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Articles by JP Marin Arrese

About the Author

JP Marin Arrese
Juan Pedro Marín Arrese is a Madrid-based economic analyst and observer. He regularly publishes articles in the Spanish leading financial newspaper 'Expansión'.
ECB's upcoming tapering

In Europe 11th November 2014

QE fails to work in Europe

MADRID | By JP Marín Arrese | The inability to implement a common economic stance aimed at delivering growth and jobs in Europe is putting the onus on monetary policy. The ECB stands as the only hope for redressing a dismal state of affairs. Yet, such high expectations could prove ill-founded. While Draghi saved the Euro’s plight back in mid-2012, he now seems utterly helpless to prevent deflationary bouts looming on the EZ horizon. His quantitative easing (QE) plan, far from achieving its goal, has lost steam. Many observers have put the blame on the ECB’s reluctance to enlarge the asset basket it is currently buying, demanding fully fledged QE, which involves junior debt and sovereigns. Yet, the flaw might lie in Europe’s failure to fully profit from monetary easing.

draghi preocupadoTC1

Markets 7th November 2014

The ECB wait-and-see stance

MADRID | By J.P. Marín Arrese | The ECB Board only reached, on paper, the decision to keep unchanged its official rates. Yet, the statement issued as an introduction to the press conference clearly outlined, for the first time, both its policy stance and firm commitment to act should the economy markedly deteriorate. Draghi refrained from providing his personal views on sensitive issues, such as the scope of quantitative easing, sticking to the literal content of the agreed statement. No doubt, his communication strategy had come under fierce criticism from other members of the Board, utterly upset by his flamboyant style and contradictory messages.

No Picture

In Europe 6th November 2014

ECB: Draghi is bound to act

MADRID | By JP Marín Arrese | Recent events underline the extent to which low confidence is running throughout Europe. The expected upsurge has petered out and investors are losing all faith in political leaders’ ability to redress the situation. As countries seem unable to agree on a joint strategy to foster growth, the onus to achieve this goal increasingly falls on the ECB. Thus, Draghi is bound to act today in order to curb the downward sentiment. Yet, unleashing his firepower over the last months has led nowhere, save for running short on ammunition.

No Picture

Markets 5th November 2014

EU’s low growth hits financials

MADRID | By JP Marín Arrese | Central banks all over Europe bombastically hailed the stress tests results as solid evidence the banking system enjoyed enviable health. Their diagnosis utterly failed to impress the markets. Ten days later,  financials are plunging to fresh lows as low growth rates signify dire prospects ahead. Investors feel increasingly uneasy faced with dwarfish interest rates and dwindling intermediary receipts, leading to chronic underperformance and under-sized profits. Many fear that an inability to raise their own funds to plug gaps in their balance sheets might weigh on mounting impairment, sending shivers down the spine. Banks may face rough times ahead should deflationary bouts keep the European economy close to stagnation. 

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Markets 26th October 2014

Stress tests: Inconclusive EU banking probe

MADRID | By JP Marín Arrese | Most banks have comfortably overcome the stiff hurdles raised by the EU-wide stress test unveiled on Sunday. A reassuring outcome was widely expected, as Europe cannot afford to destabilise its financial sector when economic performance looks so grim. Yet, securing a fair result fails to endorse banking resilience should the underlying assumptions underestimate key risks. This shortcoming was evident from the start. For, the stress test builds on potential shocks failing to reflect key vulnerabilities, thus hampering its ability for properly assessing financial stability in rough times.  

 

mercados bolsa TC

Markets 16th October 2014

Markets run wild

MADRID | By JP Marín Arrese | Stock markets all over the world are plummeting while bond yields have regressed to fresh lows, as investors grow increasingly worried about growth prospects. Signs the US economy might be slowing down, coupled with the Eurozone plight, paints a gloomy scenario. Yet, the utter lack of direction in policies across the Atlantic stands as the most worrying concern. 

export

World economy 13th October 2014

Export-led economies lose steam

MADRID | By JP Marín Arrese | No need to wait for IMF forecasts. The hasty downfall in oil prices signals a steep deterioration in most export-led economies, ranging from China to Brazil. An upsurge in the US dollar coupled with prospects of more stringent credit conditions, are rapidly changing the global mood towards risk aversion. As hot money flees emerging countries bogging down their investment plans, main suppliers of capital goods such as Germany become increasingly crippled. 

No Picture

In Europe 9th October 2014

Eurozone: fundamental flaws

MADRID | By JP Marín Arrese | Potential mismatches between overall demand and supply can provide rather upsetting lessons. As Keynes proved, sticking to stability policies in a recession only widens the gap as slackening demand and production drag each other down in an endless spiraling circle. Moreover, he cast serious doubts on the strategy of combining loose monetary policy with balanced budgets  for putting the economy back on track. His liquidity trap theory mirrors Draghi’s current warnings on the ECB’s limits in coping with a huge GDP gap.