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EU Economics

EUROZONE TURMOIL: Spain, Italy and Greece owe massive debt of €1 TRILLION to ECB

EURO states owe the European Central Bank (ECB) a staggering €1trillion as they teeter on the verge of bankruptcy amid warnings a debt bubble is on the horizon.

Analysts condemned the “flawed economics of this reckless [EU] experiment” and said the ECB faces a rude awakening as states crumble under the burden of debt.Market conditions in Eurozone are showing signs of a return to the conditions that sparked the 2011 European debt crisis which first reared its head in 2009.The ECB uses a system called Target2 to assess levels of debt and the bank’s data appears to show it is only a matter of time before the current system breaks.

The people of Greece have been out on the streets once more GETTY   The people of Greece have been out on the streets once more


They bought into the concept of an EU gravy train, without questioning the flawed economics of this reckless experiment

Fuller Treacy Money analyst David Fuller

At the time several eurozone member states including Greece, Portugal, Ireland, Spain and Cyprus were unable to repay or refinance their government debt.They were bailed out through assistance of third parties including Eurozone countries, the ECB, and the International Monetary Fund.But Spain, Italy, Greece and Portugal are racking up debts they will never be able to pay off.

The people of Spain took to the streets over debt last week GETTY           The people of Spain took to the streets over debt last week


Spain’s Target2 liabilities are €328billion, almost 30 per cent of GDP.And Portugal’s and Greece’s liabilities are both at €72billion.The Banca d’Italia alone now owes a record €364billion to the ECB – 22 per cent of GDP.

Women march in the street in Greece over debtGETTY    Women march in the street in Greece over debt


Simon Derrick from investments company BNY Mellon said: “Alarm bells are starting to ring again.”Our flow data is picking up serious capital flight into German safe-haven assets.”It feels like the build-up to the eurozone crisis in 2011.”

Fuller Treacy Money analyst David Fuller said the latest figures are a major issue.The firm publishes data on global capital markets.In a note to investors he said: “Those whom the gods wish to destroy, they first make mad, including driving them into the EU.

“It will be a rude awakening for political Remainers, from the House of Lords to Scottish Nationalists.

People burnt the EU flag on the streets of Greece amid fury at the Eurozone GETTY   People burnt the EU flag on the streets of Greece amid fury at the Eurozone


“It is hard to see how the breakup of the EU could not be disruptive, not least because it is the last outcome that many people have expected.”They bought into the concept of an EU gravy train, without questioning the flawed economics of this reckless experiment.”This will be the focus of many books and university economics courses for decades to come.

“I have long favoured a rapid exit from the EU but the UK Government appears to have felt that this was too controversial and risky, not least in terms of public opinion, plus UK businesses and also foreign businesses with divisions in Britain.

“This view may be correct.”At this point, time may work in the UK’s favour, although there are certainly plenty of risks, mainly in the form of EU bad debts.”This will all be very contentious, although I maintain that over the longer term, Europe including the UK will be far better off as a trade association of independent, self-governed countries with their own currencies.

“The last thing Europe should want or need is more trade barriers.”

http://www.express.co.uk/news/world/781518/Eurozone-finance-economy-trillion-debt-ECB-Spain-Italy-Portugal-Greece

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