Megan Greene: lo peor de la crisis del euro no ha pasado

Genevieve Signoret & Patrick Signoret

Megan Greene tiene una perspectiva pesimista no sólo por Grecia y España, sino para el supuesto caso exitoso de Irlanda. Prevé elecciones nuevas para Grecia este mismo año. Explica por qué OMT será sólo una ayuda temporal (Business Post via EconoMonitor.)

En Grecia, no espera que la coalición gobernante sobreviva más que unos cuantos meses.

The current plan of undergoing an internal devaluation is not politically or socially tenable. Public support for eurozone membership in Greece has fallen significantly since mid-2012, and will continue to do so when the government sucks another €9 billion out of the economy next year, as demanded by the troika.

Sharp divisions are emerging within the Greek coalition, and the government will do very well to survive the rest of 2012 intact. I expect the coalition will collapse over the next few months, and new elections will place a Syriza-led government in power.

Syriza is likely to stick to its promises of no more austerity and a debt moratorium, in which case the Greek government and the troika are likely to negotiate Greece’s exit from the euro, with the troika providing bridge financing to mitigate the blow for Greece. This could happen as early as the first half of next year.

Irlanda parece un caso exitoso en muchos sentidos. Pero:

But here’s the big problem in Ireland: there is no economic growth. While exports have remained buoyant, domestic demand continues to provide a drag on economic performance. Unemployment has stabilised at very high levels (around 14.7 per cent) and, as the government works out the details of yet another austerity budget, there are increasing signs of austerity fatigue.

I expect the Irish economy to contract by around 0.5 per cent this year, and stagnate next year. This is much more pessimistic than the government’s forecasts. Without growth, Ireland’s debt burden – quickly approaching 120 per cent of GDP – is clearly on an unsustainable path. While Ireland will have access to credit lines from the EU bailout funds, it will eventually have to write down its debt.

OMT ha calmado a los mercados. Pero Greene piensa que el efecto será transitorio.

A number of triggers could undermine investor confidence in the OMT. A Greek exit from the euro or Italian political parties campaigning on an anti-euro platform could worry investors.

More importantly, the OMT only really addresses the fiscal side of this crisis. All of the bond-buying done by the EU bailout funds and the ECB will take place against a backdrop of awful economic indicators, as Spain and Italy continue to retrench and implement structural reforms.

Finally, the EU bailout funds and the ECB are a double act, with the latter only buying bonds for countries that have submitted to the conditionality attached to the former. The EU bailout funds have a very clear lending ceiling of €500 billion and, as that ceiling is approached, investors will worry that, with no more bailout cash and therefore no more conditionality, the ECB will turn off the taps to troubled countries as well.

Once investor sentiment shifts and bond yields creep upwards, Spain will probably be pushed into a full troika programme. When the bailout cash runs out, we could see Spain unable to regain market access and pushed into a debt restructuring.