Who is really safe?

Sentences to ponder, from Simon Johnson:

But who is really safe in Europe?  With France running an 8% GDP budget deficit (for 2010) and a debt/GDP ratio of 83.6%, should we be confident they are safe while Spain is not (with debt/GDP at 65%)?  France’s thirty years of budget deficits do not bode well for anyone expecting an immediate strong fiscal response.  In many ways Spain appears better placed to take tough actions than France.

I agree with his general point, but I believe that Germany — though perhaps not all German banks — is truly safe.

Comments

Would add that French investors hold over 1 trillion in Italian government bonds - some 20% of French GDP. If anything happened to Italy... the hit would he huge.

Tyler,

I BELIEVE THAT PLANET EARTH --THOUGH PERHAPS NOT ALL BANKS-- IS TRULY SAFE. MORE IMPORTANT, I AGREE WITH SIMON JOHNSON'S GENERAL POINT --IN MANY WAYS MARS APPEARS BETTER PLACED TO TAKE TOUGH ACTIONS THAN PLANET EARTH. (or maybe is Venus; who knows).

BTW: the general point of Simon's article is THE RUSSIANS ARE COMING!!!

FOR READING: I recommend the latest issue (May 2010) of the monthly Banco de España's Boletín Económico (in Spanish)
http://www.bde.es/webbde/es/secciones/informes/boletines/Boletin_economic/anoactual/

Jim Joyce thought the runner was safe.

I'm not particularly worried about Germany, but WHY is it safe?

Norway is safe! And among non-oil countries Sweden has pretty strong public finances and realistic treatment of pensions.

"Norway is safe!" Until the British invade, at least. Britons, right a historic wrong! Despoil the Vikings!

Did you get a look at German banks assets ?

Because Spain produce nothing but tourism and France has a real economy and allegedly well run enterprises

The french can actually collect a fair proportion of the taxes they levy, a good deal more than the Spaniards.

Norway is safe.

No deficit at all on the budget, infact a solid plus. And a metric shitload of money saved up, for covering future pension-obligations. Essentially zero unemployment, and a highly educated population. Corruption rates lower than most places I can think of, and a stable democracy.

Elvind,

What is that "metric shitload" invested in?

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