EU drama

2012, EU problem is not gone, but going on.

I feel like to comment a bit on this article in January, yet I find myself short in time. (who doesn't? :P) Although there is some delays, I found it even more suitable to address this now.

Political contingency:
This NY times article pointed out some uncertainty ahead of on-going EU debt crisis, mostly from political perspectives. Greece will have election(April, 2012), France will have election(two-staged election, late April and early May). We shall never downplay the possible political shake-ups in EU regions. Troubled economy or not, people will cast their ballots to represent their feelings.

Does money float to where it is most needed?
Other news catches my eyes as well. ECB, as mentioned in this article, place Bazooka for confidence already. The ECB policy is clear: we support bank, bank support national governments by buying their debts. As for the private sector? will the bank open their pocket generously to companies? Not likely. The biggest independent refinery in Europe, Petroplus, filed bankruptcy last month. I still remember the Bloomberg news report on how banks are hardening their positions on companies. Given the economic condition now I would say the companies will have even tougher time in the years to come.

Having enough about public debt news? how about some private debt issues?
The overall private sector debts? nothing to be optimistic: This Reuters report today gives us some looks on the private debt/GDP ratio in Eurozone countries. We could skipped the troubled nations, since we all know they gotta perform poorly on that measure. Yet,  Sweden, Denmark, and the Netherlands are among countries that have private debt/GDP level above the 160% cutoff set by the Commission. Surprise!

So, keep Stanley Fisher's words in mind. Who is Stanley Fisher? The current governor of Israel Central bank. And the mentor of Fed Chairman Ben. Bernanke and also taught Mario Draghi, the ECB President.

Next two month will continue to be interesting.