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EU Extends Deficit Deadlines For Most European Countries, Admits Structural Adjustment Failure, Kills Austerity

Tyler Durden's picture





 

Moments ago, the following European Commission website hit the interwebs, which can be summarized as follows:

  • EU EXTENDS DEFICIT DEADLINE FOR POLAND TO 2014
  • EU EXTENDS DEFICIT DEADLINE FOR SLOVENIA TO 2015
  • EU EXTENDS DEFICIT DEADLINE FOR PORTUGAL TO 2015
  • EU EXTENDS DEFICIT DEADLINE FOR NETHERLANDS TO 2014
  • EU EXTENDS DEFICIT DEADLINE FOR SPAIN UNTIL 2016
  • EU RECOMMENDS LIFTING DEFICIT REGIME FOR ROMANIA, LITHUANIA
  • EU RECOMMENDS LIFTING EXCESSIVE-DEFICIT REGIME FOR ITALY
  • EU SAYS 20 STATES CURRENTLY UNDER EXCESSIVE-DEFICIT PROCEDURES

Translation: the theatrical spectacle of Europe's austerity, which never really took place, is finally over. Going forward political incompetence will henceforth be known as just that: incompetence, and elected rulers will not be able to pass the buck to evil, evil, "austerity." More importantly, Europe has also proven without a doubt, that any "structural adjustments" on the continent are impossible, and that governments are locked in a spend till you drop mode.

For Europe's sake, it better find a sake of endogenous credit creation once the BOJ's carry trade fueled mask of all that is wrong with Europe fades away. Alas, following yet another painful M3 report, and an intractable ECB which refuses to monetize de novo and unsterilized (and simply can't "lack of fiscal union" reasons previously explained), where such credit creation will come from is unknown.

 


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Wed, 05/29/2013 - 08:22 | Link to Comment GetZeeGold
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Extend and pretend.....good call.

Wed, 05/29/2013 - 08:28 | Link to Comment King_of_simpletons
King_of_simpletons's picture

Inflate away and then claim there is only deflation everywhere.

Wed, 05/29/2013 - 08:37 | Link to Comment Going Loco
Going Loco's picture

This does NOT mean inflation. The rate of new money creation implied by this news is well below the rate of existing money destruction that the status quo implies.

Wed, 05/29/2013 - 08:45 | Link to Comment Rubicon
Rubicon's picture

What about the French?

Wed, 05/29/2013 - 09:38 | Link to Comment tarsubil
tarsubil's picture

Their women are fantastic.

Wed, 05/29/2013 - 11:16 | Link to Comment A Nanny Moose
A Nanny Moose's picture

Drifting to the left!

Wed, 05/29/2013 - 08:54 | Link to Comment Ghordius
Ghordius's picture

correct. this is politics adjusting fiscal policy according to the monetary contraction that the ECB is (unexpectedly, for some) achieving

and yet a small reminder: monetary policy took years to be felt. in the 20's, in Germany, consensus was that it took 18 months between printing and "feeling it" in the economy

---------

btw, we don't need a bloody fiscal union - the City of London Corporation can hopefully wait for EuroBonds until Kingdom Comes

Wed, 05/29/2013 - 09:01 | Link to Comment drdolittle
drdolittle's picture

So, money supply is contracting and we are experiencing deflation? Long cash?

Not saying it couldn't happen but I don't see it.

Wed, 05/29/2013 - 09:10 | Link to Comment Ghordius
Ghordius's picture

do you live and work on this continent? if you were now in Argentina you'd have a totally different view, too

Wed, 05/29/2013 - 08:43 | Link to Comment kridkrid
kridkrid's picture

Debt can't be inflated away in a system where the creation of money requires that money be loaned into existence.

Wed, 05/29/2013 - 09:03 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Correct.  Moreover, in a fractional reserve system one significant default means we all default (at least everyone without real money or assets).

Wed, 05/29/2013 - 09:05 | Link to Comment Skateboarder
Skateboarder's picture

It's a goddamn McMansion built on a foundation of twigs and string.

Wed, 05/29/2013 - 09:08 | Link to Comment Ghordius
Ghordius's picture

disagree with both. example: hyperinflation. all debt is estinguished (in Weimar, some paid back their mortgages with... postal stamps)

this illusion is very common, and it's often a sign of over-indebtedness of a country's population during reflation/deflation bouts

Wed, 05/29/2013 - 08:29 | Link to Comment kridkrid
kridkrid's picture

They/We can collapse now or we can collapse later. There is no 3rd option. Austerity was always a joke... here and there.

Wed, 05/29/2013 - 09:01 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Jubilee or world war are options, guess which one I am betting on, given humanity's past performance.

Wed, 05/29/2013 - 08:26 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Oh, I don't know.  They are pretty good at making up excuses for their failures. 

