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Little England or Great Britain?

In Europe 8th November 2013

Great Britain vs Little England

LONDON | By The Economist Staff via Presseurop | According to the British newspaper, Great Britain “faces a choice between comfortable isolation and bracing openness. Go for openness. Asked to name the European country with the most turbulent future, many would pick Greece or Italy, both struggling with economic collapse. A few might finger France, which has yet to come to terms with the failure of its statist model. Hardly anybody would plump for Britain, which has muddled through the crisis moderately well.”

ECB inflation

In Europe 8th November 2013

ECB reacts to low inflation and cuts interest rate

LONDON | By Barclays analysts | In a surprise move, the ECB cut the refi rate by 25bp to 0.25% and left the deposit rate unchanged at zero. It also extended its fixed-rate, full-allotment facility to all refinancing operations by one year, at least until mid 2015. The ECB clearly signalled that it is concerned about persistently low inflation, even if deflation risks are contained. We will only know more about how long the ECB thinks low inflation will last next month when it publishes its macroeconomic forecasts. We see euro area inflation in 2014 dropping to 1.0% from the forecast 1.4% this year.

energy policy in Europe

In Europe 7th November 2013

Energy Policy in Europe is Every Man for Himself

FRANKFURT | By at Frankfurter Allgemeine Zeitung via Presseurop | Germany is going down the green energy road, Poland is drilling for shale gas, and the United Kingdom has announced the building of new nuclear plants: when it comes to energy supply and security, the Europeans are hauling in different directions. It’s in their own interest, though, to adopt a common strategy.

No Picture

In Europe 6th November 2013

ECB likely to respond to monetary tightening

LONDON | By Barclays analysts | Disinflationary pressures and significant monetary tightening in the euro area suggest ECB action sooner rather than later. In our view, the probability of an easing at the ECB’s December meeting has increased and will likely be priced-in through a lower EUR heading into the meeting and beyond.

Greeces budget deficit No one is listening

In Europe 6th November 2013

Greece’s budget deficit… no one is listening

ATHENS | By Ilias Makris via Preseurop | “Help!” Arriving in Athens on November 5, representatives of the EU-ECB-IMF troika met with the Greek Minister of Finance, Yannis Stournaras. Their meeting focused on the the question of the country’s budget deficit in 2014 along with measures to ensure its compliance.

Greek Banks2

In Europe 5th November 2013

When Will Greek Banks Operate as Credit Institutions Again?

ATHENS | By Jens Bastian via The Agora | Despite the successful recapitalisation process and continued restructuring of the Greek banking sector, the credit transmission mechanism towards the real economy remains severely impaired.  [Above graph sources: The Agora and Bank of Greece yearly data.]

100 years on Germany pulverizes Europe

In Europe 5th November 2013

100 years on Germany ‘pulverizes’ Europe

SAO PAULO | By Marcus Nunes | According to Professor Harold James, “Germany’s general election in September and the prolonged formation of a new government since then have highlighted a peculiar development. Not only does Germany now seem to be running Europe, but the rest of Europe seems to be falling in love with Germany – not least because, in a time of political confusion and economic instability, Germans are the only Europeans who seem to know what they want.”
No Picture

In Europe 4th November 2013

Before ECB’s meeting: Euro Losses Momentum To Possible Rate Cut

MADRID | By Francisco López | The market has changed their perception about the ECB’s monetary policy and it’s now anticipating a possible reduction of interest rates in the eurozone before end of the year or early 2014. The first consequence has been the depreciation of the euro, which has gone from 1.38 dollars, a two-year-maximum, to 1.35. The European currency suddenly depreciated, yet it still overvalued against the dollar.

European Banking Union

In Europe 4th November 2013

Why European Banking Union May Fail (Varoufakis)

MADRID | By Luis Arroyo | Yanis Varoufakis is the most critical economist regarding the institutional failures of the monetary union. He considers that the European Banking Union will only benefit EU Northern countries, and adds that the basic principles of the euro zone have not been entirely followed.

Spain A mild recovery arrived along with international investors

In Europe, Spanish economy 4th November 2013

Spain: A mild recovery arrived, along with international investors

LONDON | By Barclays analysts | Several data releases over the past few days confirm that the Spanish economy has left behind a very long recession. The data confirm our view of a very gradual recovery in economic activity starting in Q3 2013 (seeEuropean Economics Quarterly, October 2013, for details). The economy grew at +0.1% q/q in Q3 13 after nine consecutive quarters of negative prints.