PIGS Keep Europe in an Economic Trough
THE HEAVILY debt-laden economies in the Eurozone are once again giving a bout of the collywobbles to politicians, economists and stock markets across the world.
Ireland’s economy is not growing fast enough to pay back its debts. Greece is dragging its feet over whether a total debt restructuring is needed, while talks have begun over Portugal’s own financial rescue package.
Political critics of massive bailouts in more prudent countries are gaining in strength while supporters of the Euro dream are hard pressed to counter their opponents’ arguments.
Just yesterday, the anti-Brussels, anti-bailout party in Finland called the True Finns captured 19% of the general election vote – up from nowhere last time, and may now have a say in whether Finland says yes to any future Portugal rescue plan. This may have significant repercussions in the Eurozone.
Talk in Europe as to whether we are truly getting out of the economic trough is turning downbeat again – not helped by what’s going on in the US either!
Today, S&P, the rating agency, has warned that its rating on US Govt debt may be downgraded from triple A if Republicans and Democrats don’t agree soon on ways to tackle the American budget deficit currently running at a whopping 1.5 trillion dollars in this fiscal year. President Obama himself has said that the world may be plunged back into recession if the ceiling on money the US can borrow is not raised within the next few weeks, when the current debt limit of $14.3 trillion is reached.
We are living in uncertain times, that’s for sure. I’m just hoping that in a couple of week’s time, the GDP figure for the first quarter of 2011 shows the UK to be back in positive territory after the disappointment of a negative growth figure in the last quarter of 2010. With all the jitters around at the moment, we could definitely do without another reversal here in the land of sterling!