They can’t always get what they want
July 18, 2012 1 Comment
It seems to me that whilst The Rolling Stones are getting satisfaction after 50 years of hard slog, Eurozone ministers are finding after a considerably less period of time “they can’t always get what they want” and the crisis rumbles on.
With the recently discussed bailout for Spain of around 100 billion euros and the immediately agreed 30 billion euros to help restore confidence in the Spanish banking system hopes were strong for the euro. However as we know nothing is free in life and Spain has had to reassure the EU that they can raise additional revenue so they increased VAT from 18% to 21% and of course further spending cuts are on the cards. With long term bond yields suffering in both Spain and Italy and the threat of Greece seeking new terms for their bailout confidence unfortunately in the zone is at the moment very low.
The UK cannot escape concern particularly with the LIBOR scandal still ongoing and the launch of the Funding for banks, it now remains to be seen if the banks will pass on this money to its clients and in doing so at what rate! One piece of good news for the UK however was the UK trade balance was lifted by exports and the trade deficit fell for the first time in 4 months.
The rest of the world also has many concerns, pace of growth in China and lets not forget the US where weaker global growth is starting to take its toll, watch out this week for results from many of the multi nationals, poor results could open up a can of worms.