Your are contradicting yourself (bold statements). And you are even wrong with the whole statement. People already complained about rating agencies when their perditions were too good (Or at least when they found out that ratings were too good). And actually the result in rating Greece too good in previous years was more severe than the bad rating now.Originally Posted by Dreadnaught
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
The rating agencies always were crap. At the start of the EMU i never lent any credibility to the adjoining Pact. I assumed that the markets would discipline governments by pricing in fiscal (ir)responsability. I will admit that I did not follow Greek sovereign debt since 1999, but I am pretty appalled to learn that the idiots whose work is used to regulate the financial sector were doing a job that a monkey could have done better. No person with an ounce of common sense could have given Greece a rating significantly higher than junk.
Congratulations America
So much for the deluded notion that markets can monitor or regulate themselves, huh.
"The Market" isn't immature at all....they know perfectly well how they can use S & P, Moody's, and Fitch ratings to attract investors, public pension funds, sovereign wealth managers (think Iceland) and eventually create a SIFI that's TBTF. All the while using math quants new innovative financial "tools" to hedge both sides of the bet. Heads--they win and some others win, too. Tails--they still win, but others lose their shorts when the scheme falls apart.
Mostly it's tax payers who lose, and have to carry water for these bailed-out bums. They turn right around and give record-breaking bonii to executives (and traders) who drove their franchise into the ground, causing millions of people to lose their retirement nest egg. Then they stop lending to the tax payers who bailed them out, even low-risk reliable borrowers. Corporate welfare, crony capitalism, private profits with public losses.
That's ridiculous - do we really need more conspiracy theories about how various American groups - ranging from the NY DA to credit rating agencies - are trying to shift attention away from US problems? If I were an evil mastermind running the US, I'd have noted how eurozone worries have several times derailed the global recovery, materially hurting US growth... and stay away from it.
The rating agencies have problems, but most of their ratings are relatively close to reality. And while you're welcome to think we should replace them with something else in our government shorthand (e.g. pension fund investments and the like), you're going to have to have some sort of risk measure, and I don't see a better game in town.
I think there's a broader point here worth making. I believe that you assume the problem with coupling regulations about capital/investments to credit ratings has the problem that a downgrade means government-regulated funds unload the assets and there's no one else to pick up the slack, which means a credit downgrade has very bad effects on the market for a given security. I'd challenge that: if the private market thought these agencies were wrong about something, they'd scoop up an undervalued asset like hotcakes since it would be giving outsized yields, so the effect on the security's price would be pretty small. No, the reason these rating decreases has such a big effect on prices is not government regulations tied to the ratings, but rather because most of the market believes the concerns raised by the credit agency. They might be wrong on occasion, but clearly they're right often enough that the smart money listens most of the time.
But with an implicit financial transfer in the EMU, why shouldn't the rating agencies give Greece/etc. debt a good rating? Surely the eurozone can easily pay off such debt.BECAUSE and let's not forget this, if those rating agencies would have done a job any good we wouldn't be having this crisis in the first place, as we wouldn't have had Greek/Irish/Portugese bonds being priced as cheap as German bonds. People talk too easily about the shortcomings of the EMU, but they entirely overlook that the holy markets did not function AT ALL in setting realistic prices for sovereign debt of EMU countries. Rating agencies played a big role in that disfunctional market.
Regardless, it's not really relevant whether the rating agencies were right or not in a given case. What matters is that private markets believe them, which they wouldn't do if it didn't make them boatloads of money. If private markets believe them, then government rules about capital requirements or investment grade assets for a small slice of the market become pretty irrelevant.
Private markets don't necessarily believe them, but do know how to use them....to make boatloads of money. There's noting "irrelevant" about capital requirements (since it's related to leverage and solvency) or what's deemed "investment grade". AAA ratings get more than just a small slice of the market.
You don't need an evil mastermind if you have common interests.
So lets get another cool Google translation
"Bernd Schips: The Economist from 1993 to 2005 headed the Economic Research Centre of the ETH Zurich (KOF). Today he is Research Professor at the University of St. Gallen (FHS)."
"The crisis is an opportunity, an attack against the euro to go"
The European single currency would survive in spite of Greece and debt crisis, says economist Bernd Schips. Sharp criticism Schips at the UBS managers.
So far, the EU leaders in the crisis in Greece operate on the principle of hope: the Greeks out the prospect of new loans, although the country is broke. How long can this course still maintained?
