Daily commentary: On Spanish and Irish austerity

I had intended my commentary here to be on US interest rates but I have already written that (silver level) post. So I will refer you there. Instead, I will mention Europe again because the links are filled with European stories. I think the thread running through these posts is that Spain and Ireland are to continue cutting this year to make their targets and that this will suppress demand in those economies. The logical question then is whether the cuts will be enough to meet targets. If not, why not? What are the consequences of not meeting targets?

In Ireland, the government is conducting a fire sale. I have been saying for some time that the logical outcome of the problems in Ireland are the same as in Greece i.e. a wholesale giveaway of state assets to foreigners. Moreover, that l...


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