Chillin' out till it needs to be funded
Portugal led another slide even as LTRO funds keep the Euro debt firmly liquid and Italian PM Mario Monti poh poohs the crisis fears in Spain, with good data at Italy confirming his utility to the nation while Spain looks for this lull to establish a new “portal” or a more conventional “window of opportunity ” for more European funds. It seems unlikely when you hear it but no amounto f liquidity can stop Europe from hitting a deep recession in the next few months our own turnaround coming from the deepening troubles in German manufacturing and dull exports despite the lowest unemployment reports out of Deutschland for years at near 6.5%
Spanish Premier Mariano Rajoy acknowledged the problems after last week’s public demonstrations echoed public sector sentiment in the South but Spain also avered their DEbt to GDP ratio will hit 80% in just one year from 68% in 2011 two weeks after they got to redesign the compact eligible Budget plan with a 5.3% deficit target.
As lateas Feb 29, Spanish yields were riding below Italy but whil eItaly has stuck around at 5.15%, Spanish 10Y yields are up to 5.45% Greek economy is going to shricnk 5% this year, as the South has the same problems of correlating spending and saving masures to growth, the degrowth catchy enough despite the Compact while irish statistics tell another tale for the north int he same Fiscal Compact.