Wednesday, January 13, 2010
Two dark bits of economic news on the horizon: German GDP declined 5% last year, the worst recession in Germany since the end of the war, and the aggregate cost of insuring the sovereign debt of the EU-15 is now higher than that of insuring the bonds of Europe's top 125 investment-grade companies. Now, the latter figure is somewhat misleading, since outliers such as Greece and Ireland raise the average considerably, and the mean is not weighted by market share. So take the report as simply another sign of stress in the Euro zone. There doesn't seem to be much high-profile discussion of how to alleviate that stress. France is ideally placed to lead such a discussion, but, alas, Sarkozy is not Mendès France. If Christine Lagarde has had something to say on the subject, I haven't seen it. But perhaps France, rather than continue to congratulate itself on its relatively decent performance in the crisis, ought to show some leadership in this area.