With the relief efforts was begun about a year ago, came up as the markets doubted whether Greece would honor its debt service. The alternative was that Greece had completed a debt restructuring or debt-section. But then you had fear, the European financial system, such a shock would not stand up. With the help of Greece tried to avert a new crisis in the European financial sector.
What would have happened if we had left Greece in early fall 2010?
Assuming the financial system could bear the loss, nothing would have happened. We mistakenly confuse again the national debt of a country's € and the resulting possible default by the value of the euro. This has nothing whatsoever to do with each other. About the external value of the euro alone with the European Central Bank will decide its monetary policy.
So would it have been wiser to Greece to reschedule one year ago?
Yes. It would have been better if I had used the affected financial institutions in Europe under the arms and the previously communicated to the public to clear. . .
. . . but the Greeks would have been even dependent on foreign aid.
Of course, because if a country is insolvent, he has over the years no longer have access to capital markets. Also for the restructuring of its economy Greece would have needed help. But that would then run through the normal channels such as the EU's Structural and Cohesion Funds.
Should decide because the EU Heads of State and Government at their summit in Brussels today but another quick cut debt for Greece?
EU leaders have failed from the outset to make clear to the markets that they only want to help Greece in order to actually save the European financial system. This omission and the unspeakable cacophony of stakeholders in Brussels, Frankfurt, Berlin, Athens and elsewhere have greatly unsettled the markets. From an average debt at this point, I think, therefore, nothing. The politicians should rather make clear once again that the Greeks will only be helped if they make a contribution yourself. If they refuse, then they are broke.
How to Greece to repay its immense debt of approximately € 350 billion each?
In the short term of one to two years the country will pay a portion of its debt from privatization proceeds. It is crucial, however, to what extent it is possible to restructure the Greek economy, so clear away barriers to market entry and reduce subsidies. These structural reforms take time. If the duration of the necessary adjustment processes prove to be too long, a debt restructuring will be inevitable at some point. At least then there is the prospect that it comes at a time when the European banking system is recapitalized and can sustain the re-adjustments.
When might this time have come?
I am assuming that the Greeks used it this time with the privatization serious about getting paid the next credit tranche and the second aid package. When you consider that the structural measures do not intervene in the next three or four years, an orderly debt restructuring will be to avert any more.
Now, you believe that speculation is against the euro at a good part also staged in the background and different interests work against the euro.
Yes, absolutely. The U.S. was not so keen that the euro was on its way to become the second "global currency". The euro had begun to replace the U.S. dollar as global reserve and transaction currency. This, however, would have threatened the funding the U.S. current account deficits increases. For one must not forget: The U.S. debt is at least as dramatic as the Greek. The Americans live by the U.S. government bonds have a high rating and the rest of the world is willing to finance the purchase of American treasury bonds, the current account deficit.
They suspect an American conspiracy against the euro?
No. But it is certainly the case that we saw in the crisis in Greece a chance to drive an attack against the Euro. This has been tried again and again by the major U.S. rating agencies. Fitch, Moody's and Standard & Poor's have a market share of 95 percent. If one of these three sets anything in the world, the markets will react immediately nervous. It's striking that the highly indebted countries in Europe are thrown into a pot and they are threatening to lower the ratings, while it has left in the case of the USA in verbally and also in the UK so far nothing has happened.
The rating agencies act on behalf of the United States?
For the purposes of the United States or any case of loans to it in U.S. dollars. The problem of rating agencies has been known for years: they act not long ago in the interest of creditors, but can be paid by the borrowers. Therefore, it is for them at the moment all about, papers in U.S. dollars can appear more attractive and safer, than they actually are. And accordingly makes it bonds worm, which are denominated in euros.
To what extent does the speculation of other players such as banks and hedge funds against the euro play a role?
At the moment there is a little quieter on that front again. You have to see but clear: Foreign exchange trading is basically determined by the proprietary trading of financial institutions. He is due to only a small proportion of 5 to 6 percent on the exchange of goods and services. This means, however, that the foreign exchange departments of banks, if they have a story called, can cause price movements, where they will earn quite a bit. In this case, the story was simply that "the euro is weakening" because the European sovereign debt crisis. And this story in the beginning, only Greece was concerned, this is indeed the value of the euro area completely marginal. But the markets have followed the story against the euro, and there is enough market participants found that jumped on this train. Also, because no one has pointed out that the debt of U.S. federal states at least as dramatic as well as the overall situation of the United States is not very good. But this was not mentioned in this story.
In the foreign exchange markets but put 95 percent psychology, and only 5 percent of the real economy?
