BERLIN | By Alberto Lozano | The debate continues. Paris demands more flexibility, more time and investments in Germany. Berlin says investment will be strengthened, but France cannot cheat and must start with the reforms.
ATHENS | By Manos Giakoumis via MacroPolis | Greek banks are always at the forefront of domestic market developments. Despite the strong rebound of 6.4 percent on Friday, their shares still recorded cumulative losses of 7.8 percent last week and 23.9 percent over the past three months. Concerns about the outcome of the upcoming comprehensive assessment European Central Bank are one of the key factors weighing on investors’ minds.
SAO PAULO | By Marcus Nunes via Historinhas | Tim Worstall comes out and calls a “spade a spade” in “Europe Doesn’t Have A Debt Crisis, Europe Has A Monetary Crisis”: The stock markets plunge over concerns about the eurozone; there’s a flight from lower quality sovereign bonds; Greek, Spanish and other periphery bond yields spike. It looks like the eurozone debt crisis is back. But this time around we really should get to grips with the fact that what we’ve got here is really not a debt crisis.
MADRID | The Corner | Winter’s coming and Europe finds itself in a complicated position. The (declining) production of the continent’s energy import has traditionally fallen short of (growing) consumption . In 2012, 53.7% ofEurope’s energy consumption was based on imports – up from in 44% in 1996, according to UBS. Brussels admits the share of imported energy is likely to rise to 100% in oil and above 80% in gas by 2030.
MADRID | The Corner | The eurozone’s inflation slipped in September to its lowest level since October 2009 (0.3%), raising fears of an eventual third recession in six years. Prices have been now been in the ECB’s “danger zone” of below 1% for 12 consecutive months. And yet Germany, the biggest economy in the EZ, is torn between deficit control and growth, relieved with a weak euro helping its exports but worried about the same depreciation policy leading to less pressure to implement reforms in countries like France.
MADRID | By Sean Duffy | The Irish Government presented its budget on Tuesday, keen to present the announcement of its projections for the year 2015 as the successful consequence of prudent fiscal planning. Critics have pointed out that it is much of the same, yet with the economic picture improving, the Government has sought to offer a respite from austerity, whilst also attempting to address the outstanding concerns of its international partners.
MADRID | By JP Marín Arrese | The Lehman Brothers example showed all too vividly how a credit institution might collapse should it find its coffers empty. Lack of confidence or sheer insolvency trigger financial crises. Yet the implosion always happens when depositors are unable to cash out their money. No wonder Basel III emphasized the need for banks to set up robust liquidity buffers.
MADRID | The Corner | “Further evidence has emerged that the euro area recovery is at risk. We acknowledge that German data were distorted by technical factors… but we still think underlying momentum is fading in Germany,” Barclays’ François Cabau commented. And that means, for an increasingly number of experts, that the prospect of QE II is becoming more entrenched. Some believe it could happen before New Year.
MADRID | The Corner | The European Central Bank’s Outright Monetary Transaction (OMT) will be back on the front pages on Tuesday. The European Court of Justice (the EU’s highest tribunal) will have to respond to the challenge of German judges, who said the OMT can be seen as monetary financing of governments, banned in EU treaties. “Every time the monetary union takes a step forward, German individuals and/or civil or political groups file a case with the Constitutional Court in Karlsruhe,” our senior analyst Luis Martí commented.
BRUSSELS | By Alexandre Mato | Today’s Eurogroup meeting and the Ecofin on Tuesday will focus on French budgetary problems. Moreover, Luxembourg will raise the issue about the investment gap in Europe. After 5 years of austerity, the European Commission is trying to pursue an economic policy change in the last few weeks that will move towards a focused on greater growth.