The eurozone crisis: Back with a vengeance?

posted at 5:21 pm on April 12, 2013 by Erika Johnsen

Not that it ever left, of course, but things do seem to be going especially poorly lately. Greece’s unemployment rate rose to a new record high of over 27 percent (ouch), multiple countries are struggling to meet their budget targets, and the troubles just keep coming in from all sides:

Europe’s finance ministers meeting in Dublin on Friday are facing a renewed crisis on multiple fronts,with a backlash against austerity acting as a gloomy backdrop for negotiations over bailout extensions for Portugal and Ireland, while tackling Cyprus’s botched bailout and growing worries about Slovenia.

Investors, increasingly aware of the euro zone’s disarray, will be closely watching the results of that meeting.

On Thursday, Cyprus confirmed that the cost of its troika-initiated bailout had surged to 23 billion euros ($30 billion) from 17.5 billion euros, further jeopardizing its moribund economy. It has also confirmed that it may have to sell most of its gold reserves to raise about 400 million euros to finance its part of the bailout. …

Slovenia’s leaders are trying to avoid requesting financial aid and the onerous terms those loans are likely to come with. Earlier this week, the Organization for Economic Cooperation and Development (OECD) said the central European economy risks a “deep recession” and a “severe banking crisis.”

And the euro-leaders did end up giving Ireland and Portugal some leniency in paying back their bailout loans, with the supposed idea of easing the burdens on their respective economies and bringing them back toward financial sustainability:

The decision to extend the loan repayment schedules for Ireland and Portugal was backed Friday afternoon by the finance ministers of all 27 EU countries. Irish Finance Minister Michael Noonan said the approval was “a very positive development and marks another significant step on Ireland’s and Portugal’s journey to a full and sustainable return to the markets.”

Ireland holds the six-month rotating presidency of the European Union, and the ministers are meeting in historic Dublin Castle, once the seat of the country’s English overlords and, later, of the Irish government itself.

The repayment extensions are intended to ease financial pressure on the countries, helping them resume long-term bond sales when their bailout loans run dry. Ireland’s loans run out later this year; Portugal’s in 2014.

Er, I hate to be the pessimist here, but why am I not infused with confidence? One of the main reasons the eurozone is even in this mess is because so many of their respective governments have demonstrated themselves incapable of paying of their debts. How much longer can all of this financial reshuffling sans substantive problem-solving go on avoiding the mega-meltdown?


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The great dame was wrong – Britain wasn’t worth fighting for.

Schadenfreude on April 12, 2013 at 5:25 PM

Just one symbol

Schadenfreude on April 12, 2013 at 5:26 PM

How much longer can all of this financial reshuffling sans substantive problem-solving go on avoiding the mega-meltdown?

til germany runs out of money???

cmsinaz on April 12, 2013 at 5:29 PM

Europe is doomed.

Unfortunately the US is too…because this admin. and the stupid R enablers emulate all which is bad in Europe.

Schadenfreude on April 12, 2013 at 5:30 PM

One of the main reasons the eurozone is even in this mess is because so many of their respective governments have demonstrated themselves incapable of paying of their debts. How much longer can all of this financial reshuffling sans substantive problem-solving go on avoiding the mega-meltdown?

Hmm, reminds me of another country, can’t quite put my finger on it, ummm… first name starts with “Uncle”, and… last initial is “Sam”, I believe.

Midas on April 12, 2013 at 5:32 PM

Germany realized in peace what it could never do in war.

All the socialist/communist theoreticians hailed from there…while they lived the lives of 1%rs.

Schadenfreude on April 12, 2013 at 5:32 PM

What isn’t understandable is how the Eurozone, and by extension even our own economy, can deal with the inherent idiocy of low productivity, low savings, low output economies being mashed together in some fake kind of quasi-national arrangement (without common history, institutions or civic arrangements) with their polar opposites in a single currency. It isn’t working and it can’t work, and the citizens of the Mediterranean countries (Cypress, Greece, Italy, Spain, Portugal) and the whole of Central Europe are becoming sort of slaves to the European Central Bank..

MTF on April 12, 2013 at 5:34 PM

The EU and Eurozone models are unsustainable. Yet this is the direction into which Obama and his cult followers are steering this country.

WhatSlushfund on April 12, 2013 at 5:43 PM

The swine in DC

Schadenfreude on April 12, 2013 at 5:43 PM

Europe is doomed.

Unfortunately the US is too…because this admin. and the stupid R enablers emulate all which is bad in Europe.

Schadenfreude on April 12, 2013 at 5:30 PM

To every thing there is a season, and a time to every purpose under the heaven:

A time to be born, and a time to die; a time to plant, and a time to pluck up that which is planted;

A time to kill, and a time to heal; a time to break down, and a time to build up

DFCtomm on April 12, 2013 at 5:49 PM

I was in Ireland two weeks ago and if the people I talked to are indication, they don’t want any part of the EU.

Can’t blame them.

Bob's Kid on April 12, 2013 at 5:56 PM

Nothing new to see here……move along.

dddave on April 12, 2013 at 5:57 PM

It isn’t working and it can’t work, and the citizens of the Mediterranean countries (Cypress, Greece, Italy, Spain, Portugal) and the whole of Central Europe are becoming sort of slaves to the European Central Bank..

