MADRID | By Julia Pastor | Germany and Spain are leading the Euro zone’s economic recovery from the EZ’s North and South, respectively. 1Q14 data point out the German economy grew by 0.8% and Spanish by 0.4%, while France’s GDP was flat and Italy, Portugal and the Netherlands went back to recession. Merkel’s following the EC recipes to increase wages and Rajoy’s reforms -despite a big, painful impact on the Spanish population- seem to have bear fruit.
MADRID | By Fernando G. Urbaneja | In the midst of the financial turmoil (2012), the ECB facilitated liquidity to avoid the collapse of the European banks when the inter banking market was dried up and nobody lent money. The central bank had to act as “last resort banker” and maintain the system as well as guarantee liquidity. Those credit lines are amortized once their function has been accomplished. Now, they are preparing other measures to stimulate growth and avoid other threats such as deflation or stagnation.
MADRID | By Luis Arroyo | In his beautiful and easy-reading blog Fixing the Economists, Philip Pilkington recently posted about the difficulties of the monetary policy to stabilize the economy. The most interesting aspect is perhaps that his comments are based on old and forgotten economists who wrote very well and had clear ideas. In this case, he chooses Kaldor and Harrod, two smart Keynesians.
MADRID | By Carlos Díaz Güell | Definitely, Mario Draghi has turned communication into the essential tool for the European central bank’s policy to make sense without taking any measure at all. Month after month the ECB’s president resources to words instead of actions, but some analysts start to dislike this considering they have been long waiting for a move from the institution.
MADRID | By Julia Pastor | The European banking sector needed to regain markets’ confidence after the crisis and before November stress tests. On Monday, ECB’s vice-president Vitor Constancio assessed their moves as very positive, pointing to a compendium of sale of assets as well as capital and debt issues that reached €104 bn last year.
BARCELONA | Joan Tapia| That the Spanish economy grew by 0.4% quarterly in the 1Q14, and by 0.6% yearly is a real green shoot. After several years of recession, GDP is to grow moderately, around 1% in year 2014. However, employment continued falling by 184,000 people, at an annual pace of 0.5%. A slap in the face for those who told the recovery was more intense than expected.
ATHENS | By Macropolis | Greek building activity (as measured by the number of building permits) retained on a downward curve for the third straight month in February, retreating by 20.7 percent according to the Hellenic Statistical Authority (ELSTAT).
FRANKFURT | By Lidia Conde | Experts don’t agree about what can happen in the short and medium term in the Eurozone. The main critical voice is the president of Munich’s Ifo Institut, Hans-Werner Sinn, who believes that Europe is in a “resting phase” before the storm hits again. According to Germany, now is the time of the “Draghilogists”, i.e. those analysts who try to elucidate the ECB’s next step.
MADRID | By Julia Pastor | For the first time European citizens will elect the successor of the European Commision’s president Jose Manuel Durão Barroso. The upcoming elections of May 25 will have two candidates, one for the socialist party, Martin Schulz, and another for the conservatives, Jean-Claude Juncker. This change of direction is not the result of a reform or a pact in the back room but of a consensus decision. Hopefully, the US could no longer say they don’t have a European direct interlocutor.
BERLIN | By Alberto Lozano | It’s not all about the deficit. If the eurozone wants to achieve the goal of sustainable growth, Germany also needs to shorten its chronic current account surplus, the world’s largest, which has led the country to accumulate capitals abroad amounting 100% of its GDP. Although this means dismissing one its economic miracle recipes -wage moderation-, Merkel will increase public workers’ salaries by 3% this year, +3X inflation.