Post card from Skin and Blister on the Euro debt crisis

My sister has lived in Crete for the last two years, which is of course part of Greece. Thats after 25 years in England. Her accent is Estuary English. If you met her, you would think that she is English and probably from East London or Essex, from her accent and peroxided blonde hair. I email her most days with reports on the health of our mother, Ruth.

The other day I emailed her about the Greek elections. I had observed that the Greek elections had led the NZ media cycle for a day or so; mostly in a "News for Gerbils" sort of way. Will the Euro be saved? Will the Euro affect NZ exports?

Lots of breathless news ("Will the Eurozone be saved") about the Greek elections and the swearing in of the new Prime Minister Mr Samaras. OMG. Is it much of a deal where you are?

Her reply was:

re: Greece, all a bit subdued here. We are not Athens or the mainland however so its always been (or seemed) a bit remote here. BIG football game on tomorrow night. however. Euro 2012. Greece versus Germany!! apparently Angela Merkel is going to it and will be in the stands.

Never mind the Greek economic situation, lets watch the football! I understand that Greece was thrashed by the German team 6 - 2.

Here are Clarke and Dawe on the economics of the European sovereign debt crisis. I dedicate this to my apolitical sister.

Too big to fail

Here is the other Simon Johnson talking about breaking up the American banks that are "too big to fail". This is the key message from the book 13 Bankers Johnson co-wrote with James Kwak. See also this Wall St Journal article

Greek debt crisis

This evening's economic analysis highlights the Greek debt crisis and is bought to you by John Clarke and Brian Dawe.

New Zealand's overseas debt

There is a lot of talk about New Zealand's overseas debt. Usually described as "ballooning". And sometimes the debt levels are compared to those of Ireland and Greece. According to the Reserve Bank, at 24 December 2010, New Zealand as a whole owed international creditors $253 billion NZ dollars. This is equal to 132% of GDP. The Reserve Bank provides the debt data analysed between Government and corporate (private) debt in this spreadsheet I made it into the chart with R.

The first step is saving the data into a Comma Separated Values file with a spreadsheet programme. The R code is then:

d <- read.csv("he3.csv", skip = 2,header=TRUE, sep=",", na.strings="na", dec=".", strip.white=TRUE)
attach(d)
totdebt<-c(Total/1000)
tmax<-max(totdebt,na.rm = TRUE)
plot(totdebt, ylim=c(0,tmax),type="n", main="New Zealand Overseas Debt 1993 to 2010",las=0,xlab="", ylab="$NZ billion",xaxt="n")
axis(side=1, las=0,at=c(8,28,48,68), labels=c("1995", "2000", "2005","2010"))
points(totdebt,type="l",col=2,lwd=2)
points(Govt/1000,type="l",col=4,lwd=2)
points(Corp/1000,type="l",col=3,lwd=2)
mtext(side=1,line=2.4,cex=0.9,"Source: New Zealand Reserve Bank")
mtext(side=1,line=3.4,cex=0.8,"http://rbnz.govt.nz/statistics/extfin/e3/he3.xls")
legend(1,250,bty="n",c("Total Debt","Private Debt","Government Debt"),lty = 1,lwd=2,col=c(2,3,4))

The chart makes it pretty obvious it is the private sector overseas debt that has steadily increased and not Government overseas debt.