BERLIN | Alberto Lozano | While German Finance Minister Wolfgang Schäuble preaches public budget consolidation all around the Eurozone, some Länder don’t seem to be taking his prescriptions seriously. Their deficits continue to grow in 2014 and moving away from the zero deficit goal in 2020 as required by the country’s constitution.
MADRID | The Corner | The rise of the far-right Front National will harm more the European project than any economic recipe imposed from Berlin. In the end, Germany is indeed setting hard conditions for the EU integration, but at least is favoring it, whereas France’s Marine Le Pen has a clearly anti European speech and intends to bring power back to the countries.
MADRID | By Jaime Santisteban | The most critical voice about the ECB’s doing something about the euro zone’s persistent low inflation, Bundesbank President Jens Weidmann, said on Monday that the ECB will watch the euro’s exchange rate closely before taking policy decisions. Also, AstraZeneca turned down the allegedly “last” bid offer from Pfizer, worth €8bn.
MADRID | By Jaime Santisteban | After the WSJ reported that a Bundesbank source confirms the entity would support stimulus measures from the ECB in June, analysts breathed and started making their polls. How big will that support be?
Also, Madrid’s financial circles are debating on the decision of the government selling inflation-linked bonds next week for the first time. Inflation being at record low levels, the decision is not obviously opportunistic, experts commented. Spain wants to look for more public funding options, and this issuances that guarantee the purchasing power of are usually carried out by France, Germany and Italy, as well as the US.
MADRID | By Julia Pastor | European sovereign bonds markets have put some champagne bottles on the fridge for next neek in the case the ECB decides to inject some stimulus on the euro zone at last. Without setting a precedent, president Mario Draghi and Bundesbank’s head Jens Weidmann seem to bring their positions over the mechanism closer. This change of direction led Spanish 10-years bonds to 2005’s minimum yields of 3.27% and was behind the successful issue of Italian public Treasury, which sold €2.5 bn at also very low prices. Just Greece’s bonds are trending downwards.
MADRID | By Jaime Santisteban | Spanish government plans to create a state firm to house the failed toll roads, which will issue a 30-year bond of around 2.3 billion euros to pay the motorways’ debt. Also, creditor banks will be forced to accept a 50 percent haircut. In this regard, analysts at ACF and Sabadell don’t expect a considerable harm on licensed building companies’ share price.
MADRID | By Julia Pastor | The Bundesbank must be really worried about euro zone’s economy evolution. The German central bank’s chairman Jens Weidmann, paradigm of the country’s economic orthodoxy, opened the door to an ECB’s eventual bond purchase program for the first time in order to fight against common currency’s appreciation and the ghost of deflation. Furthermore, the German economy, strongly linked to Ukrainian interests, could suffer a downturn in the 2Q14, according to Bundesbank’s estimations. Meanwhile, the ECB could be studying some operational and legal points to start the stimulus program.
MADRID| By Julia Pastor | German families are the largest savers in Europe but their banking deposits are not profitable enough in the current context of low interests rates. As a consequence national housing market is living a boom with an overvaluation between 10-20%, and reaching 25% in some capital cities such as Berlin or Hamburg. Does the word “bubble” suit these figures?
MADRID | By Luis Arroyo | ECB’s policies have damaged more than helped the European economy. After all, the FED has managed to steer the US towards the path of growth, while the ECB is unable to make its policies work. But the truth is, they are not entirely the ECB’s but the Bundesbank’s procedures commanded by Ms Angela Merkel.
MADRID | By Luis Martí | What is worrying is the Bundesbank attitude of permanent and frank opposition to the initiatives of the ECB to overcome the crisis, being against any flexibility and realism that the economy is needing.