The Greek economic ‘tragoidia’ continues as Greece maintains its course of continue negative growth lasting five years now. It is incredible that a member state of the European Union can spend 5 years in a vehement recessionary state, ultimately undermining the purpose and existence of the European Union.
The Greek economy was set the impossible task of reigning in debt to a level where Austerity has squeezed the economy dry. Politicians in Greece are desperately appealing to the EU to give them grace on Austerity targets which are virtually unobtainable, especially as the economic cycle is working against them. With large amounts on the population having been employed in the government, a cut in Austerity has pushed unemployment up to almost 23%. This means that the spending power of the economy has dramatically fallen as many have little propensity to spend based on fear or a lack of income. As the economy shrinks as a result, the government have less ways to collect revenue to balance out Austerity measures. In essence, Greece can’t win and its worrying that the EU know that and don’t appear to be bother, or worse still, they can’t see that.
The effect of the Eurozone today hit Japan hard, who posted negative GDP figures based on the lack of global demand, in particular from the EU which has been one of its biggest ‘clients.’ Japan has struggled with the YEN becoming increasingly popular in risk adverse markets, the effect of which is being felt now. I can’t feel too sorry for them; the Central Bank has threatened action but hardly followed through. Talking about Central Banks, we find out what the Bank of England is likely to do next this week.
I honestly thought we would have a ‘Euro-free’ day… (JKM)