How Large have European Spending Cuts Actually Been?

In the eyes of city assessors, the so-called market value of Goldman Sachs’ headquarters in Battery Park City has dropped by $176 million, or 26.7 percent, to $511.7 million — the sharpest reduction of any Manhattan office building this year. (See chart above.)

In the wake of S&P debt downgrades, Merkel vows faster eurozone reforms. European leaders promised on Saturday to speed up plans to strengthen spending rules and get a permanent bailout fund up and running as soon as possible, a day after U.S. agency S&P cut the ratings of several euro zone countries' creditworthiness.

There is a great natural economic experiment unfolding. And it is not the QE3 versus U.S. fiscal austerity debate that some of us have been debating. Rather, it is the United States versus the Eurozone and the different policy "treatments" their economies are receiving.

Recession-hit countries including France, Spain and Italy won greater budget freedom as the European Commission tried to stem the euro economy’s longest slump and bring down a 24% youth unemployment rate. The commission eased up on the austerity policies championed by Germany in the wake of the debt crisis without proposing new spending programs for the 17-nation eurozone, set to be the world’s weakest economic link in 2013.

~ Frederic Sautet ~

Roubini Says Rising Sovereign Debt Leads to Inflation, Defaults Credit-rating cuts on Greece, Portugal and Spain this week are spurring investors’ concern that the European deficit crisis is spreading and intensifying pressure on policy makers to widen a bailout package. Roubini’s remarks underscore statements by officials such as Dominique Strauss-Kahn, managing director of the IMF, that the global economy still faces risks.