The Krugginator - about that suffering French economy.... Because everyone's so completely bought in to Aryan racist economic theory, he's got to point it out to us again:
This is the week we’re supposed to hear the ECB’s plan for monetary expansion; the German media are already howling, with Bild warning that Draghi’s expected actions will reduce the pressure for reform in “crisis-hit countries such as Spain, Greece, Italy, or France.” Above are European long-term interest rates as of close of business yesterday.
So, first of all, look at “crisis-hit” France; investors are so worried about France that they won’t hold its bonds unless offered, um, 0.64 percent, the lowest rate in history. But never mind — everyone knows that the French must be in crisis, because they still believe in social insurance, and besides, they’re French.
Notice also that crisis-hit Spain is now paying a lower interest rate than Britain. It’s surely a higher interest rate in real terms, because Spain faces the prospect of years of deflation. But this should — but won’t — put an end to all the talk about how low British rates are the reward for austerity, and so on.
The only crisis in the Eurozone is that Germany still refuses to do what it takes to balance money flows within the ECU, thus forcing internal devaluation in the periphery.
This is the neighbour you people picked, Europe.