Now that the USA have managed to agree to borrow a whole lot more money, the speculators have, once again, turned their attention to Europe.
As a result, yesterday, according to the reports, the borrowing of both Spain and Italy came under renewed pressure and their interest rates (for the government borrowing) went up a bit. Well, I know that isn’t quite right but it amounts to the same thing.
This, apparently, puts them in the same position as Portugal and Greece were in just before having to have a bailout. Let’s be honest, the markets are sure the Euro will fail or one or more countries will default on their debts – meaning that they can make a killing on betting that the Euro will, instead of being quite a strong currency, fail or fall dramatically.
Who gives a shit about the people who actually live and work there? It appears not these guys.
But, the people around me (well the few who talk to me about it) are convinced that, in spite of everything, Italy is perfectly safe. This is either crass stupidity or they’re really knowledgeable. One guy says that there won’t be any problem because the taxes will rise to pay for it and the Italians always pay up. Another said that, because of the uniqueness of the Italian mentality and the fact that they have so much in savings, the reality is that it won’t be a problem and that actually, Italy is in a much better position than Germany or France – with a better productivity than any other country – mainly because they don’t finish work at 5 p.m. but, rather, stay until 8 or 9.
Hmmmm.
For what it’s worth (which isn’t much) my opinion is that both Italy and Spain will be forced to ask for help being, as it is, more important that the speculators make their money from the fall or demotion of the Euro. Until one or more countries default on their debt, they won’t be happy.
Of course, the most sensible thing is to get rid of this model and try something different. But that will only be forced through by ‘the people’ who won’t do anything.
The people with money have the power and, whilst they have the power they will always have the money. Such is life.
In the meantime, the countdown is on until Spain and Italy are dragged into making a cry for help that is neither necessary nor prudent.
And for me it will mean that the belt must be tightened and luxuries will be forgone. Probably. Let’s see.