UK May be Next After Irish Downgrade
June 8th, 2009Via: Reuters:
Britain and Austria could be the European countries whose sovereign credit ratings are most likely to be cut next after Standard & Poor’s lowered Ireland’s rating on Monday for the second time in only three months.
Of those two, Britain is the only one with its sovereign credit rating on “negative” watch, suggesting if S&P is to cut another sovereign it’s the UK triple-A rating that could go.
The sheer scale of government borrowing and projected deficits over coming years, coupled with the banking sector’s growing liabilities, mean a downgrade could be on the cards if policy steps fail to impress the ratings agencies.
Austria still has its triple-A rating and is on “stable” outlook. But that could change if financial and economic turmoil in the Baltics and Eastern Europe, to which Austrian banks have large exposure, deepens.
“The UK is a point of reference. If S&P is worried about Ireland’s exposure to banks, it could well be worried about UK’s exposure to banks,” said Ciaran O’Hagan, senior strategist at Societe Generale in Paris.
Britain will borrow 175 billion billion pounds this fiscal year and the budget deficit will swell to a record 12.4 percent of GDP.
O’Hagan noted that “contingent liabilities” of the UK financial sector, mostly banks’, are estimated at almost 30 percent percent of gross domestic product and will almost certainly rise this year.
“S&P could take action on the UK,” he said.
The Local/Euro Elections in Ireland and the UK have been interesting. There really isn’t that much of a policy difference between the major parties, which are neo-liberal center-right/center-“left” – but the next General Elections in each state could be interesting if trends continue.
The BNP (British Fascists) won 2 seats in the European Parliament, out of a total of 70 UK seats. They came very close to a third seat. Here’s the twist: if Ireland ratifies Lisbon (we’re likely to vote again on an amended treaty in the next year) then the number of UK seats will increase, and the third BNP candidate will be awarded the seat! So, a YES vote for Lisbon by the Irish will send a British fascist to Europe…
The anti-immigration UKIP party came second, pushing Labour into a deserved third place. “Blame dem furners” seems to be a way to win votes in the teeth of economic meltdown. No surprise there.
In the UK, there was a surge for support to small parties, with the greens winning almost 10%. Under their horrible electoral system, they won’t win anything close to that number of seats. The BNP won about 6 or 7%. That’s a big vote for racist scum, and bodes poorly for the Brits.
In Ireland, the economic meltdown continues. Unemployment now over 400,000 for the first time (even in the awful 80s we never came close to that). Our truly wretched Republican/Green coalition govt. is in complete shambles. There could be an election at any time, but they MIGHT hold on until 2012.
There is no relief in sight – all the more amazing when you see the unbridled arrogance of our “leaders”, who believe with 100% certainty that they were Born to Rule.
The amazing thing about listening to news coverage from home is the near total cluelessness of the electorate – AND the politicians. I guess they don’t read sites like this or “The Automatic Earth”. They think that this situation is akin to a bad recession, and will blow over in a few months. What passes for “debate” is petty arguments about style and little about actual fundamentals.
It’s fascinating to watch, but in the same way as a train wreck…you have to wonder how low things will have to go before people wake up. It doesn’t seem likely to happen for most folk.
Time to get back to digging my bunker. At least we seem to be in a slow crash (given that I’ve been watching the collapse for over 4 years now).
The BNP don’t worry me too much. The UK intel agencies won’t have been doing their job and duty to the inbred scumbags who comprise our elites if they haven’t infiltrated the BNP at the highest levels. All I see the BNP as is a honeypot to attract the wannabe Nazi Brown Shirt types and thus it helps make such people all the more manageable by the powers that be.
Meanwhile, the real fascists continue to dream up ever more satanic ways to butcher our liberties and advance their mega corporate interests through illegal wars, economic warfare, the push for a NWO, etc.