Ring a Ring o’ Roses

Some geographical and economic clarifications from politicians, officials and commentators:

1. Spain is not Greece – Elena Salgado, Spanish Finance Minister, ~February, 2010.

2. Portugal is not Greece – The Economist, 22nd April, 2010.

3. Greece is not Ireland – George Papaconstantinou, Greek Finance Minister, 8th November 2010.

4. Spain is neither Ireland nor Portugal – Elena Salgado, Spanish Finance Minister, 16th November, 2010.

5. Neither Spain nor Portugal is Ireland – Angel Gurria, secretary-general of the Organization for Economic Cooperation and Development (OECD), 18th November, 2010.

6. Ireland is not Greece Vanessa Rossi, senior research fellow in international economics at Chatham House in London, 18th November, 2010.

Glad that’s straightened out. Still to be determined: whether Belgium is Belgium.

Concept via Eurointelligence.

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  1. Gregdx7

    That is hilarious!
    Unfortunately, the USA is still the USA. And Ben Bernanke is still Captain Edward John Smith.

      1. DownSouth

        You may have a crush on Elton John, but this is an economics blog, hardly the appropriate forum to express your repressed sexual fantasies about some gay rock star.

        I’m sure there are blogs out there where you could go and talk about your dysfunctional sex life, but this isn’t one of them.

  2. Edwardo

    And they are all, financially and economically speaking, very soft and squishy, much like rotten fruit that has been stepped on. I guess Ireland’s a banana, and the rest of them are…pick a fruit.

    1. mk


      Less offensive words have been created in the many languages of the galaxy, such as joojooflop, swut and Holy Zarquon’s Singing Fish.

      The use of bad language can have unforseen circumstances. One example is the war between the G’gugvunts and the Vl’hurgs, caused by a casual remark made by Arthur Dent being mistaken as a terrible insult.

      Simultaneous Babel Fish translation also means that any being can be rude to any other being without the need for extensive explanations. This has also started many wars.

      The reason the Earth has been shunned for so long is also due to a language problem. On Earth, Belgium refers to a small country. Throughout the rest of the galaxy, Belgium is the most unspeakably rude word there is.


  3. Mannwich

    And the uber-rich still don’t want to take their losses on too much debt that will never be repaid.

    And the Sheeple still won’t know what hit them when we do it for them collectively through collective “austeritization” that we are being conned into supporting.

  4. Diego Méndez

    That was funny, indeed :)

    You could also add some comments from the US right (or self-denominated centrists) about the US becoming Greece to round it up.

    Let’s hope we won’t hear in the near future this or that country is not Argentina…

    1. readerOfTeaLeaves

      Oh, I begin to strongly suspect that in joojooflop, “United States” is a coded phrasing of “Argentina”.

      Elton John is evidently a common phrase for the old Brit storyteller Shake Dat Spear in Babel Fish translation, which makes it so easy to understand how DownSouth got confused about. In both Babel Fish translation and joojooflip ‘Elton John’ references overly ripe, squishy fruit. It’s closest synonym is “Ireland”.

  5. Maju

    Facts (from BBC):

    Total debt as % GDP in Eurozone+UK countries:

    1. Italy: 115.8%
    2. Greece: 115.1%
    3. Belgium: 96.1%
    4. France: 77.6%
    5. Portugal: 76.8%
    6. Germany: 76.2%
    7. Malta: 69.1%
    8. UK: 68.1%
    9. Austria: 66.5%
    10. Ireland: 64%
    11. Netherlands: 60.9%
    12. Cyprus: 56.2%
    13. Spain: 53.2%
    14. Finland: 44%
    15. Slovenia: 35.9%
    16. Slovakia: 35.7%
    17. Luxembourg: 14.5%

    So I’d say that Spain is between Netherlands and Finland and Ireland is between Austria and Netherlands. Both are pretty well by this measure.

    Portugal is bad, just like France and Germany. While Greece and Italy are very bad… and Belgium is like Greece or Italy or almost as bad. So the question on whether Belgium is Belgium may end up having strange answers.

    However it is true that by budgetary deficit, Spain is among the worst performing countries, right after Ireland, Greece and the UK (which is not in the Eurozone).

    But what’s the issue with budget deficit? As long as it’s below taxation levels, it should be manageable, right?

    For a state like Spain or Greece it is that if you start cutting in the wrong end (i.e. anywhere that is not the military, corruption or too low taxes to hyper-rich businesspeople), you get the huge masses of unemployed without even the slightest state assistance. And that’s very bad for the stability of the system (not to mention the people).

    Cutting the budget from welfare where there is not even a decent welfare right now is a no-no. So what can a country like these do? Cut in the military (no troops to Afghanistan, no more purchases of whatever weapon they are buying to France or the USA), expand taxation and/or tackle corruption (expanding taxation would scare business and corruption is not that high anyhow). It can also sell assets but that’s only a temporary measure and most were already sold in the past decades of thoughtless privatization.

    Any other option is a direct way to Hell. And by Hell I do not just mean poverty and such but social and political disruption to extreme levels, because the state (and EU) will quickly become enemies of the people. This delegitimization automatically increases cheating and reduces taxation, what in turn increases the deficit and weakens the state even more.

