In case the US guys haven't heard (yet), Catalonia in Spain voted to break away. Why does this matter?
- Accounts for ~20% of Spanish GDP.
- One of the wealthiest regions in Spain.
- Will cause Spanish Sov. Debt:GDP to jump approx. 30% overnight if allowed to go through without military intervention (Spain calling it unconstitutional right now.)
- Could lead to Spanish civil war.
- Either way is bad for the EU: If they are allowed to leave, could tilt the EU into a state of crisis like they previously had post Fin. Crisis. If forced to stay, and they will need to be forced (approx. 90% of pop voted to sever ties with Spain), will end up ripping the facade off of the EU being a 'democratic' institution.
- Spanish bond yields slowly climbing on the back of default risk. Italian bond yields being dragged along for the ride (for now).
Tanks probably going to suppress Catalonian in the same manner as the USSR put down the Hungarian Uprising. If they continue on this path, blood will flow.
Anyone betting against the US Dollar is going to get crushed as capital flows out of Europe in the same manner as it did during WW2 and seeks a safe haven in the US. The USD will strengthen. Bad for US Balance of Trade.
Other EU happenings:
- Germany still without an elected govt. Merkel currently trying to form a coalition between the German equivalent of the Libertarian Party and the Green Party in the US. Probably won't happen- if it does it will still paralyze parliament. If the 2nd largest party, the socialist SPD, form a coalition with Merkel then the right wing party AfD (now third) have a privileged position in the Bundestag and a much bigger voice as the lead opposition party
- Dutch govt. still without a coalition, and thus, without elected political power.
Both of these regions might hold snap elections again at any moment. If they do not the voters will hold them to account or may have to drag them out of office before they relinquish power (at least one German politician has already said this about Merkel.)
- UK Brexit still a big question mark. The UK Prime Minister seems to be content with kicking the can down the road, but again, will be held to account on this. Approx. 70% of Britons do not agree with the manner in which the EU has handled the negotiations and views them as using bully tactics to try and force the UK into submission- this is now increasingly evident on both sides of the Brexit vote. I suspect, but cannot confirm, that if the UK held a 2nd referendum on it today, even more people would vote to leave.
- France has the least populist leader for some time. Currently Macron's ratings are crashing faster than Trump (about twice as fast).
- Italian elections coming up in March 2018. Catalonian ref. will only add fuel to the fire where that is concerned.
Keep an eye in upcoming events. Europe is really falling apart at the seams. Might see tanks moving into Catalonia within the next couple months. A major cache of NATO arms went missing recently in Portugal ([
www.bbc.com]) a few months ago. In the manifest, there was enough C4 to re-enact the end scene of Fight Club. If that surfaces in Catalonia it will be a mess.
Edited 4 time(s). Last edit at 10/02/2017 09:07AM by istirith.