So, lemme guess...this is somehow bearish for gold?

Wed, 05/29/2013 - 08:30 | Link to Comment JustObserving
JustObserving's picture

QE or more QE.  Austerity or lack of it.  Everything is bearish for gold under Bernanke's orders.  

Wed, 05/29/2013 - 14:06 | Link to Comment auric1234
auric1234's picture

Reality is harsh on promises to deliver something. Specially if such promises come from bankster crooks.

 

Wed, 05/29/2013 - 08:27 | Link to Comment Shash
Shash's picture

Buy some more of those Spanish bonds !!

Wed, 05/29/2013 - 14:03 | Link to Comment auric1234
auric1234's picture

Great opportunity, they don't print any more of them! Oh wait.

 

Wed, 05/29/2013 - 08:27 | Link to Comment fonzannoon
fonzannoon's picture

I am watching treasuries rally nicely and now stocks getting bid too.....HOLY FUCKING SHIT

Wed, 05/29/2013 - 08:36 | Link to Comment new game
new game's picture

sidelines are looking very good...

long/short/long/short> man oh man, this is work and i just don't see any progress...

ah, fukk it, i'm just gonna go galt...

Wed, 05/29/2013 - 08:46 | Link to Comment RSloane
RSloane's picture

What's even more bizarro are the reasons given on major business websites as to why futures were down this morning. Its as if they hired J.K. Rowling to write the headers!

Wed, 05/29/2013 - 08:56 | Link to Comment fonzannoon
fonzannoon's picture

RSloane the Bernak has completed his mission. No wonder he wants out. He is bored. The futures are barely down. The monkeys are frothing at the mouth to buy the dip. Buy any dip. We can't even open down and rally anymore. The fed is now working in reverse. The PPT is in the bahamas.

The best part is they keep pushing up different sectors and pushing down the popular ones. So buying individual stocks now does not work. The only thing you can do is buy the index.

Wed, 05/29/2013 - 09:02 | Link to Comment LawsofPhysics
LawsofPhysics's picture

85 billion per month, indefinitely...  Take that away and show me the rally monkeys.

Wed, 05/29/2013 - 09:12 | Link to Comment fonzannoon
fonzannoon's picture

It looks like they are completing yet another shit sandwich handoff to retail. I wonder if they even goosed yields to nudge grandma out of her bond fund and into the S&P. Once they complete that handoff they go long treasuries, and watch grandma lose her ass trying to unload that S&P etf. 

Then after they make 30% on their treasury trade they swap out for some stocks on the cheap again.

Wed, 05/29/2013 - 09:10 | Link to Comment Skateboarder
Skateboarder's picture

Slap some extra socialized losses type of capital controls on MMFs and there we have it, a bright future for one and all "investor."

Wed, 05/29/2013 - 14:02 | Link to Comment auric1234
auric1234's picture

I just read this explanation about silver fall:

Many analysts say silver had been struck a dual blow by deceleration in world industrial activity, coupled with a gradual recovery in the global economy which has seen investors move away from the traditional safe-haven metals.

So I guess silver went down because the economy is getting better and because the economy is getting worse. Surely both news are bearish for silver!

You couldn't make this shit up.

 

Wed, 05/29/2013 - 08:29 | Link to Comment orangegeek
orangegeek's picture

Love the Euro beings.  Always talking and promising, but they rarely do anything.

Wed, 05/29/2013 - 08:33 | Link to Comment EscapeKey
EscapeKey's picture

Whatever do you mean? They do lots of things, though mainly talking, pontificating and kicking the can.

Wed, 05/29/2013 - 08:42 | Link to Comment new game
new game's picture

maladay monday

terrific tuesday

wonderfull wednesday

trubbled and bubbled thursday

fukkit friday

sat-in-sun for fun...

 

Wed, 05/29/2013 - 08:58 | Link to Comment Ghordius
Ghordius's picture

some have to intervene, some have to utter treaths of intervening, and some achieve their goals just by talking

some governors of the Bank of England even achieve some influence on markets without being even (yet) in charge

Wed, 05/29/2013 - 09:11 | Link to Comment malikai
malikai's picture

I'll laugh my ass off if Carney comes in and announces no new Queasing.

Wed, 05/29/2013 - 09:22 | Link to Comment EscapeKey
EscapeKey's picture

Given exactly how busy he is sucking off Shinzo Abe, I very much doubt that will happen.

Unless of course we talk about the rhetoric, of course. Then it'll be the same old "TEMPORARY", "sterile", "non-inflationary", "deflation-fighting", "stability-inducing", "market-supporting", "urgent measures" that we've all come to love so much over the past 5 years of "green shoots", "recovery".

