Visit Lobnek Wealth Management's web site

02 May, 2012

From bad to worse?

The austerity measures in Europe are starting to bite but not in the right way. As governments impose painful belt tightening measures, recent statistical figures  provided by Eurosat, are pointing to a further bloating (degradation) of debt to GDP for the majority of Euro zone members. That certainly does not bode well, considering that the objective of austerity in the first place was to reduce the debt, not increase it! It could be the result of growing deficits and very weak or negative growth. It could also be that there is a sort of lag effect at play and that, over the longer term, there will be a positive impact on the debt. If this the case, it necessitates time to work, or patience, a commodity that respective governments are rapidly running low on. Country after country, the authorities are switching to crisis mode as the public become more vocal regarding their displeasure on the way things are being handled. Union is giving way to nationalism and the harmony of the past is disappearing.
Europe is in trouble, that we know, but maybe more worrying are the signs that things may be getting worse.
Changes in govt debt to GDP ratio, Q311 - Q411 (Eurostat)

DISCLAIMER

This document has been produced purely for the purpose of information and does not therefore constitute an invitation to invest, nor an offer to buy or sell anything nor is it a contractual document of any sort. The opinions on this blog are those of the author which do not necessarily reflect the opinions of Lobnek Wealth Management. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the author. Contents subject to change without notice.