Chart Of The Day: Europe's Resolution To Unpaid Bills? Ignore Them

Tyler Durden's picture


Curious how Europe's insolvent peripheral countries, where the government is increasingly the only source of demand (if not funding), have managed to avoid falling into a primary budget deficit abyss? Simple: instead of paying their outstanding bills, Europe's insolvent nations are simply not paying them. And with the entire European bond market now a central bank controlled policy mechanism, meaning there are no longer any checks and balances to keep governments honest, there is no pressure on said countries to actually pay. Hopefully those companies on the other end of these unpaid invoices have as generous a benefactor as the ECB to fund their now persistent and growing undercapitalization.

From the WSJ:

Overdue payments have long been a bigger problem in southern Europe than in the north. The debt crisis that has restricted lending to peripheral euro-zone governments is aggravating the problem, which is rising in Greece and Italy as well. Spain's crisis, set off by the collapse of a real estate boom nearly five years ago, is particularly acute in areas where declining revenue from real estate taxes pummeled municipal and regional finances.


Suppliers are depleting their cash reserves, forgoing investments and postponing payments to their own providers.


Many have dismissed workers, pushing up a national unemployment rate that exceeds 25%. A growing number are filing for bankruptcy—27% more through September of this year than in the same period in 2011, according to Spain's judiciary.

And the stunning graphic that shows why Europe is still #1 in football, and can kick the can the farthest of all:

h/t GreekFire23

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Wed, 01/02/2013 - 09:52 | 3114539 urbanelf
urbanelf's picture

Looks like Greece just got... greecier?

Wed, 01/02/2013 - 09:53 | 3114541 Orémus
Orémus's picture

Banks can corrupt governments to increase the debt but they cannot make them enslave their people fast enough

Wed, 01/02/2013 - 10:11 | 3114587 monopoly
monopoly's picture

This is so surreal. But, exactly why you cannot short this market except for a few hours or a couple of days. They will be suffering pain and most of their gains of the last few days....Poof! And nothing is solved. Beyond words.

Wed, 01/02/2013 - 10:21 | 3114623 mm17101978
mm17101978's picture

Actually here in Italy there are private companies still waiting for the government to pay some invoices sent out in 2002! The wait here is far more than 80, 85 or 90 days on average. I believe nobody pays before, in the best case, before 6 or 12 months from the date the invoice is sent to the damn politicians. By far the worst country in Europe, with the lowest wages and with more to do to catch up to the others even when it comes to infrastructures (like the 4G/LTE comunication networks for example).

Wed, 01/02/2013 - 10:41 | 3114667 tango
tango's picture

My niece was hired by the Italian state to teach English as a 2nd language.  So she and new husband move to Rome only to be told that SHE has to find the job and the benefits promised have alas disappeared - Italy can no longer afford such luxuries anymore.   Her daddy (my brother / wealthy) is giving them a six month vacation instead of a down payment on a home. She wrote, "People are selling EVERYTHING they have!"  LOL   Good luck, you are going to need it.

Wed, 01/02/2013 - 10:30 | 3114650 Toolshed
Toolshed's picture

With all due respect, take the "word on the street" and combine it with $1 and you have...........$1. Just sayin'.

Wed, 01/02/2013 - 11:12 | 3114786 NEOSERF
NEOSERF's picture

Paying bills is so last millenium...plastic comes around as being the suggestion to Dustin Hoffman again in 2013 as being the best industry to be in for young people.

Wed, 01/02/2013 - 11:47 | 3114896 Element
Element's picture

Bills that can not be paid, will not be paid.

Wed, 01/02/2013 - 12:39 | 3115011 DaveA
DaveA's picture

Luckily those last three countries don't have blizzards. When Washington DC has one, private snowplow operators wait months to get paid. Finally in one major blizzard, they just stayed home, paralyzing the city for weeks.

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