LONDON | Investment house Schroders brings in its latest ‘Economic and Strategy Viewpoint‘ the final word about austerity versus money printing. It is a conciliatory one. Well, sort of: chief economist Keith Wade and Europe economist Azad Zangana set the record seamless and believe each team is right, at least, about the other team: they all are wrong. On one hand, Wade and Zangana say they hold the “belief that…
LONDON | UPDATE | Unanimously. The International Swaps & Derivatives Association resolved Friday evening the last unknown about Greece’s restructuring debt process. The Greek government used collective action clauses to drag a small group of investors into accepting losses under the nation’s laws. The association ruled that this could be considered as a credit event that triggers payouts on credit default swaps or CDS, a market whose participants were anxious while waiting…
The Latin Bloc may be awakening, after all. The least it could be said about the Spanish government’s decision of bending the public deficit target bar Brussels and Berlin intend to impose, from a harsh 4.4pc to a softer 5.8pc, is that president Mariano Rajoy has enlivened with his move the not-just-austerity talk and the perhaps-Germany-is-wrong debate. In the Friday edition of the Spanish daily El País, former president and…
By Julia Pastor and Tania Suarez, in Madrid | Pablo Díez, at Nordkapp’s asset management department argues that implementation of austerity as the only measure to sort the crisis out will bring social chaos in Europe. Yet, Díez is unsure about how right Spain’s president Mariano Rajoy is in rejecting the deficit target of 4.4% this year. Do you think it would have been ‘suicidal’ to commit Spain to Brussels’…
LONDON | The British Property Federation issued a warning Thursday to Chancellor George Osborne ahead of possible Treasury action to close a stamp duty loophole through with foreign fortunes would be avoiding tax. The bill, according to official calculations, amounts to £1 billion, but UK’s property sector said that Osborne “must tread carefully with ‘super-rich’ stamp duty reform” and “tread lightly with any anti-avoidance intervention.” The BPF admitted there is a the…
By Fernando González Urbaneja, in Madrid | Explaining the Spanish public deficit problem in 2012 in terms of confrontation between the government of Mariano Rajoy and Brussels is wrong and misleading. So far Brussels has not penalised members who do not meet their programmes, but has rather come to help achieve the objective, with more or less enthusiasm and more or less requirements imposed. Brussels may begin proceedings for an excessive…
LONDON | The latest edition of the liquidity expansion programme developed by the European Central Bank received Wednesday a warm welcome among several investment houses in the City. From their point of view, Long-Term Refinancing Operations or LTRO would not only help keep afloat European entities, within and out the euro zone, but prop up optimistic prospects over the global economic performance. In a report Schroders released today, chief economist…
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…
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…
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…