Europe Back To 19th Century Growth Rates
1
April, 2013
Long-term growth
conditions in Spain, Italy and France are as weak as they have been
(other than during wartime) in over a century.
The
chart below tells the story. As JPMorgan's Michael Cembalest notes,
while European sovereign debt spreads have rallied across the board,
European bank lending to households and businesses is still
declining, and the cost of small business loans in Italy and Spain is
higher than both real and nominal growth.
With ECB
policy now clearly useless given Europe's fragmentation,
and with Germany's
forward expectations rolling over,
it is hard to see how, absent wholesale devaluation and/or inflation
(or as Cembalest notes destruction & rebuilding), Europe will
recover from this.
No comments:
Post a Comment
Note: only a member of this blog may post a comment.