From 2019 it is possible that Spain will have difficulties financing its public debt, which is definitely not only the official figure of 98.3% of GDP. Rajoy’s increase of this debt by €649 billion has been financed at very low interest rates, thanks to the ECB’s quantitative easing. On the other hand, Pedro Sánchez has announced substantial spending increases, which will inevitably increase debt in 2019.
The twentieth anniversary of the creation of the ECB coincides with renewed financial tensions in the Eurozone. According to Caixa Research, the irreversability of the single currency requires ambitious advances in the European project.
For a long time, Spain has had a “debt pending” in terms of budgetary stability. And, for the time being, the current scenario leads us to think that balancing the public finances is a difficult objective to achieve in the medium-term. Added to that problem is the high level of government debt.
Francisco Vidal | The demand for credit from households continues to rise in the EMU and, in particular, consumer credit. Entries for lending of M3, once the figures have been seasonally-adjusted and the effect of certain changes in the perimeter have been factored in, showed that loans to households are growing at a rate of 3.0% annually, led by those earmarked for consumption (+ 7% annually)
J.L.M. Campuzano | Financial integration is a relevant factor for financial stability and facilitates the transmission of monetary policy. A few days ago, the ECB published an update on financial integration.
Miguel Navascués | When the signs of an incipient slowdown in the European economy begin to multiply – the matching indicators suggest that industrial production slowed in 2018 – the case for reaching an agreement on Brexit and refocusing attention on unifying the capital markets becomes increasingly more powerful and urgent.
Yesterday, April 19, after being flat for months, with no pulse, the Euribor finally showed signs of life. It moved from the range of -0.190% (average for April) to -0.189%. One basis point.
Javier Arce | The ECB does not get the banks to move their money, interbank market is still broken and eurozone lenders are accumulating the ECB’s liquidity injections (almost 700bn) at the central bank itself.
The Spanish government has this week officially announced the candidacy of Economy Minister Luis de Guindos for the Vice-Presidency of the ECB, substituting the Portuguese Vitor Constancio. De Guindos already tried to move to Brussels as a substitute for Dijsselbloem at the head of the Eurogroup. But the bet didn’t turn out well.
Spain’s government bond rating has been upgraded by Fitch to A- from Baa+, Greece has also seen the rating lifted by Standard &Poor’s, and the US once again experiences a shutdown of non-essential government operations. The biggest topic for the bond market, however, will be the press conference of the European Central Bank (ECB) scheduled for Thursday.