{"id":59144,"date":"2021-08-28T10:42:00","date_gmt":"2021-08-28T15:42:00","guid":{"rendered":"https:\/\/olduvai.ca\/?p=59144"},"modified":"2021-08-28T10:42:00","modified_gmt":"2021-08-28T15:42:00","slug":"eurozone-finances-have-deteriorated","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=59144","title":{"rendered":"Eurozone finances have deteriorated"},"content":{"rendered":"<section class=\"research-article__hero \">\n<div class=\"research-article__hero__container _wrapper\">\n<div class=\"research-article__hero__content\">\n<h3 class=\"research-article__hero__content__heading quarto-h2\"><a href=\"http:\/\/Eurozone finances have deteriorated\">Eurozone finances have deteriorated<\/a><\/h3>\n<\/div>\n<\/div>\n<\/section>\n<div class=\"article _wrapper\">\n<article class=\"article__content\"><strong>Despite negative interest rates and money printing by the European Central Bank, which conveniently allowed all Eurozone member governments to fund themselves, having gone nowhere Eurozone nominal GDP is even lower than it was before the Lehman crisis.<\/strong><\/p>\n<p><strong>Then there is the question of bad debts, which have been mostly shovelled into the TARGET2 settlement system: otherwise, we would have seen some substantial bank failures by now.<\/strong><\/p>\n<p><strong>The Eurozone\u2019s largest banks are over-leveraged, and their share prices question their survival. Furthermore, these banks will have to contract their balance sheets to comply with the new Basel 4 regulations covering risk weighted assets, due to be introduced in January 2023.<\/strong><\/p>\n<p><strong>And lastly, we should consider the political and economic consequences of a collapse of the Eurosystem. It is likely to be triggered by US dollar interest rates rising, causing a global bear market in financial assets. The financial position of highly indebted Eurozone members will become rapidly untenable and the very existence of the euro, the glue that holds it all together, will be threatened.<\/strong><br \/>\n<strong>Introduction<\/strong><\/p>\n<p>Understandably perhaps, mainstream international economic comment has focused on prospects for the American economy, and those looking for guidance on European economic affairs have had to dig deeper. But since the Lehman crisis, the EU has stagnated relative to the US as the chart of annual GDP in Figure 1 shows.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.goldmoney.com\/images\/media\/Images\/Articles\/Eurozone6.png\" width=\"650\" height=\"422\" \/><br \/>\nClearly, like much of the commentary about it, the EU has been in the doldrums since 2008. There was a series of crises involving Greece, Cyprus, Italy, Portugal, and Spain. And the World Bank\u2019s database has removed the UK from the wider EU\u2019s GDP numbers before Brexit, so that has not contributed to the EU\u2019s underperformance&#8230;<br \/>\n\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/article>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Eurozone finances have deteriorated Despite negative interest rates and money printing by the European Central Bank, which conveniently allowed all Eurozone member governments to fund themselves, having gone nowhere Eurozone nominal GDP is even lower than it was before the Lehman crisis. Then there is the question of bad debts, which have been mostly shovelled [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[7772,233,281,282,285,5829,538],"class_list":["post-59144","post","type-post","status-publish","format-standard","hentry","category-economics","tag-alasdair-macleod","tag-ecb","tag-europe","tag-european-central-bank","tag-eurozone","tag-goldmoney","tag-money-printing"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59144","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=59144"}],"version-history":[{"count":0,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59144\/revisions"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=59144"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=59144"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=59144"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}