|Photo by Gareth|
Learning a foreign language frequently presents problems to the poor student. For those unfortunate enough to try to learn English, differentiating the pronunciation of cough and though, of dead and bead and of meat and great is, to say the least, a challenge. For the English student, there is the problem that grammar is all a bit of a mystery. Mention a gerund, the subjunctive, a pronoun (personal or otherwise) or the past pluperfect and you will be met by a blank stare as if….well, as if you had been speaking in a foreign language. This inability to understand the structure of one’s own language is often the cause of the difficulties experienced in learning a foreign tongue.
Individuals can face a similar crisis of confidence when trying to understand what is going on in the eurozone at the moment. One can read how the EU and the ECB has established with the aid of the IMF the EFSF and the ESM to enable the PIGS to sort out their Debt to GDP ratios, but this Alphabetti Spaghetti approach to economics can often invoke the desire to lie down somewhere quietly in a darkened room.
So what is it all about? To translate, the European Union and European Central Bank, having narrowly averted disaster at the end of last year, set up, with the assistance of the International Monetary Fund – the body (if that is the right word) formerly headed up by the now disgraced Dominic Strauss-Kahn – two bailout funds in the form of the European Financial Stability Facility (current commitments of €180 billion) and the European Stability Mechanism (current commitments of €700 billion) to bail out the distressed economies of the peripheral European nations of Portugal, Ireland and Greece (while trying to ensure that enough leeway exists to cope with any further problems in Italy and Spain) and to address the problems experienced by these nations with excessive borrowings through a package of loans and austerity measures.
To some extent these measures have calmed markets over the first quarter of this year and, despite some backsliding by the incoming Spanish government (albeit with one eye on a series of regional elections), has seen progress made, particularly in Ireland and Italy. However, the political landscape is likely to cast a shadow over events over the next quarter as elections in France come to the fore. Who knows how a future President François Hollande might affect sentiment?
And you thought that the pronunciation of English was complicated...