The news that Italian bank Unicredit is insisting that Ireland rather than Italy is the ‘I’ in PIGS should hardly come as a surprise. All the PIIGS are at it these days: thus Emilio Botin of Santander is quoted in the FT as saying that “Comparing Spain to Greece is like comparing Real Madrid to Alcoyano”. (Alcoyano is apparently a club in the Spanish second division.) And we have been busily distancing ourselves from everyone else as well.
All this is understandable. As Ken Rogoff puts it,
There is an old joke about two men who are trapped by a lion in the jungle after a plane crash. When the first of them starts putting on his sneakers, the other asks why. The first answers: “I am getting ready to make a run for it.” But you cannot outrun a lion, says the other man, to which the first replies: “I don’t have to outrun the lion. I just have to outrun you.”
However, one of the big lessons of history is that lions rarely make do with just one snack: when defaults come, they come in waves. The 1930s is a good case in point.
Europe needs solidarity, not finger pointing.
15 replies on “Escaping the lion”
I hereby declare that from now on PIGS means
The old jokes are the best.
Nostalgia isn’t what it used to be. 🙂
Krugman’s going with pIIgs – Ireland and Italy
Now, if PJ Mara was around, he’d be dispatched to Princeton to give him a good talking to and keep us out of the acronyms.
Oh dear. Looks like the children and starting to fight with each other.
Now, what will the grown-ups do?
Will the ECB/EU come out before Monday and announce intent on issuing EU wide Bonds backed by the ECB?
The name calling, consistent with the inconsistency of statements from various finance ministers, is indicative of how deep this crisis really is.
The flow of credit has dried up. The Euro was badly constructed (deliberately so). The Germans had to be assured that they would not bail out “lazy” ……….. (enter your country of choice here).
“So, on this question, it is important to listen to eurozone political leaders, above all Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France, as well as Commission president José Manuel Barroso.
None of them is any doubt whatsoever that, if the worst happens, they will have to rescue Greece. As they see matters, the stability of one eurozone country is essential to the stability of all the others. As one high-level EU policymaker put it this week: “The EU has all the instruments to deal with the situation in Greece. We can do it, if the political will is there to do it.””
So which EU member will “step up to plate”?
Will the UK look kindly on being asked to contribute to a bailout of Greece with a general election coming in May.
You can kick the can down the road, but you better not run out of road.
I fully agree. It is high time for:
1. A European policy of solidarity with Greece.
2. A Global crack down on speculators.
Our government have been publicly undermining Greece for many months and no one in Ireland has shouted stop. It’s shameful.
“Our government have been publicly undermining Greece for many months and no one in Ireland has shouted stop. It’s shameful.”
Yes, the children are bickering.
Wait ’till Daddy comes home.
They’ll all get a good beating and be sent to bed for (?) ten years.
Living through Ireland’s nuclear winter has made me agree with much of what you say. We have seen the naked iron fist that is usually deeply covered. If anyone even referred to it in the past they were mocked as conspiracy theorists or extreme leftists. That’s because we all preferred not to think about it. I have to tell you that I have the same approach to what you say on a derivatives time bomb. I don’t want to think about a cascading global financial collapse. On top of everything else that has happened in this country it is just too much.
I have to hope that wiser people than our leaders in more powerful countries than our own ensure these financial WMDs are rendered completely harmless.
Not sure that Ireland has yet become familiar with your “nuclear winter”.
“That’s because we all preferred not to think about it.”
I’m not sure that you are correct on that Tony.
It is the nature of the human to “think”. Knowing this Bernays
Goebbels before him knew
that if you could keep the people “thinking” about what you want them to “think” or at least what you “didn’t want them to think” you could retain “power”.
Why is “Global Warming” so prevalent no?
Were all the scientists in 1780, 1940, 1950, 1960, 1970, 1980 & 1990 just plain stupid?
“That’s because we all preferred not to think about it.”
