Hard hitting global and local news
Expect Strikes and Protests to Spread to Italy; Another Look at Why Italy Will Exit the Eurozone Before Spain Anti-euro sentiment in Italy is already very strong and about to get stronger. Eurointellihence has some interesting comments today regarding Italy. The demonstrations and protests [in Spain] are very likely now to spread to Italy.
Ambrose Evans-Pritchard has the details in his Telegraph piece, Spanish debt crisis returns as Germany nears bailout fatigue “Demand for Spanish paper is collapsing, even for shorter-dated debt which is very worrying and raises the spectre of Spain losing market access,†said Nicholas Spiro from Spiro Sovereign Strategy. Marchel Alexandrovich from Jefferies Fixed Income said the markets are already bracing for second bigger rescue of around €400bn. “A few more weeks like this and Madrid is going to decide to it has nothing more to lose and call for a full sovereign bail-out,†he said.
Please see Target2 and the ELA (Emergency Liquidity Assistance) program; Reader From Europe Asks "Can You Please Explain Target2?" for a more compete description. There is much misinformation floating around on how Target 2 works, what Germany’s liabilities are, so please click on the above link if you are interested in target 2 balances. The following chart from PIMCO article TARGET2: A Channel for Europe’s Capital Flight shows the capital flight through March
Link: Voters From Both Parties Overwhelmingly Support Big Defense Cuts
The medicine is killing the patient. Increasing the dose is madness. Greece outside the Eurozone may well provide an inspiration for Spain, Portugal, and many other countries.
