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Der Standard - Austria | Tuesday, August 5, 2014

Northern states live in an illusory world

The fact that the multi-billion euro bailout for Banco Espírito Santo, one of Portugal's largest listed lenders, hardly effected the stock markets shows how disconnected the financial markets are from reality, the left-liberal daily Der Standard believes: "With all their safety nets, parts of the European public sphere - particularly in the 'northern states' of Germany and Austria - can simply live according to the motto: 'Crisis, what crisis?' In truth however the plight of Greece, Portugal and Spain continues unabated. A generation without prospects is coming of age there. ... If things were done rationally, investors would soon have to withdraw their confidence in Athens, Madrid and Lisbon. But they're not, because interest rates in Europe and the US are currently next to zero and the central banks have pumped the financial markets full with liquidity. Investors are falling over each other for securities, regardless of what risks they conceal."

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