Yes, in the short term. In the longer term is translated by the realities. This is evident because the euro rate against the dollar has recovered.
They criticize So the banks and currency trading.
Criticize is the wrong word. I've just described, the role of banks and foreign exchange departments for the development of exchange rates. A currency trader has initially the task of making money, in which he focuses on the appreciation or depreciation of certain currencies. The only question is how banks should behave if the market creates uncertainty about the development of the euro and investors flee, for example in the Swiss franc. Then it is not particularly helpful when Swiss banks advise investors to remain invested in the euro, and exaggerate the story further debt.
You would have expected from the Swiss banks that they are holding back to avoid an excessive appreciation of the franc.
They could have made at least point out that the Swiss capital market is relatively limited, which means that large currency risks. You could also point out that the traditional long-term interest rate bonus and purchasing power parity rather speak again for a stronger euro. That would be the mission of the National Bank and commercial banks have been. The latter have done the opposite and recommended investors: Out of the €, purely in the Swiss franc.
From short-term profit expectations and at the expense of the real economy?
Exactly. Although they deny it. But even so, UBS boasts the world to be the second largest foreign exchange trader. Since they can not steal as easily off the hook.
You would have expected from the men's Kaspar Villiger and Oswald Grübel more responsibility?
I would certainly expect, yes.
As long as this keeps the pressure of the Swiss economy was strong franc?
There are industries such as tourism, have really struggled with the strong franc. In the industrial and commercial applications, however it looks different. Where Switzerland has had over the years in terms of producer prices, great benefits. The National Bank publishes a real exchange rate based on consumer prices. Based on producer prices, so when one considers the advances in productivity and lower import prices for primary products, the appreciation is not as great as it now appears at first glance. That is why the Swiss company in the export are still so successful.
Would you recommend nor support measures?
No, there is simply no truly clean options: They can subsidize certain sectors - tourism, for example. But here, for example, would be not to tax - at the moment it is 4 per cent - effectively passed on to customers? Do you really? When they then lowered the VAT rate for tourism in half, that's not even arrived at the customer.
They fear windfall profits?
Exactly the same time the basic problem of tourism is not addressed. This is in the high consumer price level in Switzerland.
What happens next? The Swiss franc is an end in sight?
Personally, I had earlier expected a recovery in the euro against the Swiss franc. Then came again and again but the conflicting signals from leading European politicians, who have again caused a new uncertainty.
They were hoping that the panic quickly sets?
That it tends to be in periods of uncertainty in financial markets leads to a strengthening of the franc is in itself an old story. That they failed is now against the euro and the dollar so much that is new. It can only be explained by the long duration of this uncertainty and loss of confidence, fueled by individuals knowingly and unknowingly was fueled by some.
Is this the Achilles heel of the euro, that Europe speaks with one voice for our own currency as the U.S. for the dollar?
This is crucial. This is the central problem. For a new study by the European Central Bank just shows that the economic differences between the states in the U.S. are at least as large as those between the Member States in the euro area. The argument could not work the euro because of the currency area is not optimal does not sting.
How will the crisis? Is it the Euro or in ten years?
Yeah, sure, you can assume. The euro remains.
See you as a result of the crisis increased integration into the EU?
Yes, it will be inevitable. Therefore, it was already tightened the Stability Pact. And in the longer term there will be nothing else but that fiscal policy is either more centralized or introduce much stricter rules for debt relief measures in the case. Also placed your: The European Stability Mechanism (EMS) from 2013 looks much sharper in front of sanctions - though not automatic, but that will come with time, too.
http://translate.google.ch/translate...753536&act=url
Last edited by earthJoker; 07-12-2011 at 04:20 PM.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
That's a problem. No one has given an explanation of why there aren't european rating agencies to compete with the basic three.
Google translator failed big time, Joker.
Well nobody for the private marked established one, for whatever reasons - and it seemed the EU didn't found it to be so crucial that the government has to establish one.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
I turned the important part into italic and corrected the biggest mistakes in that part. I don't want to correct the whole thing.Google translator failed big time, Joker.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
It's okay, no worries. It can be pieced together. None of the English speakers here could do very well in a second language forum. Not nearly as well as the German, Dutch, or Finnish speakers manage here.
