Wednesday, 15 May 2013

Over The Pond

Today the growth figures for Europe came out. What a mess, is the best description of what is going on.

The best news is that Germany received 0.1% growth in the last quarter, although they probably lost 0.2% from serve snow. Essentially it's not going well, the German economy has lost 1.4% growth in 1 year. The Germans should be a lot higher than this seeing as they're the biggest economy in Europe. The recession in  the rest of Europe is going to hit them hard, I wouldn't be surprised if they go into one as well.  

 The German economy narrowly missed recession today. That may not happen in the Future.

France entered its third recession today, which shows how well Hollande's policy of tax the people till 'they're bled white' (to quote Clemenceau) is going. The problem with the French economy is that it is very inefficient and has been so for a long time. Three hour lunch breaks and some of the strictest employment regulations in Europe says it all. There is very little work because of government intervention and no actual desire form the French people to knuckle down. They'll pay for this very hard, 10.6% unemployment is nowhere near the peak.

Hollande's vision of what makes a good economy is rather clouded. My advice is not to be so wet.

And what of the rest of Europe? Nine members of the Eurozone are in recession. Spain has 27% of its population unemployed. Recently Greece has been re-classified as an emerging economy in line with Botswana or Tibet. There is no hope within the Eurozone because countries are reluctant to overcome their inefficiencies which a single currency demands.

The ECB cannot really help much eithe,; earlier this year it lowered interest rates to 0.5%. That's fine if there is credit in a country but there is none in Europe at this moment because of the ongoing crisis. The wacky smash and grab policy of raiding people's savings will not help this problem. I'd watch out for a banking crisis in the next few years.

The European Economy is getting to a point where countries in Europe are doing worse than some in Third World Africa. 

How do we compare then. Well we have just better growth than Germany of 0.3%. We haven't had a recession since the days of Gordon Brown as the one last year was recently discovered to have never happened. The only way is up for the moment. Nor do we have the problems of a single currency or any of the financial controls placed upon us by being in the Euro. So I think we'll do fairly well compared to Europe in the next few years. This is in spite of having a trade policy that makes it so difficult to trade with anyone not on the continent. And Nick Clegg thinks Europe is the economic future, Greece can't even ship in medicine, most African states can. 

Comparatively the UK economy is doing well. Once we get over the hurdles of our debt we will be doing better than the rest of Europe.

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