Nick Ottens (Atlantic Sentinel) | After eleven years in power, Mark Rutte is suddenly vulnerable. The long-ruling Dutch prime minister won his fourth election in a row in March, but botched coalition talks have thrown doubt on his future. What started with suspicions Rutte had tried to get rid of a critical lawmaker turned into a wider question about his credibility. But discontent in other parties about Rutte’s longevity also plays a role. Before I dive in, let me remind you I’m a member of Rutte’s political party and voted for him in March. So this is not going to be an unbiased analysis, and the reason I’m publishing it as an opinion story…
Gemma Cairó i Céspedes (University of Barcelona) | A few weeks ago, a group of prestigious economists addressed a proposal to the ECB. In it, they called for the restructuring of the Eurozone countries’ public debt and proposed the need for the ECB to write off their public debt (or swap it for perpetual debt). Although it is true the Treaty of the European Union explicitly forbids the ECB from financing governments, it does not express explicitly that debt restructuring is not possible.
Andreas Baur, Lisandra Flach and Feodora Teti (Ifo Institute ) | Mercosur, one of Latin America’s most ambitious economic and political integration projects, celebrates its thirtieth anniversary on March 26, 2021. The fact that the member countries Argentina, Brazil, Paraguay and Uruguay have little reason to celebrate is not only due to the Corona pandemic. The disappointment about the slow progress with respect to integration is widespread among members, and the future of Mercosur seems more unclear than ever.
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.
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.
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%.
Hans-George Betz (Via Fair Observer) | There is an unwritten rule in politics: If you are incompetent, at least you should not be corrupt. It seems nobody ever informed the German Christian Democrats that this was the way of things. How else to explain why Christian Democratic MPs thought it was perfectly fine to take advantage of Germany’s COVID-19 crisis to line their own pockets? In German, we have a word, “Raffzahn,” to refer to somebody who cannot get enough, never satisfied with what they have. In the concrete case, a member of the German Bundestag from the Christian Democratic Union (CDU) pocketed €250,000 ($298,000) in commissions for brokering a deal involving the procurement of FFP2 face masks by the federal and the state governments.
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”.
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.
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.