I have to admit, if I were not so lazy I would be able to do better. Translating the whole article by myself is just too much.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
But it isn't in the interests of the US to downgrade Greek debt or force a default! That's naive thinking, as is the conspiracy theory in your linked interview. Let's take it point by point:
First, US public debt is among the lowest in the developed world; hardly as 'dramatic' as the Greek. Secondly, the reason the euro hasn't caught on has a lot more to do with weak centralized fiscal policy and opaque monetary policy rather than some 'attack' on the euro as a reserve currency.Now, you believe that speculation is against the euro at a good part also staged in the background and different interests work against the euro.
Yes, absolutely. The U.S. was not so keen that the euro was on its way to become the second "global currency". The euro had begun to replace the U.S. dollar as global reserve and transaction currency. This, however, would have threatened the funding the U.S. current account deficits increases. For one must not forget: The U.S. debt is at least as dramatic as the Greek. The Americans live by the U.S. government bonds have a high rating and the rest of the world is willing to finance the purchase of American treasury bonds, the current account deficit.
I love how he denies he thinks there's a conspiracy, and then goes ahead and suggests there's a conspiracy. The reason why rating agencies haven't downgraded US and UK debt is the same reason Japanese debt hasn't been downgraded, or any number of other heavily indebted developed nations. It's because they're in far better shape than Greece.They suspect an American conspiracy against the euro?
No. But it is certainly the case that we saw in the crisis in Greece a chance to drive an attack against the Euro. This has been tried again and again by the major U.S. rating agencies. Fitch, Moody's and Standard & Poor's have a market share of 95 percent. If one of these three sets anything in the world, the markets will react immediately nervous. It's striking that the highly indebted countries in Europe are thrown into a pot and they are threatening to lower the ratings, while it has left in the case of the USA in verbally and also in the UK so far nothing has happened.
I suspect there's some translation difficulties here, but having dollar-denominated assets hardly means there's a conspiracy to attack the euro. I don't deny the US (and the US dollar) has a particularly special place in the global economy right now, for a number of reasons. But this isn't the result of collusion, or some concerted attempt to attack other potential reserve currencies.The rating agencies act on behalf of the United States?
For the purposes of the United States or any case of loans to it in U.S. dollars. The problem of rating agencies has been known for years: they act not long ago in the interest of creditors, but can be paid by the borrowers. Therefore, it is for them at the moment all about, papers in U.S. dollars can appear more attractive and safer, than they actually are. And accordingly makes it bonds worm, which are denominated in euros.
Really Wiggin? You don't see anything fishy if Italy comes in the line of fire before the UK? I don't know which planet you're living on, but the real life Italy is set to being close to a balanced budget in little under two years and as we speak already has one of the lowest budget deficits of the EU. Quite unlike the situation in the UK where the deficit is one of the highest in the EU and where the sovereign debt is set to grow significantly over the next few years. Italy has no problems that should make the markets accutely worried about its ability to pay back its debt (actually, those markets should start worrying about Italy no longer issuing new debt soon, as in other than rolling over old debts).
Also, we all can see the glaring truth that the US is digging a hole deeper every day, with a political deadlock that may lead to default in weeks, and yet the rating agencies are giving it a full AAA rating. Who are they trying to fool? The risk that the debt ceiling is NOT raised is a real one Wiggin, it's not
just something that could only happen in a parallel world. If you see how rigorously such possiblities are factored in for EMU countries, there is no way one can understand how lax they are with the US.
Your believe in 'the market' and rating agencies is of a kind that belongs in the pre-financial crisis times, but today is of a naivete that's gobsmacking.
Congratulations America
Deficit != Debt, and Italy's debt-to-GDP is the real concern in an anemic growth environment. And some economies are more equal than others.
As for the chances of US default, I still think they're nil. So does the market - prices on Treasuries haven't budged. The fact of the matter is that Greece/Portugal/Ireland physically can't pay off their debts, while countries like the US absolutely can; it's just a question of political will. And normally when push comes to shove, Congress does get their act together, albeit at the last minute. Italy is sorta in-between; they have high debt levels and an inefficient and weak economy, but their budget management in the last few years has been vaguely palatable (I believe deficits in 2010 were ~5% of GDP, and they have just put out a very small austerity plan). I think Italian default is a remote chance, but certainly higher than richer countries with less overall debt (i.e. the US, UK, Germany, France, etc.).
Really? Even for you that is remarkably blasé.
Italian debt:GDP is 118%, whereas in the UK it is 76%
It's funny how by thinking like that you turn a blind eye to the fact that the rating agencies ignore the actual crisis in the US debt situation whereas any hint of anything less than perfect unity in the EMU gets punished by downgrades.
There is no reason whatsoever anyway for an investor to think that the US will really be good for the money as the country consistently has devalued itself out of its debt. That also never got factored into the 'mint' rating of the country.