 

Wed, 05/29/2013 - 09:58 | Link to Comment malikai
malikai's picture

That's about what I'm thinking. He arrives and pulls a fed taper lie, only to double down "temporarily" to "support" cancerous "growth".

Wed, 05/29/2013 - 08:30 | Link to Comment the not so migh...
the not so mighty maximiza's picture

Spain 2016,   o yeah

Wed, 05/29/2013 - 08:31 | Link to Comment orangedrinkandchips
orangedrinkandchips's picture

nobody does it better than MUTHER NATURE....

 

LET HER BE AND HAVE HER WORK HER MAGIC....(I.E. if your country, bank, company, etc. fails.....it fails....bye-bye, see ya later.......bury the entity and move on....)

 

LET IT BE! IT WILL TAKE CARE OF ITSELF!

Wed, 05/29/2013 - 08:34 | Link to Comment jmcadg
jmcadg's picture

And the ratings agencies say:

"Party on dudes"

Wed, 05/29/2013 - 08:36 | Link to Comment jover
jover's picture

and belgium was to get a 750 million euro fine for not making it (4% instead of 3%)

Wed, 05/29/2013 - 08:51 | Link to Comment Dead Canary
Dead Canary's picture

Yea, fine people for being broke. Only Eurocraps could think of that.

Wed, 05/29/2013 - 08:38 | Link to Comment SheepDog-One
SheepDog-One's picture

EU extends slow-motion trainwreck.

Yea whatever.

Wed, 05/29/2013 - 08:39 | Link to Comment FJ
FJ's picture

Long Printing Presses and lumber and long civil servants, who will grab whatever is left of the pie. Short the middle class, the youth, the elderly. Expecting the end of EU copper coin production soon, due to seigniorage issues.

After the chaos of 1923 it has been considered improbable that financial chaos would ever be allowed to develop so far. It's hard not to feel paralyzed by the unfolding story...

 

Wed, 05/29/2013 - 08:42 | Link to Comment LawsofPhysics
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The outcome will be the same as that which cannot be sustained, won't be.  Hedge accordingly.

Wed, 05/29/2013 - 08:42 | Link to Comment Mercury
Mercury's picture

Typically this kind of thing ends in war.

Wed, 05/29/2013 - 08:47 | Link to Comment e-recep
e-recep's picture

kicking the can down the road... yeah, that's how you deal with problems.

Wed, 05/29/2013 - 08:48 | Link to Comment hookah
hookah's picture

If you dont act like Brussels wants, then EU will fuck you over the deficit. If you act like as Brussels wish, then you can have over 10% deficit...

Wed, 05/29/2013 - 08:49 | Link to Comment Dead Canary
Dead Canary's picture

Just shoot this poor dumb horse and get it over with. Better than letting go on suffering.

Wed, 05/29/2013 - 08:48 | Link to Comment samsara
samsara's picture

I guess this is the policy version/impact of this realization...

Schaeuble Warns Of "Revolution" If Welfare Model Threatened

Wed, 05/29/2013 - 09:00 | Link to Comment Ghordius
Ghordius's picture

I agree with Schaeuble on what he said. though don't forget that revolution does not need to be bloody. think how the German Democratic Republic experienced a relatively bloodless revolution - before ReUnification

Wed, 05/29/2013 - 09:23 | Link to Comment e-recep
e-recep's picture

it was not a revolution. it was the collapse of an idea/system. there was no one left to defend the old system. hence no blood. revolutions are always bloody.

Wed, 05/29/2013 - 11:25 | Link to Comment Ghordius
Ghordius's picture

disagree. Webster online says

 

Definition of REVOLUTION

1

a (1) : the action by a celestial body of going round in an orbit or elliptical course; also : apparent movement of such a body round the earth (2) : the time taken by a celestial body to make a complete round in its orbit (3) : the rotation of a celestial body on its axis

b : completion of a course (as of years); also : the period made by the regular succession of a measure of time or by a succession of similar events

c (1) : a progressive motion of a body around an axis so that any line of the body parallel to the axis returns to its initial position while remaining parallel to the axis in transit and usually at a constant distance from it (2) : motion of any figure about a center or axis <revolution of a right triangle about one of its legs generates a cone> (3) : rotation 1b

2

a : a sudden, radical, or complete change

b : a fundamental change in political organization; especially : the overthrow or renunciation of one government or ruler and the substitution of another by the governed

c : activity or movement designed to effect fundamental changes in the socioeconomic situation

d : a fundamental change in the way of thinking about or visualizing something : a change of paradigm <the Copernican revolution>

 

Wed, 05/29/2013 - 08:50 | Link to Comment timbo_em
timbo_em's picture

Thank god that barbarous austerity is finally over! [/sarc]

Funny though, even 2016 seems unachievable for Spain.

