SMM10, 19 March: war has been raging in the history of continental Europe, and there has never been any real unification. The great Napoleon was only one step away from Waterloo. To this day, Europe is full of small countries, although they claim to be developed countries. In fact, in terms of economic development, there is already a shortage of skills. The economic growth rate is generally below 2%, but the welfare has not been cut, so that the foreign debt is high. What is particularly bad is the five European pig countries, led by Italy. Before that, Greece directed a European debt crisis. When Ma Guangyuan, an economist, visited Greece at that time, he thought that the Greek people were in what kind of dire straits. Unexpectedly, when he came to Greece, he found that Greece was a piece of peace and that he should eat. It should be drunk, Enron is fine, everyone's life is very normal, people continue to have high welfare, even the government has not left behind regular check-ups for stray dogs, and he lamented at the time that the euro zone was bound to collapse.
This time there was a change of director, and a debt crisis broke out in Italy, which is also one of the five European pig countries. On the same day, the Italian stock market fell 4.4 percent, the biggest drop since June 2016, and the banking index fell 8 percent. The two major banks were too scared to open because the Italian government announced that the budget deficit ratio for the next three years was less than 2.4 percent. Well above the EU's target of 1.6% in 2018 and 0.8% in 2019. Italy has staged a bloody drama of forming a cabinet before. There is no final conclusion on the choice of prime minister. Now the government is controlled by far-right parties. If the European Union pushes them into a hurry and insists on cutting the fiscal deficit, It is very likely that Italy will jump out of the wall and, like Britain, leave the European Union and get back the right to print money to get out of the crisis; If the European Union makes concessions to bail out Italy and allows it to continue to run a high deficit, the consequences will be serious. Italy's public debt is now US $2.3 trillion, or 132% of GDP, and it will never be filled like a black hole. If there is another European debt crisis like Greece, I am afraid the European Union will really be doomed. Italy is not Greece!
What should I do? Inexplicable!
Italy is the third largest economy in the euro zone, and if it leaves the EU, the EU will have little to play with. The EU's problems show that it is a debt crisis and, in essence, an economic model crisis. As the leader of the European Union, Germany, of course, has the best economy. Through its powerful manufacturing industry, represented by cars, Germany has led its own economic growth in the form of super exports, while sucking up other small countries in the euro zone. Including labor, including talent, investment, and so on, a large number of factors of production returned to Germany, helping the German boss to break his unbreakable position. Over the years, the Matthew effect has become more and more obvious, and the first echelon of the economy, dominated by Germany and France, has outshone others. Other economies are lacklustre. This is different from the first-tier cities in China. China is a unified economy, which can regulate the contradiction between cities through national macro-control, transfer payment and so on. Not in Europe. Germany will not bail out other countries. Although it uses euros, it will not be financially unified. Germany will not be so stupid. This is the problem in Italy. There is a dilemma between saving or not saving.
II. Brexit in Britain
As an island country, Britain shares a strange dream with the European Union, which has always given people the feeling of being in Cao Ying. The British feel that joining the European Union is of little benefit, especially the problem of refugees, which annoys the British people, and the European Union does not like Britain, so Britain launched a referendum on Brexit in 2016. in the end, 52% of the people supported Brexit. Britain has since begun a long road to Brexit.
Now the official Brexit time from the UK is less than half a year, so far has been negotiating for a year and a half, the process is very slow, the news of Brexit has also been affecting the eyes of the market. Despite the good progress made before, there are still great differences between the two sides. First of all, with regard to Britain's economic relations with the European Union after Brexit, option one, the European Union hopes that Britain will remain in the European Economic area and remain in the Customs Union. If so, Britain will not be able to trade freely with other countries. There is no way to resist the surging refugees. What is the difference between taking off and not taking off? Option two, the European Union will only sign a free trade agreement with Great Britain, and Northern Ireland will remain alone in the European Economic area. This option to split Britain was immediately unanimously opposed by the British Parliament. Aunt May said that she would never accept any agreement that threatened the integrity of the United Kingdom and would rather not reach an agreement than a bad agreement.
What is unresolved is the border problem in Northern Ireland. In fact, from the beginning of the negotiations to the present, this issue has not been resolved, nor can it be resolved. In 1921, in the second year of the Irish War of Independence, Britain was forced to sign a contract with the Irish government, liberating 26 counties in southern Ireland and six counties in the north. Religious conflicts between the British and the Irish in Northern Ireland were common until 1998, when the two governments signed a peace agreement and the two countries have been at peace with each other. With the continuous progress of Brexit, the border issue of Northern Ireland is back on the table. Brexit means that Northern Ireland must leave the European Union. There will be a hard border between Ireland and Northern Ireland, and neither the Irish government nor the European Union can agree. Do not set a border. Then Northern Ireland alone in the European Union, the United Kingdom of Great Britain and Northern Ireland split into two, the United Kingdom of Great Britain and Northern Ireland does not agree.
Earlier, the British Automobile Industry Association said that it would not accept "Brexit without agreement." if Britain ends up with "Brexit without agreement," it will inevitably have an impact on the British economy and greatly increase the risk of a hard landing for the economy. Increasing the risk of a devaluation of the pound is adding to the already weak British economy.