And PUHLEEZE ... your lecturing about how deficit is not debt. I am not so stupid that I would confuse the two. What I was pointing out is that there is nothing accute to the Italian debt position that justifies the panic about its ability to honour its obligations. The chances of an Italian default are as far in the future as those of a default of the US (if they raise the debt ceiling in a meaningful way before august).
@Randblad; sigh. The Italian debt is high but not rising. The UK debt is jumping up, in combination with a deficit that is NOT under control. Your 76% looks horrifying if you put it next to the figure for 2007, when it was 43%. A detached observer would place the risk of buying UK debt higher than the risk of buying Italian debt.
Last edited by Hazir; 07-12-2011 at 11:29 PM.
Congratulations America
There is no US 'debt crisis', there's just a political crisis. The debt is fine. Obviously if deficits stay at current rates, there will be a problem in the future, but that's being aggressively addressed (IMO too aggressively, actually). And the EMU was given a lot of leeway for years assuming things would be managed adequately, but when push came to shove it was clear that there was zero fiscal coordination, so the debt of troublesome countries was reevaluated.
When has the US devalued itself out of debt? US debt started getting hefty in the 80s, and in the last 30 years, US inflation has been remarkably well controlled by the Fed.There is no reason whatsoever anyway for an investor to think that the US will really be good for the money as the country consistently has devalued itself out of its debt. That also never got factored into the 'mint' rating of the country.
Uhm, no. The whole point is that having 120% debt-to-GDP doesn't give you much room to maneuver in the event of a crisis - say, a financial crisis that screws up your banks and credit markets, persistently high unemployment, and awful growth prospects. All of these will do bad things to your debt levels, and if you're already maxing out what you can reasonably pay without crushing austerity, you're a greater risk for default.And PUHLEEZE ... your lecturing about how deficit is not debt. I am not so stupid that I would confuse the two. What I was pointing out is that there is nothing accute to the Italian debt position that justifies the panic about its ability to honour its obligations. The chances of an Italian default are as far in the future as those of a default of the US (if they raise the debt ceiling in a meaningful way before august).
Italian debt is rising; deficits as a proportion of GDP are higher than growth rates. They've done pretty decently on cutting their deficit from truly ridiculous levels, but that was because they had no choice.@Randblad; sigh. The Italian debt is high but not rising. The UK debt is jumping up, in combination with a deficit that is NOT under control. Your 76% looks horrifying if you put it next to the figure for 2007, when it was 43%. A detached observer would place the risk of buying UK debt higher than the risk of buying Italian debt.
Here you're making your typical flaw. What the markets need to see isn't "unity in the EMU" its a solution. The EMU is putting up too much of a united front if anything, which is precisely why Greece got treated like Germany in the first place and why Greece is now infecting everyone else.
The US has never defaulted on a debt ever in its entire history.There is no reason whatsoever anyway for an investor to think that the US will really be good for the money as the country consistently has devalued itself out of its debt. That also never got factored into the 'mint' rating of the country.
Yes there is. They have far more debt to start with and still have a deficit.And PUHLEEZE ... your lecturing about how deficit is not debt. I am not so stupid that I would confuse the two. What I was pointing out is that there is nothing accute to the Italian debt position that justifies the panic about its ability to honour its obligations. The chances of an Italian default are as far in the future as those of a default of the US (if they raise the debt ceiling in a meaningful way before august).
Actually it is rising. Italian deficit is over 3% this year, which is less than its anaemic growth rate has been in a very long time. In addition fears over Italy were sparked in no small part by reasonable fears that the austerity plans (weak as they are) that Italy is introducing will not happen. Not just due to protests but because of comments made by none other than Berlusconi himself. When Berlusconi is questioning whether they'll go through is it a surprise that others are asking the same question?@Randblad; sigh. The Italian debt is high but not rising. The UK debt is jumping up, in combination with a deficit that is NOT under control. Your 76% looks horrifying if you put it next to the figure for 2007, when it was 43%. A detached observer would place the risk of buying UK debt higher than the risk of buying Italian debt.
The UK deficit was awful and unforgiveable. I despise Brown for the damage he did to our nation, but he's gone. The country (as I said for years here and at the other place) at the last election chose to elect a government that is committed to austerity. Despite wistful soundbites from a few dinosaurs there are not even any serious protests let alone serious talk of the austerity plans being rejected here.
