So, we had another crucial summit, on June 28-29, followed by another also crucial Eurogroup, on July 9. Like all the ones that preceded, and the ones that will follow, they were trumpeted as the final solution to eurozone woes. And as usual, these “final solutions” lasted days, if not hours.
I was tempted to comment immediately after, but I wanted to see the dust settle for once, so as to have more perspective. Did not work that way, though, as news kept piling up. But let’s look at what was agreed.
Istat, the Italian statistical office, just released its Quarterly non-financial accounts for the General Government. As were to be expected, deficit is spiraling out of control (8% on the first quarter, against 7% in 2011), because of higher borrowing costs, and because the economy is doing very poorly.
Two days ago they released the provisional unemployment figures for May: stable above 10% (youth unemployment is at 36.2%!).
It seems that we come full circle, robustly installed in a Recession-Deficit-Austerity-Recession-Deficit-and-so-on spiral.
Austerity works, right? Why on earth, should Italy aim for a balanced budget in 2013? Is this required by current European rules? No(t yet). Is this reassuring markets? No. Is this boosting private expenditure? No. Is this killing the Italian economy? Yes.
Ah, and if at least we did something for those spreads…