In Europe

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Spanish GDP: The crystal clear lie

MADRID | By Luis Arroyo | Spanish 1Q GDP was released on Friday. Data were shameful and let me explain you why: in order to reduce the public deficit, the government transfered 2013 4Q public spending to 2014 1Q. So these last numbers are those they had tried to hide under the carpet. In the graph above, the blue and line represent private and public consumption, respectively.


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ECB: When monetary policy involves exploration

BERLIN | By Jean Pisani-Ferry via Caixin | The small world of central bankers, market participants, economic officials and financial journalists is feverishly debating whether the European Central Bank (ECB) is about to embark, and should embark, on an unconventional monetary policy course. For the outsider, the whole discussion may look odd: Why has the issue become important? Hasn’t the ECB already embarked on such a course?


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Bank of Spain makes Sareb blush

MADRID | By Carlos Díaz Güell | The Spanish central lender ordered the national bad bank Sareb’s to assess the 107,000 toxic real estate assets again and 215,000 collaterals on loans that it purchased to the intervened financial entities. This new due dilligence ruined the work of 24 companies such as the property firm Richard Ellis, Clifford Chance’s lawyers and the consulting group KPMG.


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Draghi highlights credit constraints and risk of disinflationary expectations taking hold

LONDON | By Barclays analysts | ECB is going to cut its policy interest rate and/or announce targeted liquidity measures, with a view to support bank lending at the 5 June Governing Council meeting. In his remarks at the ECB Forum on Central Banking being held in Portugal, ECB President Draghi highlighted the risk of a negative spiral between low inflation, falling inflation expectations and credit for the euro area.


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IMF’s dual formula for Spanish SMEs: debt haircut & lower wages

MADRID | By Julia Pastor | The key for a Spanish sustainable economic recovery are the country’s SMEs. Considering they mean about 90% of the national corporate landscape, the IMF’s last report on Spain provides two main recipes for helping them survive: extending aids for insolvent companies, which would “preserve Spain’s strong payment culture,” and also increasing wages cuts.


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“Spain has been trying to be a good citizen by keeping the German bankers happy”

MADRID | By Ana Fuentes | Well-known U.S. economic theorist and financial strategist Michael Pettis believes the European project has a blatant, simple economic problem: Germany benefits from a weak euro while Spain suffers from a strong currency. As for the IMF’s recommendation of cutting wages in countries like Spain, Mr Pettis thinks it’s an absurd tip that can only make the global demand imbalance worse. He answered our questions via email from Beijing, where he is currently based.


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Elections results present fresh challenges for SYRIZA and New Democracy

ATHENS | By Macropolis | The final results from Sunday’s European Parliament elections confirmed that SYRIZA gained a victory of 3.9 percentage points over New Democracy but the outcome of the ballot left both parties with much to think about in the weeks ahead. SYRIZA attracted 26.6 percent of the vote, which is slightly down on its share of the vote in the June 2012 elections. New Democracy received 22.7 percent but pointed to the 8 percent that PASOK’s Elia alliance gained as evidence that the coalition retains a clear mandate to continue governing.


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European Elections: the dangerous rise of europhobia, disappointment and disaffection

The Corner Analysis | In the grim day in which the French National Front victory broke the expectations of a more united and strong Europe, Spaniards broke the bipartisan establishment for the first time in 35 years. Podemos, born from the Indignados (outraged) movement, was the biggest surprise in the political arena. Voters weary of austerity measures and corruption also punished the political establishment in Greece. Eurosceptics and xenophobe movements dangerously gained strenght in Denmark, Austria, Finland and the UK.



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EP2014: Abstention and skeptics posed to win

MADRID | The Corner | It’s not just another campaign carried out from and for the states or Brussels, but the first time the long-aspired EU political union will be really tested. The EP2014, world’s second biggest polls (India comes first) with +400 potential voters are taking place after the implementation for the first time of the Lisbon Treaty prerogatives. The effects of austerity measures and budget cuts are expected to have a great impact, and abstention may be the main winner, especially among the youngest, disappointed generation. Stay tuned!