Thank Europe For Friday's Market Upheaval [View article]
It's highly unlikely the Jobs program will pass and the uber liberal NYT ran a piece today saying reductions in payroll taxes would not spur job growth as the math is not compelling. And the idea the program would be paid for by cuts is laughable as any cuts would be largely illusory and in future years, increasing the deficits and debt in the short term because of asymmetry between spending and savings.
As the author notes, the real problem is in Europe where Greece is not implementing measures approved by parliament in the face of widespread opposition to spending cuts and labor market reforms. Resultantly, there is now open talk about Greece leaving the euro area and fending for itself.
Wolfgang Schäuble, the German finance minister, said if Greece does not meet the conditions it agreed to, as assessed by monitors from the International Monetary Fund, European Central Bank and European Commission, then payments will stop. He then added, Greece would then need to determine how to access financial markets without help from the troika.
The prime minister of the Netherlands on Wednesday said that countries receiving aid should either cede control over their budgets or leave the euro zone. “Countries which are not prepared to be placed under administratorship can choose to use the possibility to leave the euro zone."
There are fissures all across Europe with little support for transfers to profligate and reluctant states. It's only a matter of time before Greece, and perhaps others, leave the zone. And when this happens the markets will shudder as the costs will be staggering.
Thank Europe For Friday's Market Upheaval [View article]
As the author notes, the real problem is in Europe where Greece is not implementing measures approved by parliament in the face of widespread opposition to spending cuts and labor market reforms. Resultantly, there is now open talk about Greece leaving the euro area and fending for itself.
Wolfgang Schäuble, the German finance minister, said if Greece does not meet the conditions it agreed to, as assessed by monitors from the International Monetary Fund, European Central Bank and European Commission, then payments will stop. He then added, Greece would then need to determine how to access financial markets without help from the troika.
The prime minister of the Netherlands on Wednesday said that countries receiving aid should either cede control over their budgets or leave the euro zone. “Countries which are not prepared to be placed under administratorship can choose to use the possibility to leave the euro zone."
There are fissures all across Europe with little support for transfers to profligate and reluctant states. It's only a matter of time before Greece, and perhaps others, leave the zone. And when this happens the markets will shudder as the costs will be staggering.