Euro zone economy

After weak April and May numbers, I’ve been on the lookout for possible hints that euro zone economies may now be flattening.

Austerity tends to drive down demand which also causes deficits to increase to the point where they stabilize GDP.

Therefore, if the euro zone just leaves their fiscal policies alone at some point those automatic fiscal stabilizers work to prevent further declines.

Meanwhile, no euro zone banks have had liquidity cut off by the ECB, and it doesn’t look like any euro zone govt will be missing any payments any time soon, so govt deficit spending will continue to add income and ‘savings’ to their real economies.

French Consumer Confidence Stalls as Hollande Readies Budget

June 26 (Bloomberg) — French consumer confidence stalled as President Francois Hollande prepared tax increases and spending cuts to help reduce the nation’s budget deficit.

Household sentiment was unchanged at 90 in June, national statistics Insee said today in a release from Paris. Economists expected a reading of 89, according to the median of 14 estimates gathered by Bloomberg News.

Broadbent Says Indicators Suggest U.K. GDP Growth May Be Flat

June 26 (Bloomberg) — Bank of England policy maker Ben Broadbent said that indicators suggest the U.K. economy may be broadly flat in the next quarter or two.

“The near-term indicators suggest that, abstracting from the various short-term distortions (the effect of the Golden Jubilee holiday, for example), output is broadly flat in the next quarter or two, as it has been for the past 18 months,” he said in answers to a questionnaire from the U.K. Treasury Committee published today in London.

This entry was posted in EU, Government Spending, Politics. Bookmark the permalink.

6 Responses to Euro zone economy

  1. SteveK9 says:

    Don’t worry, they’ll start working on dismantling the ‘automatic stabilizers’ next.

    Reply

    WARREN MOSLER Reply:

    i do seriously worry about that.

    Reply

  2. Unforgiven says:

    Anon –

    “…the Spainish are looking at increasing their VAT to a flat 18%…”

    And on top of that, it’s leaving the country

    Courtesy of Angela Merkel’s “Mob Guarantee” program.

    Reply

    Anon Reply:

    Yep – default on your spending obligations to your own people in order to ensure foreign creditors are satisfied. Sad situation…

    Reply

  3. Anon says:

    I’m devastated to hear the Spainish are looking at increasing their VAT to a flat 18%, which involves increasing the rate on essentials like food from 4% to the 18%. The plan is being encouraged by the EU and IMF as necessary to reduce the budget deficit.

    Seems to me they are not learning…

    Reply

  4. pebird says:

    Mr. Broadbent (great name) should have said “The UK economy is flatlining.”

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>