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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'.
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World economy 3rd October 2014

Why Draghi failed to convince the markets?

MADRID | By JP Marin Arrese | The crash in stocks all over Europe vividly showed how bitterly Draghi’s asset-buying plan disclosed yesterday disappointed investors. Yet, his introductory statement was widely in line with expectations. He broadly delivered last month promise to cash ABS and covered bonds issued by banking institutions, so long as the assets met the standard collateral requirements for  ECB facilities. He even took a step forward by extending eligibility to lower than senior debt, the so-called mezzanine tranche. Furthermore, he provided firm assurances the plan would  be in place for two years. What turned so utterly wrong? Undoudtedly, the ensuing press conference unfolded into an unmitigated disaster.

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Spanish economy 1st October 2014

An overly optimistic 2015 Spanish budget

MADRID | By JP Marín Arrese | The Spanish Budget  2015 aims at delivering growth and jobs. Yet, the draft disclosed on Tuesday shows the limited scope for enforcing such a goal. The foreseen improvement in the economic environment would increase available resources through enhanced taxable income,  a shrinking in unemployment and the debt-servicing bill. The Government intends to use the extra margin of manoeuvre to lower personal income and corporate taxes while increasing public investment. Yet, the amounts at stake hardly represent any sizeable boost for GPD. 

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In Europe 23rd September 2014

Is low inflation to blame for Eurozone woes?

MADRID | J.P. Marín Arrese | Eurozone policy makers depict sluggish growth and low inflation as two sides of the same coin. This approach fails to grasp the subtle distinction between the two. Muted inflation undoubtedly stems from faltering demand linked to current stagnation. Yet it also reflects the ongoing real adjustment. Reviling it as the main wrongdoer, rather than treating it as a collateral victim, utterly misses the point in enforcing effective policy.

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In Europe 22nd September 2014

Scotland wins the day

MADRID | J.P. Marín Arrese | Heavy turnout in the Scottish referendum ensured a clear victory for those rejecting independence. Yet, a huge share of citizens showed their readiness to switch-on the atomic bomb, regardless of the awesome consequences. 

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In Europe 18th September 2014

Salmond wins the day

MADRID | By J.P. Marín Arrese | Bets heavily lean on the No campaign snatching victory tomorrow from the jaws of defeat in the Scottish referendum. Trust professional gamblers for picking out the winning horse. The prospects of a yes vote on independence have suddenly started to look dim. 

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Companies 16th September 2014

El Corte Inglés & the business model that looks set to be consigned to history

MADRID | J.P. Marín Arrese | Chairman Isidoro Alvarez’s death this week has commanded widespread emotion. He embodied El Corte Inglés’ soul, leading it to become Europe’s largest department store.  Thanks to formidable growth, coupled with a unique business model, Alvarez sought and implemented widespread changes to company practice from the 90,000 strong work force, thorough his personal commitment to the firm. In exchange, he preserved full employment even when faced with dwindling sales during the crisis. He also drove a fully self-financed expansion, ruling out indebtedness and support from capital markets. 

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Markets 15th September 2014

Santander’s governance deficit

MADRID | By J.P. Marín Arrese | Only a few hours following the death of former Santander chief Emilio Botín, his daughter Ana Botín was thrust into the spotlight as his replacement. This offered further proof -if it were needed-  of the firm grip on the Board of Directors which the family continues to hold. Its stake, reckoned to stand at less than 1%, has not prevented the swift transition from taking place.

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Markets 10th September 2014

The ECB turns into a massive backstop

MADRID | By J.P. Marín Arrese | The ECB asset purchases drive has received staunch support from the financial markets. No wonder, as it turns the central bank into a huge and largely undemanding backstop. Under the covered bond programme, it will switch banking liabilities into fresh liquidity. The ABS purchases scheme will transfer loan portfolio exposure to the ECB. Overall, both measures amount to a solid backstop for redressing banking solvency. The move comes most timely, as stress tests and asset quality reviews are due shortly to be published.

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In Europe 5th September 2014

The ECB failing to convince needs to act

MADRID | By JP Marin Arrese | Ever since Alan Greenspan moved at will financial markets behaviour, simply by talking up or down either expectations or exchange rates, central bankers have tried to follow suit. For all his merits, Mario Draghi lacks Greenspan’s skills. Even if he commands enough fluency in English, his messages sometimes are utterly ill placed. Yesterday’s underperformance in his press conference showed it vividly.

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Markets 4th September 2014

QE gathers momentum

MADRID | By J.P. Marín Arrese | Mario Draghi’s anxious call to governments, urging them to put the house in order by implementing a combined economic and monetary policy, seems the right course of action. Deflationary risks run high as prices fall well behind the medium-term target. Once again, the Eurozone seems stuck as the growth prospects dwindle. Nothing new, as its appalling record during the crisis shows. Filling gaps through moral lessons, instead of money, hardly solves deeply entrenched problems.