CdM | Economic growth in the Eurozone manufacturing sector continued to contract in July, and did so at the fastest rate since December 2012, according to the latest PMI index. Germany remained a source of weakness, registering its largest deterioration in 7 years.
Shaun Riordan │Many of us are already enjoying our summer holidays. Others are packing now, looking forward to relaxing on the beach, or in the mountains. Wherever we are taking our holidays we should make the most of them. A perfect storm is brewing which could hit Europe hard in the autumn, with devasting economic and political consequences.
Athanasios Dimadis and Pierre Moscovici | President Trump’s election marked a new turn in the US-EU relations. EU commissioner for economic affairs, Pierre Moscovici, did not shrink from using harsh language in the past to respond to President Trump’s comments about potential EU collapse. During the recent World Economic Forum in Davos, Moscovici suggested that the isolationist tendencies inherent in Trump’s “America First” approach could be countered by what he calls a “European way.”
J.L.M. Campuzano (Spanish Banking Association) | According to Eurostat, the business investment rate in the last quarter of 2016 grew to 23.5% from 22% in the previous quarter. We are talking about reaching pre-crisis levels.
Housing prices in the Eurozone rose 4.1% in the fourth quarter of 2016 from a year earlier, the highest interannual increase since the third quarter of 2007, according to Eurostat data. In Spain, the average rise in prices remained at 4.4%.
Peter Lundgreen via Caixin| What should be deeply worrying about the growing banking crisis in Italy is the origin of the non-performing loans. One significant sector is retail and wholesale, meaning it’s a widespread problem. A severe banking crisis is a shock for any economy and will, in many cases, hamper economic growth. This is the risk that Italy and the Eurozone are facing.
George Soros via Caixin | Europe’s leaders must seize the moment to push forward reforms that can reshape the EU into an organization that people want to be a part of. Until the British public voted to leave the European Union, the refugee crisis was the greatest problem Europe faced. Indeed, that crisis played a critical role in bringing about the greater calamity of Brexit.
Last week the Council decided that Spain and Portugal’s recent efforts to reduce deficit were not enough. This lead to the two countries being fined, the first time this happens since the inception of the euro.
The ECB’s main priority will be to fuel confidence in the financial markets and inflation will be its alibi for this. In February, eurozone CPI receded to -0.2% year-on-year and, in the short term, the region should be prepared for negative rates to continue.
The figures issued by the Bank of Spain have confirmed what we could already see with the naked eye; namely that Spaniards are losing their fear of the future and spending again. After several years of austerity, the consumers in Spain have gradually loosened their purse strings over the past year. And to such an extent that consumer spending rose 3.1% in 2015, almost tripling the 1.2% registered a year earlier.