Two weeks ago I told you that Spanish Prime Minister Mariano Rajoy’s humiliating defeat to Merkel had narrowed options to sovereign bailout, monetisation or default for Spain. Now that the Spanish bank bailout is unraveling and Catalonia is threatening secession, I want to revisit this theme. I believe the basic conclusions are the same but I want to update you with my thinking given the most recent events.
The boom in the periphery and bust in the core
Let me give you a roundhouse review of how we got here. During the euro's first decade, Germany, and to a lesser degree the Netherlands, were mired in slow-growth economic slumps. The slump in Germany, the euro zone's economic center, was especially severe in the wake of a property and capital spending binge after reunification that left a ...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.