Tag Archives: Margallo

It is nice to get your thoughts confirmed. So, my ego was taking a nice leap forward when I saw how ministers all over Europe agree with my views on blogs I had written in the last few months. Foreign ministers Margallo from Spain and Westerwelle from Germany as well as French Minister Moscovici from France voiced pretty much literally the issues I had on several finance issues plaguing debt driven Europe. The Italian election is not as much a solution as it has now become an issue of less trust and security then before the elections.

So, it is nice that they agree however, the issue I have is that the Italian population seems to ignore that THEIR predicament comes from massive irresponsible spending. The other part is that Germany, when needed did tighten the belt and therefore they are now in such a strong state. Other nations are still fighting with issue they have (like the Netherlands). This is not because they are not doing anything, but because, from my humble opinion, they started too late, and as such they are now in this ‘mess’. They still have more issues to come. As they reflected that 2014 would bring a 1.1% increase, my thoughts are nowhere near that optimistic. I cannot vow on the issue that they are wrong, yet, over positive thinking is a hampering Anvil for them. I would think that if they could pull of a 0.3% positive growth in 2014, then that might be nothing less than a decent miracle.

Whether they get this through ‘clever’ bookkeeping is to be seen. Even in the most optimistic events. This means that the Trade ministry would need to get their International options like in Qatar and Bahrain. This would definitely help towards the 0.3% growth but not the 1.1%. In addition, the issues currently plaguing the gas winnings in the state of Groningen could hamper income for the Dutch government. They reported over 11 billion euro revenue from gas. However, as areas in Groningen were disturbed by Quake’s that seem to grow in intensity due to the method of extracting, could have two effects. First it is not inconceivable that revenue from Gas might fall below 10 billion, as well as the fact that damages from these quakes mean that payments well into the millions would be added as costs. In addition, there have been newscasts that current events are NOT events the current industry buildings are protected against, so not limiting gas extractions could have far fetching consequences. Not just to the revenue, but also to an area with culture and architecture that is quite unique to that nation.

The final straw is the involvement of the RABO bank in the LIBOR scandal. They have been given a penitent company donation of 330 million Euro. Even though they are not state owned like the SNS, there will be consequences. The first one would be whether Moody will adjust the bank even further. It was downgraded in June 2012 from AAA to AA2. Will the fine as well as the implication of lessened revenue and profit (as resulted from the LIBOR effect) mean this bank is downgraded even further? That part I do not, and do not claim to know, but it stands to reason that additional drops in government donations (read paid taxes) will dwindle a little. All these facts mean that the target of 3% budget deficit is not likely to be achievable. This links of course to the issues in Italy. As they miss their targets we are now with 2 players who become a question mark and Italy being number 3 on the ranking list of Europe, THAT impact will be a prominent one.

This European cart which is in definition pulled by the current two champion stags (France and Germany) will only slow them down too, meaning that a strong European economy (or at least less debt driven) is not likely to become a reality before 2016. If I had any faith in my predictions (remember, I am not an economist), then I would speculate that 2014 will be Europe’s hardest year. Not because of the economy as it gets through 2013, but because the drag from 2011 through to 2014 will have exhausted both people and companies to the brink of collapse (of financial exhaustion). For those thinking that I am so far of the mark, consider the greying population and the issues they are already in a group that cannot make ends meet in January 2013. The issue here is that this is not limited to places like the Netherlands and Spain. A fear of clear shortage is also hitting France, Italy and Germany. It will be hit on both sides of the equation. On one side, there is a clear danger that less money can be paid towards pensioners and stronger on the other side is the ever increasing cost of living. Whether it is because of food, Electricity and/or gas/fuel prices. Retiring before 2018 does not seem to be a healthy option, and NO guarantees are forthcoming any day soon.