Top Stories

In Europe

No Picture

In Europe 12th November 2014

Eurozone crisis: “Everybody´s talking” (except about money)

SAO PAULO | By Marcus Nunes via Historinhas | In “What caused the great recession in the Eurozone? What could have avoided it?” Philippe Martin and Thomas Philippon begin thus: There is a wide disagreement about the nature and cause of the Eurozone crisis. Some see it as driven by fiscal indiscipline, some emphasise excessive private leverage, while others focus on external imbalances, sudden stops, or competitiveness divergence due to fixed exchange rates, as the following quotes illustrate.

cataluña independenciaTC

In Europe 11th November 2014

Catalan Independence drive defying reality

MADRID | By Sean Duffy | This weekend´s controversial “non-binding consultation” has caused quite the stir in international media over the past number of days. Reports asserted that 80 % of Catalans had voted in favour of Catalonia becoming an independent state. Yet that figure ignores almost 60% of the electorate who chose not to take part in Sunday´s vote. Those numbers point to a rather more nuanced narrative than the one currently being posited by the Catalan independence movement and many reporters.

ECB's upcoming tapering

In Europe 11th November 2014

QE fails to work in Europe

MADRID | By JP Marín Arrese | The inability to implement a common economic stance aimed at delivering growth and jobs in Europe is putting the onus on monetary policy. The ECB stands as the only hope for redressing a dismal state of affairs. Yet, such high expectations could prove ill-founded. While Draghi saved the Euro’s plight back in mid-2012, he now seems utterly helpless to prevent deflationary bouts looming on the EZ horizon. His quantitative easing (QE) plan, far from achieving its goal, has lost steam. Many observers have put the blame on the ECB’s reluctance to enlarge the asset basket it is currently buying, demanding fully fledged QE, which involves junior debt and sovereigns. Yet, the flaw might lie in Europe’s failure to fully profit from monetary easing.

ReinoUnido contentoTC

In Europe 10th November 2014

UK: let’s be more British, please

LONDON | By Víctor Jiménez | Raise the main interest rate? Certainly not. Or not yet, anyway. While the US economy is not showing clear signs of having overcome the assisted breathing phase (i.e. printing money or the recently wound up phase of quantitative easing that the Fed finished two weeks ago), the chances are that the Bank of England will keep the price of the pound at a very low level. 

inflation ECB

In Europe 6th November 2014

ECB endorses balance sheet target

MADRID | The Corner |  As expected, the ECB’s Governing Council left the policy rates and the ABSPP, CBPP3 and TLTRO programmes unchanged and expressed its endorsement for increasing the central bank’s balance sheet to its size at March 2012, that is, around €3Tr. Draghi explicitly pointed out that they would evaluate further measures in case that the current purchase programmes are not enough to expand the balance sheet or if the EZ inflation outlook worsens. With policy rates at the zero bound, pressure is mounting on the central bank to act.

luxleaks

In Europe 6th November 2014

Luxleaks: the hunter becomes the hunted

MADRID | By Ana Fuentes | Not an easy week for Jean-Claude Juncker. As the new head of the European Commission he is in charge of fighting flaws in corporate taxation in Ireland, the Netherlands and Luxembourg. And yet, he now has to explain how 340 multinationals avoided or potentially avoided millions of euros in tax thanks to signing secret sweet deals with Luxembourg during the 18 years he was the president of this country. The Luxleaks, revealed by the International Consortium of Investigative Journalists (ICIJ) investigation, points to outrageous tax avoidance schemes… which are completely legal.

No Picture

In Europe 6th November 2014

ECB: Draghi is bound to act

MADRID | By JP Marín Arrese | Recent events underline the extent to which low confidence is running throughout Europe. The expected upsurge has petered out and investors are losing all faith in political leaders’ ability to redress the situation. As countries seem unable to agree on a joint strategy to foster growth, the onus to achieve this goal increasingly falls on the ECB. Thus, Draghi is bound to act today in order to curb the downward sentiment. Yet, unleashing his firepower over the last months has led nowhere, save for running short on ammunition.

No Picture

In Europe 6th November 2014

ECB has some Aces up its sleeve yet, but what about Draghi?

MADRID | The Corner | According to CMC Markets’ analysts, “none of this week’s data from Europe has done anything to persuade markets that the European Central Bank won’t ultimately be forced into taking further action to help boost economic growth in the euro area at some point in the next few months.” Be that as it may, the Governing Council of the ECB will meet on Thursday to keep on working on the EZ economic recovery. Experts at Link Securities say that there won’t be any new measures for the monetary policy, although they believe Mr Draghi will announce the possibility of taking new actions to boost growth.

europa triste lluvia recursoTC

In Europe 5th November 2014

Spanish banks: Expectations get more complicated after eurozone’s slump

MADRID | By Francisco López | The Spanish banks performed well in the latest stress tests. All in all, they achieved acceptable results for the third quarter of 2014. The problem, say the experts, could arise in the  months ahead: the European Commission has drastically reduced its forecasts for the  eurozone’s main economies,and as everybody knows, growth is essential for  banking activity.