The plot thickens again in the soap opera of the European Union. One day there is a $1.4 trillion bailout fund in place and the next day that deal is falling apart at the seams. One day Greece is on board with austerity measures and the next day they might be back to using the Greek Drachma. This Greek drama continues to get better by the minute.
Next there is Italy and Spain. Italian 10 year bond yields are now surging higher by more than 6.0 percent and this is even with the ECB buying bonds to keep the yields down. Italy is in complete disarray, last week they had their own version of the Ultimate Fighting Championship taking place in the Italian parliament. Spain on the other hand is sporting a hefty 21.5 percent unemployment rate and has more financial issues than can be addressed in this short article.
France behaves like the housewife that has a lot of money, however, the French bank stocks are telling us a different story. In fact, the French President Nicolas Sarkozy was actually pleading with the Chinese to help bailout the European Union last week. This housewife has some serious financial troubles that will likely surface in the next few episodes.
Portugal, Ireland, and Belgium all have their fair share of problems. Both Portugal, and Ireland, have been bailed out already, however, a second bailout should not be ruled out in the future. After all, Greece continues to get bailed out and seems to get more money whenever they want it. Belgium is still working on getting an official government, however, they are broken too.
Finally, we have Germany, the Germans are considered the most solvent of all the European Union nations at this time. While the Germans are the strongest nation in the EU it is important to note that their debt to gross domestic product ratio is about 80.0 percent. This housewife could easily be in financial trouble over the next few years. Oh well, Germany probably holds the cards at the moment in the friendly high stakes poker game.
Stay tuned as each and every day there will be more and more news and gossip coming out of Europe. This crisis will not be resolved anytime soon and should linger well into 2012.