Calida 471

Page 1

ISSUE 471

COSTA calida

29 MAR - 4 APR

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EUROZONE TURMOIL current system breaks. At the time several eurozone member states including Greece, Portugal, Ireland, Spain and Cyprus were unable to repay or refinance their government debt. They were bailed out through assistance of third parties including Eurozone countries, the ECB, and the International Monetary Fund. But Spain, Italy, Greece and Portugal are racking up debts they will never be able to pay off. Spain’s Target2 liabilities are €328billion, almost 30 per cent of GDP. And Portugal’s and Greece’s liabilities are both at €72billion. The Banca d’Italia alone now owes

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a record €364billion to the ECB - 22 per cent of GDP. Simon Derrick from investment company BNY Mellon said: “Alarm bells are starting to ring again. “Our flow data is picking up serious capital flight into German safehaven assets. “It feels like the build-up to the eurozone crisis in 2011.” Fuller Treacy Money analyst David Fuller said the latest figures are a major issue. The firm publishes data on global capital markets. In a note to investors he said: “Those whom the gods wish to destroy, they first make mad, including driving them into the EU. “It will be a rude awakening for political Remainers, from the House of Lords to Scottish Nationalists. “It is hard to see how the breakup of the EU could not be disruptive, not least because it is the last outcome that many people have expected. “They bought into the concept of an EU gravy train, without questioning the flawed economics of this reckless experiment. “This will be the focus of many books and university economics courses for decades to come.

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EURO states owe the European Central Bank (ECB) a staggering €1trillion as they teeter on the verge of bankruptcy amid warnings a debt bubble is on the horizon. Analysts condemned the “flawed economics of this reckless [EU] experiment” and said the ECB faces a rude awakening as states crumble under the burden of debt. Market conditions in Eurozone are showing signs of a return to the conditions that sparked the 2011 European debt crisis which first reared its head in 2009. The ECB uses a system called Target2 to assess levels of debt and the bank’s data appears to show it is only a matter of time before the

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