What is this madness that credit agencies are some kind of Zio-American conspiracy? Just a few months ago a credit agency threatened to downgrade US debt and our stock market fell by 5% in a day. The credit agencies have similarly told US politicians that they consider a temporary "strategic default" (IE stop paying out debts in August if we need more time to discuss a long-term plan) still constitutes a technical default in their eyes.
The reality is that some countries have developed truly awful debt situations and are being called-out on it.
For those who wish the ratings agencies had been even more vocal about this a decade ago, there would be another half ten years ago claiming the credit raters were meddling in politics or restraining social spending.
I've said this too, but apparently it's not entirely true. I was listening to a piece on NPR; apparently the US technically defaulted on a few hundred million dollars back in 1979 because, well, the Treasury had some technical problems (not either a lack of money or a lack of political will). So it technically counts as a default, but everyone got paid fairly quickly, and business eventually got back to usual. There does seem to have been a transient increase in yields as a result of this mini-default, though.
</digression>
I said common interests, not that they talk to each other behind closed doors (which IMO must be the case before you can talk about a conspiracy). I stay to what I said until they actually put the US to an AA rating and not just talk about it.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
I'm curious - why do you think the US should be given an AA credit rating?
Political incapability of deficit-reduction.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
All evidence to the contrary?
Well you say that there is no chance that there is no agreement, but others disagree. An AA1 or AA+ rating is still a high grade, it would just include that minimal chance of a non-agreement.
On the other hand, is makes absolutely no sense to downgrading countries that actually took measurements already.
"Wer Visionen hat, sollte zum Arzt gehen." - Helmut Schmidt
Actually it is quite funny to see how Americans (and Randblade, but he's just the fool that blurts out every now and then about things he doesn't understand) get extremely defensive if it is pointed out that American rating agencies and the American government may have interests that have more than a little bit in common.
Congratulations America
And here we go again, we judge the US on past performance (past performance if you ignore an actual default and inflating yourself out of debt) and EMU countries on the basis of scepsis about the future. Stunning how you manage to miss the difference.
Last edited by Hazir; 07-13-2011 at 08:06 AM.
Congratulations America
Patent nonsense as usual; the core of the problem is that part of the EMU members want the tax-payers to bear the burden of the Greek situation and part of them want banks to bear part of the burden. There is no unity on the NEW bail-out package which actually should have very little bearing on the situation right now, as its results would be many months off.
Not, it's just consistently being ignored. Which has got everything to do with the ability of the US to inflate itself out of its debt, which of course also is a default by another mechanism. Something that quite interesting also isn't reflected in the rating for US sovereign debt. The inconvenient truths.The US has never defaulted on a debt ever in its entire history.
I see you read British newspapers, bravo, now try to learn something from the tripe you read. Italy's problems are far in the future, Britains problems are very accute and there is no way of telling if it can get the growth of its debt under control (where is its banking sector in 6 months from now, would have to be a serious point of concern. Will the government - again - attempt to save them?). Is the Cameron government capable of cutting the immense 10+% deficit? Very questionable. And then of course we could throw in the usual Keynesian argument of years of stagnation that you and Wiggin love to use for Italy. If Italy has to fear stagnation because of its limited needs for cutting back an already small deficit, why don't you throw it in the face of your own country?Yes there is. They have far more debt to start with and still have a deficit.
Actually it is rising. Italian deficit is over 3% this year, which is less than its anaemic growth rate has been in a very long time. In addition fears over Italy were sparked in no small part by reasonable fears that the austerity plans (weak as they are) that Italy is introducing will not happen. Not just due to protests but because of comments made by none other than Berlusconi himself. When Berlusconi is questioning whether they'll go through is it a surprise that others are asking the same question?Bla bla, it is totally irrelevant who caused your problems, the problems are real today. It's also rather easy to point to the difference in public unrest in Greece, where actual people have experienced job losses and cuts in income 10% and bigger and the UK, where such cuts are still over the horizon. I remember you lot had pretty bad riots not so long ago about student fees.The UK deficit was awful and unforgiveable. I despise Brown for the damage he did to our nation, but he's gone. The country (as I said for years here and at the other place) at the last election chose to elect a government that is committed to austerity. Despite wistful soundbites from a few dinosaurs there are not even any serious protests let alone serious talk of the austerity plans being rejected here.
Congratulations America
Not all countries are called out in quite the same way; inflation capital US is getting the velvet glove treatment, whereas the EMU members are getting an excessively harsh treatment. Greece definately deserves junk status, but Portugal? The last downgrading for that country was outright ridiculous.
Congratulations America
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