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European economy

Turkiye central.bank

European economy 24th March 2021

Turkey: Persistent Challenges In Monetary Governance Increase Risk To Macroeconomic Stability

Scope Ratings | The dismissal of central bank governor Naci Ağbal worsens the crisis of confidence in Turkey’s monetary policy, further undermining macroeconomic stability. This is credit negative for Turkey’s B/Negative sovereign ratings. Saturday’s announcement of the sudden change in central-bank leadership, shortly after a market-friendly, above-expectation 200bp tightening of rates on Thursday, underlines Recep Tayyip Erdoğan’s wish for looser monetary policy in support of unsustainably high growth.

Germany

European economy 23rd March 2021

The Illusion Of Wealth In Germany: Rich Country, Poor Country

Lidia Conde | The Germans are champions at saving money. In 2020, 330 billion euros. But 41% of citizens have less than 10,000 euros of wealth. Per household, the median wealth amounted (median) to 119,100 euros in Spain, 132,200 in Italy, 117,900 in France and 71,100 in Germany. In the eurozone, 99,400. These are ECB data.

European banks1

European economy 17th March 2021

Dividend Reactivation In European Banks, Some Offering Yields Above 10%

Comments on dividends and buybacks for Q4’21 have dominated the publication of banking sector results. Although regulatory restrictions still apply, most banks want to compensate their shareholders for the dividends they did not pay through special dividends and buybacks in Q4’21. This will result in high payouts at the end of the year. So far, dividend futures of December 2021 STOXX Banks EUR Price index are up 55% year- to-date versus the index which is up 12%.

green new deal

European economy 11th March 2021

EU Investors To Report How Sustainable They Are

Asset managers, pension funds, insurers or investment advisors in the European Union (EU) will be obliged to report how they assess the environmental and social sustainability of their products. And when they claim to have a green strategy, to justify it. This is required by the regulation on sustainability disclosure in financial services that came into force on Wednesday and seeks to prevent so-called “greenwashing”, whereby investments not actually climate-friendly are labeled as “green”.

Fed ECB

European economy 10th March 2021

Fed Memo To The ECB: “My Rates, Your Problem”

Bruno Cavalier (Oddo BHF) | There are two types of central banks in the world. On the one hand, those who believe that the recent rate hike is widely justified. This is the case for the Fed, at least so far. On the other hand, those who think the opposite. This is the case of the ECB, which is exasperated to see European rates rising, not as a sign of a solid recovery, but because of the contagion of the US bond correction.

huawei 5G Europe

European economy 7th March 2021

Beijing’s Inroads Into European Infrastructure Go Far Beyond Huawei And 5G

European Views | A growing number of EU countries are voicing their concerns over Beijing’s increasing leverage as Chinese companies gain footholds in a number of essential European sectors. The Finnish intelligence community recently raised particular concerns about Huawei’s involvement in 5G networks and claimed that China & Russia are “trying to get hold of Finland’s critical infrastructure”. Dutch intelligence services, meanwhile, released a report last week arguing that Chinese cyber-espionage might pose an “imminent threat” to Dutch national security interests, particularly in key sectors including banking, energy and infrastructure.

Bundesbank

European economy 5th March 2021

Bundesbank: No Profit Distribution For The First Time Since 1979

The Bundesbank, Germany’s central bank, will not distribute any profit to the Federal Government for the first time since 1979, following the noticeable impact that the emergency monetary policy measures implemented in response to the pandemic had on the bank’s balance sheet, which substantially strengthened its risk provisions. The German central bank’s net interest income in 2020 fell by 38.2% to €2.87 Bn, while it posted losses of €1.557 Bn for financial operations and risk write-downs against the profits of €2.281 Bn in 2019.

rishi sunak

European economy 4th March 2021

Budget 2021: Strip Away Pandemic Largesse And UK Is Banking On Recovery With No Extra Public Spending

Steve Schifferes via The Conversation | What a difference a year makes. In March 2020, the chancellor of the exchequer, Rishi Sunak, announced an emergency budget pledging £12 billion to tackle coronavirus. One year later, the government has already spent £280 billion, and spending by spring 2022 will exceed £400 billion. The 2021 budget – perhaps the most widely leaked in history – contains a cornucopia of short-term measures, such as the extensions to the furlough scheme and to the VAT cuts for hospitality. 

vaccine passport

European economy 26th February 2021

Pharmas To Produce 10 Bn Doses Of Covid-19 Vaccines By 2021, As EU Plans Vaccination Passport For The Summer

News about vaccines against coronavirus and the progress of vaccination campaigns globally are coming thick and fast. The production of vaccines is rising significantly as companies are working in shifts of 24 hours a day, seven days a week, said the pharmaceutical industry association Ifpma. On the other hand, the EU leaders have passed the creation of a digital vaccination certificate in order to exempt travelers from restrictions such as quarantines or PCR tests, an essential aspect in order to boost tourism. 

US against Europe

European economy 25th February 2021

Between Europe And US…Clearly Europe

Morgan Stanley | The size of the Recovery Fund is very relevant, equivalent to 5% of the European Union’s GDP (10-15% in Greece, Spain and Italy). In contrast to the US, where the fiscal stimulus has been earmarked for more immediate/current spending, in Europe most of it is devoted to future investment with a long-lasting effect over the next 3-5 years. This long term duration is the key concept and the fundamental reason for our preference.