Spain Blames Italy’s Political Turmoil Their Economic Crisis!


I thought this was a bit of the “pot/kettle” sort of funny. 

For those who haven’t heard, Italy is having another one of its political messes…..again. 

ROME (AP) — Premier Mario Monti told the Italian president Saturday he is resigning soon, saying he can no longer govern after Silvio Berlusconi’s party withdrew crucial support. It paves the way for early elections a year after the unelected economist helped pull the country back from the brink of financial disaster.

Only hours earlier, Berlusconi announced he would run for a fourth term as premier, aiming for a dramatic comeback, considering the billionaire media baron quit in disgrace in November 2011.

Well, I’m not sure Italy has stepped completely away from the brink of financial disaster, but, they are in a slightly better position than they were a year ago. 

These events have and will reverberate for a moment in some markets.  Spain says this is going to hurt them.  And, to a point, it will.

MADRID (Reuters)Spain will suffer a contagion effect from Italy’s new political turmoil and the government continues to study the need for outside assistance, Spanish Economy Minister Luis de Guindos said on Monday.

Spain’s risk premium over Germany rose to 436 basis points on Monday after Italian Prime Minister Mario Monti announced he would resign and trigger early elections. The 10-year Spanish-German spread was up 20 basis points from Friday but still well below highs of over 650 bps hit in July.

“Every time there are doubts … for example today in the case of Italy, when there are uncertainties about the political stability of a neighboring country such as Italy, that immediately affects us,” de Guindos said in an interview with the Spanish state radio.

There’s only a couple of problems with these statements.  Spain’s politics aren’t exactly seas of tranquility.  Heck, over there they have an honest to goodness succession movement.  Further, this pretends that Spain’s economic condition occurred by happenstance.  Germany seemed to fair better regarding Italy’s turmoil.  It isn’t like Germany is on the other side of the world from Italy.  No, you’ll have to find a map yourself!

Anyway, I thought it was cute, in a sad and pathetic way.  So, I had to share.  Smile

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9 Responses to Spain Blames Italy’s Political Turmoil Their Economic Crisis!

  1. gator69 says:

    I was a student in 1975, and was in Barcelona for two weeks on a class trip. It was right after Franco’s death, and the communists were pushing hard for control. We could not leave the hotel at night, except to sneak down the alley, and in the back door of a restaurant for dinner in an upstairs room with no windows. In the morning we would find broken windows and bullet holes all through the shopping district, and the communists passing out their literature.

    Spain has not been stable for a very long time.

    • suyts says:

      Yeh, I had to laugh at the absurdity of Spain pointing to someone’s political instability.

    • philjourdan says:

      I almost ran into you! My senior class trip was to Majorca. But that was 74.

      But I was back in the states by the time Franco died (in time to see the inaugural season of SNL, where the breaking news was that there was no change in his condition – Francisco Franco is still dead).

  2. kelly liddle says:

    Hey it is the way to go. Obama blames Bush, my PM is getting ready to blame the world economy for not balancing a budget (this financial year is supposed to be a surplus). Number 1 rule in politics never admit responsability. There are exceptions of course but they are rare.

    • suyts says:

      Yeh, wouldn’t it be nice if we had a population who would accept human fallibility in their politicians and politicians who would admit to being uninformed dolts?

    • kelly liddle says:

      I think voters don’t like on balance their politicians to admit they are wrong. Whenever a politician admits they are wrong my opinion of them goes up but I think I am unusual in this sense.

    • suyts says:

      Exactly, the population is as much to blame as the politician. Just look at the hero worship many in this country have over Obama. If he got on stage today and stated what is obviously true, something akin to “the deficit problems we have is because we spend too much, not that we are not taxed enough”, then we would shrieks and screams from the people. They would consider it an act of betrayal rather than seeing this as something true and necessary to be articulated.

      • DirkH says:

        Don’t think so. People elected Obama because they’re stupid and they wanted a strong leader whom they could follow unthinkingly. When I first saw the famous blue-red-black Obama stylized portrait from the “obey” guy I thought it was a parody of Stalinist posters.
        But it wasn’t. People wanted their very own Stalin and got him. I could say Hitler as well, that’s no difference. But the art reminded me of Stalinist art.

      • suyts says:

        Hmm, Dirk, I think something is lost in translation. You said, “People elected Obama because they’re stupid and they wanted a strong leader whom they could follow unthinkingly.”

        That’s pretty much the meaning I was trying to convey.

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