Nick Malkoutzis via Macropolis | The stock phrases came thick and fast after Monday’s Eurogroup. “Great progress,” “very close” and “an agreement in a few weeks” were a few of the perennial quotes trotted out again by officials following a failed attempt to settle differences over Greek debt relief.
The damping of the refugee crisis and the strength of the economy have weakened German voters’ desire for a radical change. If Angela Merkel is re-elected as chancellor, the financial markets are likely to function normally.
The annual growth rate of the outstanding balance of securities representative of the debt issued by Eurozone residents has slowed, rising 1.4% in March compared with a previous 1.3%. As far as the outstanding balance of listed stocks goes, this grew 0.9% in March compared with 0.7% in February.
France has a financial system worth seven billion euros, compared with Germany’s four billion or the Spanish financial system’s three billion (because of Santander and BBVA). But the Bank of France’s balance sheet is supported by the CFA franc.
The possibility of a measured change in the ECB’s language, focused on the analysis of risks and the re-affirmation of its confidence in the recovery scenario, make more sense after seeing the minutes of the central bank’s April meeting. But this change is not expected until after the summer, with the September meeting seen as the big date in the diary.
Nick Ottens via Atlantic Sentinel | British prime minister Theresa May has adopted a policy her Conservative predecessor, David Cameron, once described as “nuts”. When the opposition Labour Party proposed to freeze electricity rates in 2013, Cameron, then the Conservative Party leader, ridiculed it.
Italian elections are likely to represent the next main European political risk. With anti-establishment sentiment running high and the euro increasingly seen as a major contributor to Italy’s structural problems, both themes will feature prominently in the campaign ahead of the next election.
Making democracy work certainly is no mean task but one way of understanding the victory of Emmanuel Macron in France is reason beating irrational fears. Or as Macron himself has said: you convince people “by speaking to their intelligence.”
A political risk scenario is not taking shape in Europe, but that doesn’t mean there are no problems. They are still there and in France they will rear their head under the concept of “cohabitation.” The new president of the French Republic, more than likely, will have to live with the National Assembly being dominated by the traditional parties.
Emmanuel Macron’s success in the presidential elections has alleviated fears France might fall into the black pit of extremism. But he faces the huge task of delivering growth by sweeping reforms while preserving most of the current social model. A task that will prove elusive unless he secures solid parliamentary backing.