The conservative members of Angela Merkel’s Christian Democratic Party (CDU) do not understand that she does not want to put a limit on the number of refugees. And now even her coalition partner in Berlin, the Social Democrats, criticise her for underestimating the scale of the challenge. So to what extent will Merkel be able to impose her ideas? Who can replace her? Is it a viable proposition to integrate all asylum seekers who arrive in Europe?
The European Fund For Strategic Investments (EFSI), better known as the Junker plan, was marketed as a “strategic” investment plan which would create jobs and infrastructure and, moreover, would not cost anything.
James Alexander via Historinhas | Of course we welcomed Mr Draghi’s willingness to ease monetary policy announced with at the January ECB meeting last week. And we recognised the positve impact on markets and therefore on NGDP expectations. But was this just a stopgap response to a poorer negative trend?
Nick Malkoutzis via Macropolis | Looking back on it, there was strong evidence to believe one year ago that SYRIZA was doomed from the start. Forget its inexperience, cast off its ideological straitjacket and ignore the factors that had stacked up against the new government (diminishing liquidity, weak banks, fragile economy and sceptical lenders): these were all signposts pointing towards Alexis Tsipras crashing into the wall, but it was the campaign slogan for the January 25 elections that really gave it away.
The ECB has committed to reviewing its monetary policy at its March meeting, leaving the door open to implementing any (monetary) instruments it has at its disposal. Thus the central bank is acknowledging the increasing downside risks and the deterioration in inflation, failing to meet end-2015 expectations and discounting low or even negative CPI rates in the European Monetary Union over the coming months. But the question now is whether its commitment will satisfy the markets.
The Italian banks’ share prices have taken a beating recently on rumours – partially confirmed – that the ECB has contacted some of them regarding their bad loans. And now some of Spain’s domestically-focused lenders are suffering from a contagion effect, posting losses and underperforming as the scepticism spreads to their own NPLs situation. Banc Sabadell analysts highlight that “the risk of the ECB introducing new provisions or reclassifying NPLs would, in general, not make a lot of sense.”
Francesco Saraceno | The EMU policy debate in the past few months kept revolving around monetary policy. Just this morning I read a Financial Times report on the never ending struggle between hawks and doves within the ECB. I am all for continued monetary stimulus. It cannot hurt. But there is only so much monetary policy can do in a liquidity trap. I said it many times in the past (I am in very good company, by the way), and nothing so far proved me wrong.
According to Eurostat data, Spain’s tax burden in 2014 was lower than in other big European economies like Germany, Italy, France or the United Kingdom, and 6 percentage points below the European average.
Maxime Larivé | With the rise of the far-right, national politics will certainly have their say on international relations in Europe. It has become routine for analysts to identify issues and threats that may occur throughout the next 12 months. And every time, experts underline how futile such an exercise can be.