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File under: heads they win, tails we lose… May 29, 2010

Posted by WorldbyStorm in Economy, European Politics, Irish Politics.
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Fitch Ratings cut Spain’s credit rating today, saying the government’s efforts to reduce debt will weigh on economic growth in the coming months – another blow to prime minister Jose Luis Rodriguez Zapatero’s efforts to shore up confidence in the state finances.
The ratings agency cut the country’s rating one notch from AAA to AA plus, saying Zapatero’s efforts to close the budget deficit “will materially reduce the rate of growth of the Spanish economy over the medium term”.
The ratings agency decision echoes concerns from economists that efforts to cut state debt will also withdraw stimulus from the economy and hinder growth. Lower growth in turn means gathering less in tax revenues. It comes after a similar move a month ago by fellow ratings agency Standard & Poor’s. The third main ratings agency, Moody’s, has kept Spain on its highest level so far.

Guess what Ireland’s rating is.

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1. yobbah - May 29, 2010

It’s below that of Spain’s isn’t it? We were told that cuts would please the markets so aren’t they pleased?

In any case, those Mediterranean types are complete basket cases while we have a wise, mature government able to face up to reality.

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2. ejh - May 29, 2010

Don’t worry, we too will shortly have a rightwing government dedicated to cutting everything that moves except corruption.

Maybe a good thing in some ways. Let the bastards who actually believe in cuts carry them out. (I don’t think I really believe this, though.)

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3. WorldbyStorm - May 29, 2010

Spot on yobbah.

ejh, neither do I.

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4. ejh - May 29, 2010

I suppose the reason I don’t is that if they do, and they’re not defeated when they do, it’s less likely that they’ll be voted out of office and more likely that the cuts will be accepted, people’s assumptions (and their politics) just shift to take account of it and everything just gets a lot nastier.

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WorldbyStorm - May 29, 2010

That would be precisely my fear. I’m really concerned that we just see that shift again and again and again to the point where who cares about provision of services…etc? I know I keep saying this, but this is by far the most reactionary moment I’ve experienced in my lifetime, the one where everything is being thrown rightward and where the forces opposing that are at their absolute weakest. We don’t even have the residual power of the unions (I’m talking about the global context, not the RoI specifically) or the social welfare compact of the 1970s…

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CMK - May 29, 2010

And to add to that we have FF back up to second in the latest Red C poll, according to Aertel. So, it appears that the message of “the medicine is working” may be having an effect. And if it’s having an effect the logical next step is to increase the dose, as we see with O’Cuiv’s latest initiative. You’re dead-on WbS this is a deeply reactionary time.

Will FF/Lab form the next government?

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WorldbyStorm - May 30, 2010

It’s possible. Although Labour are deeply antagonistic (in parts) to FF and might see it as binding a damaged entity to them. The only thing is I could actually see that as potentially more progressive than FG/LP.

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5. CMK - May 30, 2010

Good point. FF may, just may, be in a penitent mood after the next election and if they’re down to 50 or so seats they may feel hitching up with Labour as a better alternative than opposition. Dump Cowen; pick between Martin or D. Ahern and keep going. Compare that to the prospect of Varadkar, Bruton, Creighton et al being let loose….

The only possible saving grace might be the prospect of five or more lefties in the Dail. At least there’ll be real opposition.

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6. Pope Epopt - May 30, 2010

No amount of sacrifice will please those markets, it seems. Capricious gods indeed.

This sort of thing could lead to an epidemic of atheism.

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