    So, as someone totally uninterested in Spain doing well (I’m Basque, nationalist, and anyhow we have a separate taxation and budget system), I can only say to IMF and Brussels: keep it up, you will finally achieve that Spain collapses and breaks down in pieces. If you keep insisting in this path, you will also destroy Belgium, France and even Germany. Good job!

    1. Paul Repstock

      Maju; you are naive in the extreme. How big do you imagine the Basque enclave would be in the middle of a Corporate Euro Super State? I think it would be zero! The Basque would nolonger even have nuicance value. I suspect you would be rounded up with the Romney and the Muslims and any other “Undesirables”. I don’t think there would be another generation. JMO as always.

      These tribal viewpoints always devolve into narrow self interests leaving the elite gleefully rubbing there counting fingers. In this sorry ‘them and us world’, there is always a way to make it appear that the other party will suffer more. I love divide and conquer politics.

    2. eric anderson

      As for the merits of your general arguments, I haven’t a clue.

      But these debt figures are not total. They are government debt ratios.

      Total debt (gov’t, household, business, financial instutitions) to GDP (2009):

      Italy 315%
      Spain 366%
      France 323%
      Germany 285%
      Switzerland 313%


      The debt figures alone don’t really tell us much about the ability to service this debt, government or otherwise. But it is a staggering debt load on all these countries in a world of bursting bubbles. USA, too.

  6. EmilianoZ

    Yes, but pigs will be pigs.

    j/k, we all know who the real pigs are. They feed on bonuses. You can see them filling up their astronomical bellies at the government bailout trough.

  7. Michael Murphy CFA

    7. France is Screwed.

    It amazes me how France has stayed under the radar, when their banks are extremely exposed to PIIGS debt and their own economy is a model for profligacy. The citizens have already spoken on their willingness to undergo the necessary austerity: “Raise the retirement age from 60 to 62? Never!”

    It is no wonder Sarkozy pressures Merkel to bailout the PIIGS. He’s next. It should be the PFIIGS, as in “figs,” as in the leaf of the tree that is all they will be left with for clothing.

    As for Bernanke, his biggest flaw is that he thinks this is only a credit contraction recession, so he can fix it with credit expansion tools. He doesn’t realize that he is up against (1) a generational shift to the Gen Xers who got buried in student loans, and view credit very differently from the Baby Boomers, (2) the retirement of said Boomers, the pig in the python with the largest cohort turning 48 ( the year of peak consumption per Harry Dent) in 2005 – did something change after that? And (3) technology, which slashes prices every year (OMG – deflation!).

    SurviveTheGreatInflation.com the book launched this week – Bernanke isn’t going to change – given his history, he can’t – and Obama doesn’t have any idea how awful his appointments were. It’s inflation coming, not deflation. Don’t ever bet against the Fed, especially when they are determined to do something stupid.

    1. MyLessThanPrimeBeef

      To fight deflation with inflation – is that like fighting global warming with nuclear winter?

    1. Richard Kline

      My exact thought also. And since not, then no. . . . Our age is showing—and I can still hum the theme. And McShane has had a late career comeback too!

  8. Avg John

    If anyone has ever worked at a company in the process of going belly up, all of this “QE numero whatevers”, along with these bailouts and finger pointing should strike a bell with you.

    Company cash flows have deteriorated for an extended period, emergency loans have been depleted and external financing sources have dried up. Creditors obligations have already been kicked as far down the road as possible, vendors are threatening to stop delivery, the accounts payable department and accountants are no longer available by phone (out to lunch, sick, traveling), and meeting payroll and payroll taxes is practically the sole focus of company efforts.

    I think we are just about there folks, just on a much grander scale. Look for the creditors (China, Middle east)at the front door demanding payment soon.

    1. scraping_by

      “Look for the creditors (China, Middle east)at the front door demanding payment soon.”

      They’d better be quick. Inflation can be used as a cowardly default. “You want your 10 billion? Sure, just stand there while I go print them up.” Couldn’t happen to nicer people.

      With a little grit, like the French and Brits and Greeks in the street, a quick hard default might save something. But, no, the Fed and the ECB and the neoliberal lickspittles (Obama in the lead) will march over that high, high cliff.

      The world after that will probably include something like the new airport grope, only on a larger, nastier scale.

    1. Paul Repstock

      My opinion is that it is improper to be spamming your stuff all over Yves’ blog.

      Even if you are right….here does counterparty risk come into your ‘recomendation?? Hmmm?

  9. Doly

    Looking at who nobody is, the order of dominoes becomes clear:

    1. Greece
    2. Ireland
    3. Portugal
    4. Spain
    5. By now, all hell breaks loose in Europe

  10. Rodger Malcolm Mitchell

    Portugal, Italy, Ireland, Greece and Spain each have unique problems, but all of them are Monetarily Non-Sovereign, meaning they have one problem in common: Each cannot control its money supply.

    This means they do not have the power to pay large amounts of debt, and must rely on increased taxation and/or decreased spending in order to remain solvent.

    By contrast, nations such as the U.S., Canada, Australia, China and Japan are Monetarily Sovereign, and so have the unlimited power to service any size debt, and tax money does not support their spending.

    Rodger Malcolm Mitchell

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