Dr. Oliver Marc Hartwich 11.11.2011 21:47 +Feedback
Europe’s social failure
Capital markets are not loquacious storytellers. They condense the world into simple numbers. For this reason, the surge in Greek, Italian and Spanish bond yields could be mistaken for a mere technicality, a simple recalibration between the forces of demand and supply that happens in markets every day.
But these are no ordinary times. Through bond yields, credit spreads and bets on government defaults, capital markets are delivering the clearest possible verdict on the grand European experiment of social democracy.
Italy now needs to pay more than 7 per cent interest on its long-term borrowing, which means investors no longer believe that the country has a future in its present state. They doubt Italy can return from the brink of bankruptcy after wrecking its public finances through decades of overspending and over-borrowing.
Politicians and intellectuals still refuse to understand what is easily discernible on the cold-hearted trading floors of the world’s bond markets: The European social model, the romantic idea of an omnipotent and omni-responsible state, has passed its use-by date.
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Kategorie(n): Inland Ausland Wirtschaft