Wed, 05/29/2013 - 08:54 | Link to Comment the not so migh...
the not so mighty maximiza's picture

The EU will not exist in 2016 so problem solved

Wed, 05/29/2013 - 08:54 | Link to Comment GolfHatesMe
GolfHatesMe's picture

I think that is a typo s/b 2106

Wed, 05/29/2013 - 08:59 | Link to Comment DeliciousSteak
DeliciousSteak's picture

Austerity did, and does, take place. It just didn't result in any cuts in overall spending. The banksters are genius.

 

Wed, 05/29/2013 - 09:00 | Link to Comment Escapeclaws
Escapeclaws's picture

No more austerity? Poor, poor TBTF bankers! Where will their bonuses come from? Poor, poor bankers!

Wed, 05/29/2013 - 09:08 | Link to Comment wagthetails
wagthetails's picture

amazing.  then this equity bubble really does have a lot more upside.  the $1tril coin question is how much longer it can go up...we know how this ends. 

Wed, 05/29/2013 - 09:16 | Link to Comment Turin Turambar
Turin Turambar's picture

I think I can hear the fat lady warming up.

Wed, 05/29/2013 - 09:24 | Link to Comment smacker
smacker's picture

 

I can only see this development as the EZ masters/mistresses and other assorted crats now abandoning efforts to resolve the multiple debt/spending/productivity crises in the EZ. By extension, this must be Phase One of an eventual breakup or collapse of the EZ. Merkel's re-election campaign is crucial to the timing...

Wed, 05/29/2013 - 09:28 | Link to Comment machineh
machineh's picture

... while the Eurocrats say 'Goodbye to Maastricht and all that.'

Wed, 05/29/2013 - 09:38 | Link to Comment gatorengineer
gatorengineer's picture

All they are doing is clearing the decks to monetize and print when Benny goes to 120/month....  Printed money has to go somewhere....  Roads bridges, subsidies.....

Wed, 05/29/2013 - 09:39 | Link to Comment youngman
youngman's picture

Wonder what the ratings agencies are going to do now......no more austerity....its on like Donkey Kong....spend spend spend...is OK now....watch the money flow now...the Japanese started it...I do not know how it will end....but I think inflation is very close...big inflation...hyper is some countires

Wed, 05/29/2013 - 13:55 | Link to Comment auric1234
auric1234's picture

The run for the exits has started in JGB land. The CB can monetize all they want, the only result is runing their currency.

I think hyperinflation is very close in Japan.

 

Wed, 05/29/2013 - 10:27 | Link to Comment docj
docj's picture

Seriously, what choice do they actually have at this point, once you take "recognize the losses and bankrupt all the banksters" off the table because it will never. freaking. happen?

Wed, 05/29/2013 - 12:15 | Link to Comment Van Halen
Van Halen's picture

It would be interesting to correlate deadline for each country with that coutry's national elections. I wonder...

Wed, 05/29/2013 - 13:53 | Link to Comment auric1234
auric1234's picture

Spain never ceases to amaze. Government officials paying homage to combatant forces in the nazi army:

http://www.taz.de/Spanien-und-der-Faschismus/!116450/

 

Wed, 05/29/2013 - 15:28 | Link to Comment Don Diego
Don Diego's picture

the Germans helped Spain get rid of the Stalinist in the 1936-39 Civil War. Without their help, Spain would have been under a Stalinist dictatorship and would have a development level similar to Albania.

In exchange for the help, Franco supplied Germany with strategic raw materials and some troops that fought the Soviets. Those veterans that fought Stalin deserve all the praise.

Wed, 05/29/2013 - 15:59 | Link to Comment auric1234
auric1234's picture

All is well then. I have but one question: do you have a Hitler portrait in your desk?

 

Wed, 05/29/2013 - 19:17 | Link to Comment Aurora Ex Machina
Aurora Ex Machina's picture

Um, right. You might be forgetting the anarchists there, and how Stalin fucked them over as well and then the horribly regressive oppression that followed until the '70s. Lots of dead people, women's rights getting blown back to Catholic Church approved levels, gross nepotism, that kind of thing.

As long as you weren't there, of course, it doesn't matter. I'd recommend Pan's Labyrinth. Note: have family who brought Black & Decker to Spain in the 60's / 70's, empirically it was a shitty regime before foreign (US) investment was allowed in, and was entirely backward. B&D was bought out by Mormons, which is why I still have a slight fondness for Mitt R. Business wise, the old school Mormons were good people.

 

 

p.s. You're a cunt. Sorry, shouldn't say that: you're an ignorant cunt. Much more accurate.

Wed, 05/29/2013 - 19:56 | Link to Comment Lord Koos
Lord Koos's picture

Ask the Greeks if austerity is "over". 

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