By John Ward
In Spain, unpaid bills, public company debt, and Spanish sovereign bonds amount to 870 billion euros. More disturbing still – I’ve posted about this before many times – is the degree to which Spain’s social insurance budget is also deep in hock. The social security reserve fund is where the Spanish are supposed to be accumulating resources to help pay for their pensions. But this is the last thing they’re doing.
According to this btand new report from the fund managers, at the end of 2010 the fund had assets valued at just under 65 billion Euros under its charge. Of this sum, 56.6 billion Euros (or over 5% of GDP) were invested in Spanish government bonds, while 7.8 billion Euros were invested in bonds of other EU states.
So in short, the entire Spanish pension budget is invested in junk eurobonds. Oh dear.
Hat-tip to Spaineconomy blogpost for quantification of the problem alleged by Slog Madrid contacts for some ten months past.
Meanwhile, the dependence of the Portuguese banking system on the European Central Bank rose to a record high in March, as banks took advantage of easier borrowing conditions.
Greece’s industrial production fell sharply in February, pointing to a further contraction of the country’s recession-ravaged economy. The Hellenic Statistical Authority, also known as Elstat, said that industrial production fell 8.3% on the year.
In Italy, industrial production in January 2012 fell 2.5%. So too did its foreign trade balance, producing a deficit of €4.4 billion…over twice that of the previous month. And the unemployment rate zoomed to 9.6%.
But if you thought it was all bad news among the ClubMeds, never mind: the news is terrible in France.
Despite attempts by Sarkozy to position the ClubMeds as backward spendthrifts, the story in France appears also to be one of fiscal incontinence and a rapid decline in its manufacturing base. The past decade has been miserable for France’s industry, and over 355,000 production jobs have disappeared during Sarko’s Presidency.
While the French President has promised several times to slash France’s welfare spend and uncompetitive worker guarantees, the financial burden of the country’s infamous “social model” remains pretty much in place. Infrastructural largesse in particular (about which the Slog has posted for years) seems to be largely untouched.
The person who presided over this lack of touch, by the way, was none other than the IMF’s Queen of Austere Stimulation, Christine Lagarde.
The eurozone looks less and less like a game of two halves as the months pass: more often now it looks like a game of end to end stuff – viz, a crock from everywhere. But whatever happens, one thing is guaranteed: in the light of these data, next week will be a big one for bollocks in the eurozone.