I’m not sure humans have much choice in preference. The mind must think. It is a slave to thought. The human has no preference about thinking. It must think or it is not human.
Apologies, I am deliberately taking you out of context to make point.
Point being that, yes, while we “believe” we have a preference about what we dwell upon (think) others know that eventually given enough gap in consciousness we will believe anything.
That, I believe, is why one should always be critical of one’s own thought. Of course we all fail. Another human attribute.
“derivatives time bomb”
I think I referred to it as the “Derivate Death Star”. It is inevitable that it will power up and be used. It also “thinks”. It cannot help itself.
Who is betting (that’s what it is) on a default in Greece (Ireland …. Lithuania…. Hungary…. blah blah blah).
Would they be the same banks that just got bailed out by the Citizen/Taxpayer?
It’s a Casino Tony. The Central Banks have lost control of the money supply. The Gangsters have it.
All $2 Quadrillion of it. And the regulators are happy. And Brian Cowen and Brian Lenihan are happy that a good chunk of it is regulated in Ireland. Why? To “create” 10,000 “jobs”? This is insanity. Ireland will become the bagholder for the collapse of the (Playboys of the) Western World. “God Save All Here”.
Here’s a little light music about “regulation”.
Who are the Police and who are the Thieves.
“I have to hope that wiser people than our leaders in more powerful countries than our own ensure these financial WMDs are rendered completely harmless.”
Much as I would like to think that there are wiser people or leaders (anywhere) I fear not.
The progenitors of derivatives project that they are playing a “Zero Sum Game”.
They just have to sell another one.
This has gone beyond common thieves.
This has gone beyond common fraudsters.
The derivative market is a sociopathic enterprise.
They are beyond redemption.
Putting “Capital at Risk” was never “Zero Sum” and never will be.
So let the IFSC become the Vegas of “Zero Sum” Europe.
We have the best regulators in the World.
Welcome to the Smart Economy.
Whilst Europe needs to stick together, a little competition always concentrates the mind.
Is Italy’s claim to be different to the rest of the PIIGS justified on the basis of their greater private wealth and lesser private indebtedness? Their thirty somethings deserve some reward for staying at home with mammy and putting their personal finances ahead of their sex-life.
We need to chain up and cage these financial cannibals, not keep on arguing in front of them over who they should eat and in what order. Suppose, as often happens, a wave of defaults occurs. Suppose our government has napalmed our cash mountain on the banks. Will it matter then if we are eaten first or fifth? It’s time to put an end to the cannibal feast – not squabble over who which course we will be served up under.
Why doesn’t the ECB let the Euro fall significantly – it’s what Britain and the US did to get out of their holes? For years the interest rate was too low in order to suit Germany. Now when the PIIGS are under speculative attack why don’t the ECB devalue? Instead the ECB and the EU are using the speculators as a weapon against them. This is outrageous. There must be 100 MILLION people in the PIIGS. It’s time their politicans met the ECB and the Commission and laid down the law.
Can I have fries with that?
“Who is betting (that’s what it is) on a default in Greece (Ireland …. Lithuania…. Hungary…. blah blah blah).
Would they be the same banks that just got bailed out by the Citizen/Taxpayer?”
I don’t know either but I wouldn’t be surprised if Irish banks covered by the guarantee are speculating against Greece. If so, it is only fitting given the reckless selfishness and total dishonour of our establishment. They remind me of a Spitting Image sketch in the eighties. A revolution occurs in Britain and Margaret Thatcher is about to be shot as husband Denis looks on. The leader of the firing squad asks Thatcher if she has any last requests: “Yes. Shoot Denis instead”.
There are also the SNAKE countries
Spain, Norway, Algeria, Kazakhstan, East Timor
I am trying to find what it is that links them. I am sure it is sneaky though.
Any chance Emilio Botin is actually familiar with the balance sheet of Real Madrid? Greece Inc must surely be in better shape.