...For homeowners in Spain and in Ireland, struggling to stay afloat amid the wreckage of a decade-long real-estate boom, those prayers are going unanswered. The European Central Bank yesterday increased its benchmark rate to 4.25 percent to fight inflation, pushing both economies a step closer to recession.
The two countries are particularly vulnerable to higher lending costs because their housing industries account for about 10 percent of their economies, twice the EU average. Montalvo's family has seen its monthly mortgage payment leap 50 percent to 2,080 euros since the ECB began raising rates in December 2005.
``They have been thrown to the wolves,'' said Stuart Thomson, who helps manage $46 billion in bonds at Resolution Investment Management Ltd. in Glasgow, Scotland. `It's much easier to bring inflation lower if you're willing to have a recession in economies like Spain, Italy and Ireland.''>>>MORE
From the Irish Independent:
IRISH airlines have reacted angrily to a new green tax that will add an estimated €56 to the cost of a family holiday.
Aer Lingus has written to MEPs and TDs to complain that the environmental levy will be "potentially disastrous" for the Irish public.
Ryanair has also dismissed the new environmental levy that the European Commission is set to rubberstamp this week as a "scam". The proposed new charges on airlines are expected to add an extra €14.50 to the cost of a return flight....
From The Brussels Journal:
Spain is basking in football glory after winning the European Championship on June 29. But now that the euphoria is over, Spaniards are waking up to discover that their economy is in a free-fall without a parachute. Indeed, the country is being buried daily by an avalanche of depressing economic news, with jobless numbers spiraling upwards, and growth projections being revised downwards, faster than most Spaniards can say ¡Viva España!....MORE
Again, from The Brussels Journal:
Sarkozy: Irish Don’t Count, Poles and Czechs Will Be Punished If They Don’t Behave
A quote from Bruno Waterfield at his Telegraph blog, 2 July 2008:
Nicolas Sarkozy, President of France, held a strictly off-the-record lunch briefing for international Brussels-based correspondents on Tuesday at the Elysée. The Daily Telegraph was not invited, in fact deliberately excluded. […] But despite the best efforts of the Quai d'Orsay's diplomats, I am able to reveal on-the-record, as a blog exclusive, Mr Sarkozy's more relevant comments.
The French strategy during their six month EU Presidency, which began on July 1, is to isolate Ireland after last month's referendum rejection of the Lisbon European Union Treaty....MORE