Yiannis Mouzakis via Macropolis | Following an 11-hour Eurogroup that brought back memories of other classic encounters between Greece and its lenders, an agreement was reached to disburse 10.3 billion euros from the programme’s financing in two tranches – next month and in September – as the much-contested debt issue was put on the table.
via Macropolis | Neo-Nazis marching through the streets of Sweden, the far-right making its political presence felt in Austria, a beefed up military and police presence on borders in many parts of Europe and stinging criticism on moral and legal grounds of the “one in, one out” agreement with Turkey from human rights groups – these are just some of the signs of the existential crisis that the European Union is experiencing.
The migrant crisis has taken over German politics, although it is just one of the many issues concerning the European central power. The future of the euro is still pending. But some economists believe that the right-wing AFD party’s demand for the European process to be stopped is nonsense.
BoAML Research | The German government has not been overly active in investment expenditure over the last couple of decades. The average share of gross government investment spending in GDP stood at 2.1% in 2015 – private investment was worth roughly 18% of total GDP.
Guntram B. Wolff via Caixin | G-20 ministers in Shanghai appeared to be aware of the importance of structural work. In particular, there was agreement in our panel discussions that the Base Erosion and Profit Shifting (BEPS) project of the OECD was an essential element to deal with tax avoidance and ensure that profits are taxed where economic activity generating it takes place.
The refugee crisis shows no respect for pacts. Not even the stability pact, which is difficult to enforce when many countries vote for change facing an economy without growth. It’s easier to wait for money from heaven.
The European Banking Authority (EBA) has finished defining the nature of the stress tests, as well as the scenarios the 51 largest European banks will be subject to in 2016. But given the situation of the Italian and German lenders, after the last stress test, there are more and more people who believe there is a certain amount of complicity going on to hide the real situation of many of the banks in both countries.
Nick Malkoutzis via Macropolis | As symbols go, the imaginary pig’s head in William Golding’s Lord of the Flies requires little explanation. Its meaning is summed up in one line of the unnerving classic. “Fancy thinking the beast was something you could hunt and kill!” says the fly-infested head. “You knew, didn’t you? I’m part of you?”
Germany has a very broad history in government coalitions. So is there anything in its formula that makes it exportable to other parts of the world, including Spain? Whatever happens in Germany in the coming months, there are a couple of points worth taking into account.
Julius Baer Research | Yields of German 2-year and 5-year government bonds are down to -0.55% and -0.36%, respectively, testament that the market is not expecting the G20 finance ministers and central bank governors to hammer out a global deal against falling interest rates.