“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.

EU’s problem is not in Germany but in France

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.

germany's market-focused?

Is Germany the euro’s owner?

MADRID | By Miguel Navascués | Nobody questions Germany’s big efforts in the EZ, but Spain accumulates an external debt of 100% of GDP as Germany accumulates capital abroad amounting for 100% of its. When a country does not cease to make external surpluses, it generates parallel deficits in others. These gaps are corrected by means of a rate exchange appreciation- depreciation or by reinvesting the surplus in the countries in deficit. Neither of which is happening today.

No Picture

Germany and Spain push EZ up

MADRID | By Julia Pastor | Germany and Spain are leading the Euro zone’s economic recovery from the EZ’s North and South, respectively. 1Q14 data point out the German economy grew by 0.8% and Spanish by 0.4%, while France’s GDP was flat and Italy, Portugal and the Netherlands went back to recession. Merkel’s following the EC recipes to increase wages and Rajoy’s reforms -despite a big, painful impact on the Spanish population- seem to have bear fruit.

No Picture

Time for ‘Draghilogists’

FRANKFURT | By Lidia Conde | Experts don’t agree about what can happen in the short and medium term in the Eurozone. The main critical voice is the president of Munich’s Ifo Institut, Hans-Werner Sinn, who believes that Europe is in a “resting phase” before the storm hits again. According to Germany, now is the time of the “Draghilogists”, i.e. those analysts who try to elucidate the ECB’s next step.

Industry wins in Germany’s energy transition

BERLIN | By Alberto Lozano | The German ambitious switch from nuclear and carbon-based energy toward renewables remains the biggest challenge for the first EU economy. The country’s industrial sector and consumers are worried about how much they will have to pay in terms of prices, competitiveness and jobs.

EURO ELECTIONS: Germany will win, no matter what -but does it care?

BERLIN | By Alberto Lozano | The upcoming EU elections (May 22-25) arrive in a moment of enormous challenges for the Union. What happens in the next months can change definitely the political and economic landscape. Again, Germany plays the main role with its 67 million of voters and the two ‘frontrunners’ supported by the two big parties from the German Coalition. However, 72% of its citizens have low or no interest in the polls.

ECB: Wait, wasn’t inflation target 2pc?

MADRID | By The Corner | “I would like to stress that the risk of a self-reinforcing deflationary downward spiral consisting of falling wages and prices, as evoked by some, is also low, despite the present, very low inflation rates in the euro area. These are mainly a result of falling energy prices and the adjustment process in crisis countries,” European Central Bank Governing Council member Jens Weidmann said on Tuesday, playing down deflation risk. Anyway, what happened with the ECB’s 2pc inflation target?

Angela' s lies

Angela’s little lies

BARCELONA | By Vinçent Navarro | Germany is not only about minijobs. Although Southern European economies are debating about this measure that Berlin took under Schröder’s government in order to tackle unemployment, much less is said about the German model or ‘Rhineland capitalism’, essentially based on works councils and co-management.