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In Europe 6th March 2012

Listen, Bundesbank: it is not our imbalance, it’s the German surplus

By Luis Arroyo, in Madrid | The Bundesbank has protested for the bulk of credit on the other central banks of the euro zone. The amount credited is €500 billion. The German Central Bank now worries about the risk of default, and suggests that these assets must be collateralised by real assets from the countries that have generated them. As Wolfgang Munchau says, this display of arrogance is telling, indeed. These accrued debts/credits…

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In Europe 29th February 2012

No UK veto for a depressed European trend in house prices

LONDON | Here is something the British prime minister David Cameron cannot veto: the domino-effect in the house market. Residential property in the United Kingdom saw overall prices fall by 1pc in 2011. This relatively flat reading places the UK on a similar footing to several other European neighbours, as just core EMU Germany and France, and Switzerland and Norway posted rises of 5pc or more. The latest RICS European…

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In Europe 27th February 2012

Sorpresa! Spanish exports grow faster than Germany’s

By Luis Alcaide, in Madrid | In 2011 Spanish exports of goods recorded the highest point after a period of intense growth since 2008. An increase of 16.8% in 2010 has been followed by a positive rate of 15.4% in the last year. The value of exports in 2011 reached the figure of €214.5 billions, which represents a share of 20% of Spain GDP. This share is equivalent to that…

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In Europe 24th February 2012

Did UK banks forget how to do retail?

LONDON | The largest European retail bank, the Spanish Banco Santander, announced Friday the appointment of 18 new business managers for its UK branches. Santander UK has pledged to have 500 local business managers based in business communities across Britain by the end of next year. This might be the way to go if British high street entities are to befriend again their customers. Santander’s own research, according to the group, showed…

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In Europe 24th February 2012

Brussels gives too slick a growth forecast to be credible in Madrid

By Juan Pedro Marín Arrese, in Madrid | The European Commission has developed a masterful command in saying things it does not believe in. The latest growth forecasts stand as an example of this hollow rhetoric. Reading the small print it seems clear the Commission sticks to obviousness in conceding we are stuck in a sharp downturn. When it comes to guessing what might lie on stock for the rest of…

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In Europe 23rd February 2012

Italian prime minister praises Spanish labour reform

MADRID | Mario Monti explained in an interview to the daily newspaper El Mundo that the Spanish labour reform ‘goes in the direction’ of the one he wishes to implement in his country. The Italian prime minister also comments on the reforms his government has carried out in Italy, such as the pension reform and he praises the Italian people’s ‘mature attitude’ when “it came time to accepting the sacrifices that…

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In Europe 23rd February 2012

British financial mutuals’ last laugh

LONDON | The UK’s trade body of financial mutuals AFM is not happy. The organisation this week launched a frontal attack against taxpayer-aided listed banks and their directors’ bonuses. Who could blame them? After all, in the City race, mutual insurers, friendly societies and others have lost most ground: for instance, the sector’s insurance services today represent around 6% of the British market, while their share stood at over 50% just 15…

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In Europe 21st February 2012

An alternative to austerity, 12 EU countries demand

The letter that the heads of government of twelve EU countries, including Spain’s Mariano Rajoy, sent to Brussels presented an eight point programme to promote economic growth in the European Union. It was addressed to the president of the European Council Herman Van Rompuy and that of the Commission, Jose Manuel Durao Barroso, yet was not signed by either Germany or France, the two main economies of the euro zone…

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In Europe 21st February 2012

British economist Angus Deaton awarded by BBVA Foundation

MADRID | British economist Angus Deaton was chosen Tuesday for the BBVA Foundation Frontiers of Knowledge Award in the category of Economics, Finance and Management in this fourth edition. Mr Deaton is professor at Princeton University (United States), and the jury selected him for “his fundamental contributions to the theory of consumption, savings and the measurement of economic wellbeing. “His research,” the jury added, “applies rigorous methods to important real world…

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In Europe 17th February 2012

Friday’s graphic: let’s compare unit labour costs between us

A working paper by professor José Luis Mechea on possible exit scenarios from the current international economic crisis brings this already known but not fully appreciated picture. Here you are how unit labour costs have evolved since 1999 in a few euro zone countries, France, Greece, Ireland, Italy, Portugal and Spain, in comparison to Germany. Obviously, there must be some link with this other graphic… Yes. Unemployment.