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In Europe 4th June 2012

Rajoy’s proposal of fiscal integration should be the aim of all Europe

By Tania Suárez, in Madrid | Most financial commentators have focused its attention on the comments that the Spanish president Mariano Rajoy made last Saturday. He emphasized the importance of creating a European body whose main objective would be to control of the finances of the different States, i.e. a fiscal integration. According to macroeconomic experts at Morgan Stanley, such measures of fiscal integration should be the aim of Europe…

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In Europe 4th June 2012

Alan Meltzer has a solution for the euro

WASHINGTON | “Capitalism without failure is like religion without sin, it does not work,” had already said Allan Meltzer in 1969. Pittsburgh's Carnegie-Mellon University teacher and author of the monumental History of the Federal Reserve is the same conservative who advised John F. Kennedy and Ronald Reagan. Under Clinton's presidency he was in charge of a U.S. Congress committee that essentially claimed the end of the World Bank on the basis…

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In Europe 2nd June 2012

Where are all those rumors about Spain’s bailout coming from?

NEW YORK | IMF managing director Christine Lagarde has denied it. So have U.S. Treasury Secretary Timothy Geithner and Spanish government: there is no plan or request for a Spanish bailout. However, stocks pared losses Thursday after the Dow Jones agency published a report that the IMF had started contingency plans on a possible rescue loan for Spain. The reporter quoted “people involved in the handling of the Spanish crisis”….

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In Europe 31st May 2012

Draghi demands a schedule towards the United States of Europe

By Julia Pastor, in Madrid | The very logical answer from the European Central Bank’s president Mario Draghi to the Spanish claim for that institution intervening was a rejection. Instead, Draghi demanded Thursday that European leaders make up their minds on how the euro will be in a year’s time. Draghi also argued in favour of a “banking union”. News agency Europa Press reported his declarations. “Can the ECB fill the…

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In Europe 31st May 2012

UK house prices are going… up

LONDON | This is what happens when the size of your construction sector remains under the 10 percent per GDP level, and the cost of credit for the State and the country’s banking sector is mild enough as to allow a slow deleverage process. The Nationwide house price index reported Thursday that UK house prices edge up by 0.3% in May. Over the last eighteen months, house prices have been remarkably stable…

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In Europe 31st May 2012

Brussels, Madrid better tread carefully

buy cheap cigarettes By CaixaBank Research team, in Barcelona | In its World Economic Outlook, the International Monetary Fund (IMF) predicts a slowdown in 2012 that should be followed by a weak recovery in 2013. The good performance of the US economy and the implementation of urgent policies in the euro area have lowered the risk of a sudden relapse and mean that the slowdown will be less than had…

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In Europe 30th May 2012

Everyone has forgotten the European Bank of Investment

By former director of the Catalan Institute for Finance, Ernest Sena | As if nothing had happened in Europe and the world over the past five years, the European Investment Bank continues working in the same line as it did fifty years ago. One must add that the EIB does very well what it does, nevertheless. The EIB is a key part of the European institutional framework. It was created in 1957 by…

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In Europe 29th May 2012

It’s the Single Market, stupid!

MADRID | CAPITALMADRID.COM In the years 1992/93 the Spanish authorities struggled for longer than events recommended to keep the exchange rate of the peseta. Something similar might be going now on, but in another dimension, as the government still defends the good health of Spain's financial system. Back then, the stabilisation mechanism in place determined a fixed exchange rate for the peseta, let's say in short, against the German mark….

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In Europe 29th May 2012

Who will audit Brussels?

By Carlos Díaz Guell, in Madrid | Following the steps taken by the Spanish government to increase the requirements of capital provisions to the banking system from 7% to 30%, that is some €30 more billion, the Eurogroup, seen the distrust generated by the Bank of Spain’s actions, asked the Rajoy government to commission an independent valuation of property assets on the balance sheets of financial institutions. The international financial authorities and…

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In Europe 28th May 2012

UK’s construction sector crumbles a further 18pc, but not to worry

LONDON | The second release of UK GDP figures shed some light on the surprisingly large decline in GDP in the first quarter. The revised figures showed an even larger drop in the construction sector, with -18% or a -1.3% contribution to quarterly GDP growth. Not to worry, said JP Morgan in Monday’s note. Even if the figures are correct, however, the sector only represents 8% of economy (unlike in some other…