Monti’s next move, and an assessment of Greece
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Monti’s next move, and an assessment of Greece
Kai Ryssdal: Bob was talking about banks and finance and Europe. Well, there is news aplenty from the continent today. Which gets us to A Moment with John.
John Buckley is our foreign editor, keeping an eye on European news today. And John, the big thing still is the downgrade from Friday and the market impact, which has been nothing.
John Buckley: Minimal impact. Minimal impact. The markets didn’t react badly at all. There was also today a sale of European bonds that went quite well. Klaus Regling, who runs the EFSF, the European Financial Stability Facility —
Ryssdal: Yes, nicely done. Which is their bailout fund, we should say.
Buckley: That’s their bailout fund. And he was saying that although Standard and Poor’s downgraded the EFSF, Moody’s and Fitch, two other major ratings agencies, didn’t. This is a bit like the situation when S&P downgraded the United States. The other two agencies didn’t follow suit, and there was hardly any market impact.
Ryssdal: And it’s worth a mention that it’s cheaper for us to borrow money now than it was back when we were downgraded, and the same thing is happening clearly in Europe.
Buckley: Could be a good thing.
Ryssdal: Elsewhere in Europe, though, things still quite unsettled. In Greece today, something called the troika is there? Help me out with that.
Buckley: The troika is the European Central Bank, the European Union and the International Monetary Fund.
Ryssdal: It does sound ominous, come on.
Buckley: It does not sound friendly at all, does it? And these debt inspectors have gone to Greece, and they’re basically there to measure Greece’s progress in sorting itself out. They’re looking at things like tax collection, the progress that Greece has made in cutting red tape, in cutting the public sector, in raising money through selling off state assets. And they’re asking, ‘Is this progress enough?’
Ryssdal: Do we know what the answer’s going to be?
Buckley: The signs aren’t good. Greece has gone on this tax drive; it’s made some very high-profile prosecutions of people who have not been paying their taxes, but there’s a long way to go.
Ryssdal: One last thing John: Italy, we’ll hear elsewhere in the broadcast today about the cruise ship that’s on its side now in the Mediterranean sea, but Prime Minister Mario Monti has other things on his mind in Italy today, doesn’t he?
Buckley: He has, indeed. He’s been talking today about the need to bring the south of Italy — the Mezzogiorno, as it’s called —
Ryssdal: Show-off.
Buckley: Up to the level of the rest of Italy in terms of GDP. Currently, in these underdeveloped poor regions in the south, GDP is about 58 percent of that and the rest of Italy. He’s going to make an attempt — not the first attempt made by an Italian government — to redress that situation.
Ryssdal: John Buckley, our foreign editor in a little segment we like to call A Moment with John. John, thanks a lot.
Buckley: Thank you, Kai.
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