With yields on Italy’s 10-year government debt rising sharply higher and beyond the seven-percent ceiling deemed unsustainable, Italy is running out of options in finding buyers for its debt. It is also running out of options as a sovereign nation.
The downward spiral of the Greek economy — and now likely that of Italy — has led to calls for the European Union to step in and prevent a total collapse. Portugal, Ireland, and Spain — the other three of the so-called PIIGS EU member-states — are enduring their own woes, such as downgrades of sovereign debt and corresponding jumps in the interest rates on government bonds. The cumulative effect — particularly if Italy does suffer a crisis serious enough to reduce its national credit rating to junk-bond status — will ripple throughout Europe and across the Atlantic.
With Greece’s Prime Minister George Papandreou agreeing to step down in order to secure more bailout funds from the ECB, attention turned immediately to Italy’s financial problems that dwarf those of Greece’s. The Greek PM’s decision now clears the way for an interim government to agree formally to the new austerity measures demanded by the European Union as a condition of receiving additional financing by the end of the month. Those funds are needed to pay Greece’s bills through January 2012.
Rosen Plevneliev managed a narrow victory in Bulgaria's recent presidential elections on a reform platform pledging to clean up the country's corruption-plagued government, one of the most notorious in Europe. On November 3, Plevneliev was certified as the official winner in Bulgaria’s presidential race. The President-elect immediately declared that the first thing he plans to do after assuming office is fire all Bulgarian diplomats abroad who have been exposed as former agents of the communist Committee of State Security (CSS).
The European Commission has requested information on patents from smartphone powerhouses Apple (makers of the immensely popular iPhone) and Samsung. While Apple is not itself a target of the EC’s patent protectors, it has been asked to voluntarily submit critical information regarding its use of 3G technology. Samsung, on the other hand, is being investigated.
Prime Minister George Papandreou’s surprise call for a referendum on the new austerity measures demanded by last week’s eurozone “deal” caught everyone off guard, including his own finance minister. Analysts immediately accused Papandreou of seeking political cover for the increasingly unpopular increased austerity measures to be imposed as a condition for the next insertion of funds from the International Monetary Fund (IMF) in two weeks. Knowing that citizens would likely vote against the measures if given the chance, the PM could then pass the blame for failure onto the citizens, leaving himself and his party, the Panhellenic Socialist Movement (PASOK), absolved from blame as the new measures failed.
This week the European Parliament awarded the annual Sakharov Prize for Freedom of Thought to key participants in the Arab Spring.
The five recipients were chosen “in recognition and support of their drive for freedom and human rights.” The five are described in a press release announcing the award as “representatives of the Arab people.”
If the decline in the Portuguese money supply for September is annualized, it will shrink by more than 20 percent, presaging more economic difficulties for a country already reeling from austerity measures imposed by the European Union. Measures of money supply are watched carefully by economists as a portent for economic behavior over the coming six to 12 months.
Following the Eurozone summit meeting in Brussels, European Council President Herman Van Rompuy announced the results of the late-night negotiations: "From a series of national debt crises, the situation was evolving into a systemic concern, threatening the stability of the Eurozone as a whole. This threat has been contained."