Austerity is still the prevailing paradigm right across Europe

Today’s commentary
Summary: Despite Europe’s continual moving of the goalposts to give countries more breathing room, the economic paradigm in Europe is still the same: austerity. This will dampen growth in Europe for the foreseeable future and increase government debt to GDP ratios, making debt deflation and crisis a background threat which will eventually result in sovereign restructurings regardless of recovery. I expect Greece to be on the table in 2014.
A lot of hay has been made about the recovery in Europe despite its fragile beginnings. Certainly, I called for the recovery early because the second derivative numbers in Europe were improving. Nevertheless, we need to be cautious here because growth in and of itself does not mean recovery. And the term recovery itself does not nece...


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