Milton Friedman once wrote (1969) something like a short story about money creation. A helicopter drops banknotes amongst the population: a few lines in an article on how ‘to create’ inflation when the economic policy measures are thought to be exhausted.
Francesco Saraceno | According to Wren-Lewis, central banks were not involved in the push towards fiscal consolidation, and their “only” sin was of not being vocal enough. I think he is too nice. At least in the Eurozone, the ECB was a key actor in pushing austerity.
UBS | As expected, yesterday’s ECB meeting provided neither new stimulus nor major new guidance on the policy outlook. The discussion was dominated by helicopter money (which according to Mr Draghi has not been discussed), the German criticism of the ECB’s low interest rate policy (which Mr Draghi diplomatically rejected) and the issue of whether or not interest rates could go down further (which could happen, if necessary).
Francesco Saraceno | I computed real GDP of the periphery (Spain-Ireland-Portugal-Greece) and of the core (Germany-Netherlands-Austria-Finland), and then I took the difference of yearly growth rates in three subperiods that correspond to the run-up to the single currency, to the euro “normal times”, and to the crisis.
Iceland is far from being corrupt in the sense that really corrupt countries are – judges and other public officials are not on the take, no such indication. But nepotism is a breeding ground for the kind of corruption that money bring.
BofAML | No surprises. We do not expect any ECB action this week. After the package in March, we think the ECB will have a few months before going back to the drawing board. Dovish Fed tones and EUR appreciation do not help the ECB, but action beyond a reiteration of forward guidance seems very unlikely.
Nick Malkoutzis via Macropolis | In the shapeshifting world of Alexis Tsipras, it is difficult to know where things actually stand. His relatively brief time in power is littered with skins that have been shed and vows that have been broken.
Many countries refused to contribute to the European community’s handling of the crisis and, left on her own, Merkel explains: “We hope that once there is peace you will be able to return to your country”.
AXA IM | A number of political developments are likely to trigger volatility in 2016, especially around the month of June. However, the real risk lies in the longer term. For the first time since the 1950s, EU- scepticism is threatening the European project not just to stall, but to step back. Political risk in the euro area has taken a backseat in recent months.
Francesco Saraceno | Last week the ECB published its Annual Report, that not surprisingly tells us that everything is fine. Quantitative easing is working just fine (this is why on March 10 the ECB took out the atomic bomb), confidence is resuming, and the recovery is under way. In other words, apparently, an official self congratulatory EU document with little interest but for the data it collects.