LONDON | The temptation to leave the battered ship adrift of the European Union increases by the hour in Downing Street, amid the silence of the opposition and the business community. If Brussels and Berlin arouse disaffection among their close partners, what would you expect from London?
Spanish current account data gives signs of economic strength, but the global economy suffers from too much weak activity, a clear threat to Madrid’s reform efforts. Talk of bailout will not go away any time soon.
Philipp Rösler, vice chancellor and federal minister of economics and technology of Germany, used Tuesday in London some of the toughest language in defence of further austerity for the euro zone.
“I have to admit that I’m not an expert of internal politics within Spain. However, I’ve been led to believe that it is a very remote possibility to think that Catalonia could actually go independent from Spain,” says the lead portfolio manager of the £470-million Royal London European Growth fund, Neil Wilkinson.
Although German banks’ regulatory capitalisation hardly makes news, the latest report on the industry by risk qualification agency Moody’s points at high leverage and exposures worth noting down.
Non-resident investors have extended the maturities of their holdings of Spanish debt, according to the August data released by the Bank of Spain.
LONDON | Changes over core capital reserves would have turned British banks less transparent about their actual financial stand, JP Morgan analysts alert. Also, growing risk of impending payouts because of mis-sold payment protection insurance could affect their stock price sooner than later.
The day a new EU summit began, financial reports from Madrid poured in with a common alert: the Spanish economy needs fixing and the markets will keep watching how the Rajoy government’s reforms advance.
Analysts at Barclays pointed at the already noticeable slow down in company investment to alert about future job creation data. The US could be in for a nasty surprise: something to do with the “fiscal cliff”.
The bailout that would await the Spanish government’s request is surrounded by many suppositions over its conditionality and how the rescue fund would intervene. But the recent decision of Moody’s keeping Spain’s bonds on investing grades has made investors feel more confident.