Today’s post will poke a lot of fun at the EU Commission President Jean-Claude Juncker, so I warn you now – if you are a fan, click next. To a large degree, it’s not really sporting going after JC as he offers such a treasure trove of opportunities.
We’ll start with his most infamous slip. “When it becomes serious, you have to lie.”
Yeah, I get it. He just said out loud what everyone knows. But it was still a dumb thing to say. Do you think Bill Clinton looks forward to going to church Sunday morning after a rough Saturday night chatting up inappropriately young women? Not a chance. But he keeps quiet and heads off. Which is what JC should have done. Kept his mouth shut.
Speaking of keeping your mouth shut…
Why I am picking on good ‘ole JC so much today? Well, it’s his comments about Italy.
From Bloomberg:
“One crisis was enough,” Commission President Jean-Claude Juncker said in televised remarks at an event in Freiburg, Germany. “After the toughest management of the Greece crisis, we have to do everything to avoid a new Greece – this time an Italy – crisis.”
You see, Jean-Claude is upset that the Italians are not adhering to EU rules about the size of their deficit. He wants them to get into line and balance their budget. The Italian coalition government has tabled a budget with a 2.4% deficit as a percentage of GDP – much higher than allowed under EU rules. Given the EU’s staunch opposition to deficits of this size, they have increased rhetoric in attempt to force the Italians to back down.
This has spooked markets and sent the Italian bond market tumbling.
The German bund market has equally been affected by the bad news with a big flight-to-safety-bid.
Yet let’s take a moment to consider this “monstrous Italian transgression.” The Italian government is proposing running a deficit of 2.4% of GDP. But what does that look like compared to other nations? Like for example, the United States…
