Our Beloved Leader, the politician par excellence, speaks out.
Astonishingly, since our summit the cost of borrowing has increased again for a number of euro area countries. I say astonishingly, because all macro economic fundamentals point in the opposite direction. It cannot be stressed enough that Greece is in a unique situation, not comparable to that of the other eurozone countries. Italy will generate a primary surplus in 2011 and, with the additional austerity package just adopted will have a balanced budget in 2014. Spain has a low debt stock around 70%, below the EU and the euro area average, and has taken courageous measures to reduce its deficit and boost growth. In all these cases, the current market assessment of risks are totally out of line with the fundamentals and it is ludicrous that CDS-rankings put these countries in the top tier of default risk countries.
When markets disagree with politicians it’s the markets that are wrong. Thus speaks the true politician.
A quite breathtakingly ignorant politician too.
Take Italy’s primary surplus: that’s actually a danger sign for default. For it’s only when you’ve got both a primary surplus and a large historical debt that it makes economic sense to default upon the historical debt.
How did we get such an ignorant man as the bureaucratic leader of a continent? And what can we do to get rid of him?