ECB Holding Rates: Germany Breathing
THE CORNER TEAM and Álex García | As expected, the ECB left interest rates at a record low on Thursday, the way its main shareholder, Germany, wanted. But what about the rest of the EU members?
In Europe
The Threats of Emerging Countries For the Euro
MADRID | By Luis Arroyo | The appreciation of the euro, in a deflationary context as the current one, may be the last push so as to cross the ECB’s red line and reach a Japanese style deflation. Macroeconomic variables don’t encourage optimism, especially because inflation in the euro zone is getting closer and closer to the ECB’s zero red line.
Credit deterioration in the euro zone hits rock bottom
MADRID | By Carlos Díaz Güell | Trend of credit fall in euro zone core countries as well as in peripheral ones has shifted direction thorought 2013: it moderated in Europe’s periphery while slowing down in central economies.The rate between credit and deposits has moved under 100% for the first time, which illustrates the euro zone strong deleveraging process.
Losing patience with the ECB
MADRID | The Corner Team | Investors are most likely to hear the ECB repeat (again) how prepared it is to act and use all kind of unconventional devices on next Thursday meeting, after inflation in the euro zone fell to 0.7% in December, its lowest level since the common currency was born. “As fears of deflation increases, the central bank cannot remain unable to act,” analysts say.
Greece: It’s not the distance; it’s the load you carry
ATHENS | By Yiannis Mouzakis via Macropolis| It is beyond any doubt that what Greece has achieved fiscally over the last few years is phenomenal. A primary deficit that at the end of 2009 stood at 24.2 billion euros has been wiped out within just four years and has been turned into a small primary surplus, irrespective of any objections one might have about its size and how it was achieved.
When Spain’s banking sector progresses, Europe Moves Forward Too
MADRID | By Julia Pastor | What is good for Spain is good for Europe. Certainly, while recognising that the country “has pulled back from severe problems in some parts of its banking sector, thanks to its reform and policy actions,” the European authorities’ fifth review does not omit the fact that this has been achieved “with the support of the euro area and broader European initiatives.”
Starting Point
EMU banking : well-behaved vs rogue systems?
MADRID | By Luis Martí | The European banking union project received a remarkable boost last December, even if a major chapter, the bank resolution fund, had to conform to German requirements and stay on a national basis. This part of the agreement is a moot point, and Southern countries should have raised their voices and taken a firm stand against, as Münchau also wrote, no matter the delay inflicted to the working agenda of the eurogroup.
Lagarde and Draghi: train crash at Davos
MADRID | By Julia Pastor | Christine Lagarde, Managing Director of the International Monetary Fund and Mario Draghi ECB’s president were in the same Davos panel on Saturday. Both talked about signs of recovery across the world and the euro zone. However, as she said that deflation potential risks in the euro zone must not be ignored, he minimized danger and insisted once more that the bank is prepared to deploy a QE’s policy if deflation appeared.
Spain Issues Largest Syndicated Deal In Euro Zone History
MADRID | By Julia Pastor | The same day Spanish banking system credit line was officially cancelled, the country issued a record 10-year bond amounting €10 bn. The syndicated bond sale was strongly oversubscribed by almost four times the sum on offer, just beaten by €44bm of EFSF first issue.