Well, MFT, I can’t say tat I’ve ever heard of an unemployed slave

krome on April 12, 2013 at 5:58 PM

How much longer can all of this financial reshuffling sans substantive problem-solving go on avoiding the mega-meltdown?

The banking system is the mechanism that provides all the governments of the Western World their ability to spend debt. They will sacrifice us all to the banks to keep the cycle going just a little longer, but not to save the banks as most think, but instead to save themselves.

DFCtomm on April 12, 2013 at 6:00 PM

Slovenia’s leaders are trying to avoid requesting financial aid and the onerous terms those loans are likely to come with.

I can tell you with pinpoint accuracy when Slovenia’s crisis comes to a head. In June, a day after Mrs. Nomad and I arrive on vacation. We somehow seem to have that ability. Two years ago, we arrived in London just as the austerity riots began.

Last year, we went up into Michigan via Detroit so there could have been riots, a financial crisis, or a plague of locusts- who could tell if that wasn’t normal.

Happy Nomad on April 12, 2013 at 6:04 PM

I CANNOT believe that adding an extra and very expensive layer of government has not worked out well.

jukin3 on April 12, 2013 at 6:10 PM

I CANNOT believe that adding an extra and very expensive layer of government has not worked out well.

jukin3 on April 12, 2013 at 6:10 PM

Depends on who you are. It worked out pretty well for the bureaucrats.

The reality is that a common currency looks good on paper. The reality, which includes all cultural differences, cultural history, and economic strength paints a different story. Had the original rules about membership been followed, there would have been no problem but few member nations. The ink wasn’t even dry on the charter documents before the rules were beginning to bend. This is the result.

Happy Nomad on April 12, 2013 at 6:24 PM

The eurozone is already dead. It’s a zombie looking for others to eat.

ROCnPhilly on April 12, 2013 at 6:32 PM

I know my European Sales have really gone south over the last year or so.

trigon on April 12, 2013 at 7:03 PM

Debt sucks. Who knew?

WryTrvllr on April 12, 2013 at 7:09 PM

Er, I hate to be the pessimist here, but why am I not infused with confidence?

Erika, I put you down as a rather neutral observer. Some of us including Thatcher as quoted yesterday in a post here in HotAir thought the Eurozone was a loser when it was being formed.

burt on April 12, 2013 at 7:12 PM

Erika, I put you down as a rather neutral observer. Some of us including Thatcher as quoted yesterday in a post here in HotAir thought the Eurozone was a loser when it was being formed.

burt on April 12, 2013 at 7:12 PM

Hell I was still a CHILD at the time and I said “the place that had two world wars and a lot more little wars before that is gonna be all lovey-dovey and use the same money? Yeah RIGHT!”

The entire notion reeked of libtard idealism from stem to stern.

MelonCollie on April 12, 2013 at 9:46 PM

Er, I hate to be the pessimist here, but why am I not infused with confidence? One of the main reasons the eurozone is even in this mess is because so many of their respective governments have demonstrated themselves incapable of paying of their debts. How much longer can all of this financial reshuffling sans substantive problem-solving go on avoiding the mega-meltdown?

Enjoy life while you can. We have maybe two or three years (at best) and then everything will come crashing down. At this point, it is inevitable.

Theophile on April 12, 2013 at 10:34 PM

Greece’s unemployment rate rose to a new record high of over 27 percent

They could get that figure down to a feel-good 8% if they calculated unemployment like we do here in the US.

RADIOONE on April 13, 2013 at 6:12 AM

The best part about Cyprus is that it was an off-shore safe-haven for Red Mafia types. Bet they got their money out of there before the crisis hit because, you know, a few of them got a stranglehold on natural gas pipelines going to Europe. Oil too, come to think of it. Wonder where they moved their money to the last couple of years?

The EU decided to treat Greece, Italy, Spain and Portugal like they were Germany. Gave them the credit rating of Germany.

Makes you wonder what the Germans will do to get their credit rating back?

And we know that Putin had at least one money laundering operation going on in Germany with SPAG… have to wonder if he has a few others, as well? He’s been pretty good friends with the metals and oil based mafia, not so much the natural gas mafia organization, but two out of three ain’t bad.

Ah, the EU. If Germany doesn’t own you then, sadly, the Russians will have to step in.

Its for your own good, you know?

Poor children just don’t know how to run anything.

The Red Mafia does far better than these governments do.

They would be a step UP, now, wouldn’t they?

Just takes a little crisis to get the secret police, or whatever they are called, in control. A good strong man. Willing to lie, cheat and steal for ‘the good of the country’. Isn’t the EU lucky to have a guy like Putin sending them oil and natural gas? What happens when the money runs out? Well that oil and gas have to be paid for, you know?

Nudge, nudge. Wink, wink.

Just some real estate.

Cyprus, maybe. Greece, too. Portugal, too. Nice warm water ports, all of them. Mmmmmm…. Russia. Warm water ports. Debt crisis. Money running out. Heating, lighting. Real estate.

A match made someplace far away from heaven, that’s for sure.

ajacksonian on April 13, 2013 at 7:49 AM