ERASE HISTORY - 18th Aug 17
Bitcoin Hits New All-Time High Over $4,400 As It Catches Paypal In Total Market Cap - 17th Aug 17
3 Psychological Ingredients behind Great Web Content - 17th Aug 17
The War on Cash - Rogoff, Orwell and Kafka - 17th Aug 17
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17
Gold Stocks Coiled Spring - 12th Aug 17
Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - 12th Aug 17
How to Alton Towers Half Price Discount Entry 2017 and 2018, Any Time, No Pre-Booking! - 12th Aug 17
Top 3 Technical Trading Tools Part 2: Relative Strength Index (RSI) - 11th Aug 17
What Makes Women Better Investors - 11th Aug 17
Crude Oil Price Precious Metals Link in August - 11th Aug 17
Influencer Marketing Predictions All Businesses Should Take Into Account - 11th Aug 17
Really Bad Ideas - Government Debt Isn’t Actually Debt - 10th Aug 17
Gold Sees Safe Haven Gains On Trump “Fire and Fury” Threat - 9th Aug 17
Why Is The Stock Market Not Trading On Fundamentals Lately? - 9th Aug 17
USD/CAD - Can We Trust This Breakout? - 9th Aug 17
New Monthly Rebate to Help Reduce Your Trading Costs - 9th Aug 17
Stock Market Divergences Are Now Appearing! - 9th Aug 17
Is Inflation an issue or did the Fed Mess Up? - 8th Aug 17
Top 3 Technical Trading Tools Part 1: Japanese Candlesticks - 8th Aug 17
Researchers Find $10 Billion Hidden Treasure In A Dead Volcano - 8th Aug 17
What Happened to Thousands of Sheffield's Street Trees 2017 - Fellings Documentary - 8th Aug 17
Solar, Bubble, Banks, War, and Legal Tender: Five Reasons Why You Should Buy Silver Now - 7th Aug 17
CRASH - If Some People Do It, Nothing Bad Happens, But If Everyone Does It, All Hell Breaks Loose - 7th Aug 17
Gold and Silver : The Battle for Control - 7th Aug 17
Precious Metals Sector is on Major Buy Signal - 7th Aug 17
Stock Market - Has Time Run Out? - 7th Aug 17
Get Ready for an Historic Upside Gold and Silver Run - 7th Aug 17
BOOM! Bitcoin Rockets To New All-Time High As Cryptocurrencies Surge Higher! - 7th Aug 17
U.S. Dollar: This Crash Signals the End - 6th Aug 17
Predicting The Price Of Gold Is A Fool’s Game - 6th Aug 17
Asda Sales Collapse and Profits Crash! UK Retailer Sector Crisis 2017 - 6th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

Euro-zone Debt Crisis is Back

Interest-Rates / Eurozone Debt Crisis Apr 15, 2013 - 10:41 AM GMT

By: Money_Morning

Interest-Rates

David Zeiler writes: The Eurozone debt crisis that was supposed to have blown over long ago instead has become more like an endless game of Whac-a-Mole, with both new and old problems popping up faster than European leaders can bop them.

As Europe's finance ministers gathered in Dublin today (Friday), they faced at least half a dozen major issues threatening the fiscal health of the Eurozone.


Although Europe's leaders, in concert with the International Monetary Fund (IMF), have succeeded in keeping a lid on each successive crisis over the past three years, that streak can't survive in the face of the new and old fiscal woes that have been peppering the Eurozone.

U.S. investors can't let those past successes deceive them into thinking the Eurozone is no longer a worry.

When the Eurozone debt crisis finally implodes - and sooner or later, it has to - it will hammer stock markets around the globe.

The Latest Eurozone Debt Crisis Whac-a-Moles
At the top of the list of problems facing the Eurozone is Cyprus. That one's far from over.

On Thursday, the Cypriot government confirmed that the cost of its bailout had risen from about $23 billion to $30 billion, and that it might have to sell most of its gold reserves to pay for its portion of the bailout.

And it will most assuredly get worse. The decimation of the Cypriot financial industry in the wake of its debt crisis will shave 12.5% to 15% from the tiny nation's economy over the next couple of years.

You can bet an impoverished Cyprus will need to beg the EU and IMF for table scraps often in the years ahead.

A court in Portugal, one of the original debt-plagued PIIGS (Portugal, Ireland, Italy, Greece and Spain), tossed out austerity measures that had been a required part of that country's $101 billion bailout in 2011.

Ironically, the EU finance ministers agreed in principle on Friday to give both Portugal and Ireland more time to pay back their bailout loans.

And earlier in the week, a report by the bailout coordinating troika (the European Commission, the IMF and the European Central Bank) said Portugal's lingering fiscal struggles eventually could force it to seek a second bailout.

A report released Tuesday by the Organization for Economic Co-operation and Development (OECD) said that Slovenia is facing a "severe banking crisis."

Another report by the European Commission said both Slovenia and Spain had "excessive" budget imbalances that could force them to pay fines of 0.1% of their economic output, in accordance with tough new EU budget surveillance rules.

Italy's political crisis remains unresolved as well, which will further delay needed labor market reforms. Meanwhile, Italy's debt-to-GDP ratio is expected to rise past last year's all-time high of 127% to 130.4% this year.

Finally, the EC report called out France - Europe's second-largest economy - saying that the economic reforms enacted so far would "not be sufficient to solve competitiveness issues."

The report added: "France's public-sector indebtedness represents a vulnerability, not only for the country itself, but also for the euro area as a whole."

Lack of Growth Guarantees Eurozone Debt Crisis Meltdown
The only thing that could prevent the Eurozone debt crisis from at some point imploding is economic growth, and that's not happening.

According to Eurostat, the GDP for the 17-nation Eurozone plunged 0.6% in the final quarter of 2012, a steeper drop than the 0.4% economists had expected and the worst decline since 2009, and the third consecutive decline.

The average unemployment rate across the Eurozone is at a staggering 12%, the highest since the creation of the economic bloc in 1995. The problem is far more acute in some countries; Spain, for instance, has an unemployment rate of 26.3%, and in Greece it's 26.4%.

And recent economic data indicates things are getting worse. Industrial production in Spain plunged 8.5% in February from a year earlier; in Italy it was down 3.8%.

While a healthy EU could prop up one or two struggling members, instead a handful of healthy countries are trying to prop up many struggling neighbors.

There's almost no chance the European debt crisis will be resolved without a major meltdown - it's just a question of when.

Money Morning Global Investing Strategist Martin Hutchinson said he expects the Eurozone economy to "stagnate," and suggested investors keep a watchful eye on it.

"For us as investors, the whole region is best avoided," Hutchinson said.

Source :http://moneymorning.com/2013/04/12/eurozone-debt-crisis-now-its-a-hopeless-game-of-whac-a-mole/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife