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In Europe 28th March 2012

UK economy approaches technical recession with -0.3% 4Q 2011 GDP

LONDON | UK growth behaviour turned up worse figures than expected for the final three months of 2011. The Office for National Statistics published Wednesday its revised estimate for gross domestic production growth for last year’s final quarter, showing that the economy contracted by more than previously calculated. Q4 GDP was cut from -0.2% to -0.3%, with most of the downward update being made to household and government expenditure, while the contribution…

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In Europe 28th March 2012

Bailouts without growth for the euro zone

By Luis Arroyo, in Madrid | There is talk lately in the euro area about the capacity of our firewall, about what sort of volume it should reach in order to frighten the bond markets. This firewall is, of course, the European Financial Stability Facility, the current bailout fund to be replaced in 2013 by the European Stability Mechanism. German Chancellor Angela Merkel has surprised everyone by saying she is willing to…

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In Europe 26th March 2012

Until Spain’s new budget shows austerity muscle, Brussels must tread carefully

By Juan Pedro Marín Arrese, in Madrid | Once again Spain is riding the storm. The sharp reduction witnessed in risk premium over the last months is vanishing. A sharp budget deficit coupled with gloomy growth prospects and soaring unemployment rates are melting confidence down. Claims on a rather subdued debt position fail to impress markets. Fear that financial situation might end up in a plight is deeply ingrained. Worries…

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In Europe 26th March 2012

Why on Earth is Mervyn King still governor of the Bank of England?

By Luis Arroyo, in Madrid | Central bankers are incapable muppets covered with majestic pomp. The crisis has unveiled their naked, sad truth but what keeps them on their feet is that most people do not bother to properly scrutinise what they do and what they say. Crisis Maven is a blog devoted to analysing the words and actions of the Bank of England. It is a very curious case, that of…

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In Europe 23rd March 2012

An impending euro catastrophe? Fear the ones you hear nothing about

Another week left behind us and another wave of alarms about euro zone banks being de facto rescued by the European Central Bank’s long-term liquidity operations or expecting European Financial Stability Fund capital injections. Sí, Spain and its financial sector were back in the headlines, somehow accompanied by Portugal and Italy in a variety of doom-and-gloom combinations, with what some in Madrid see as self-fulfilling forecasts. At The Corner we say shooting the…

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In Europe 23rd March 2012

UK warned to lift unfair exit tax on companies moving to other EU countries

LONDON | The European Commission said Friday it had formally requested the United Kingdom to amend its legislation providing for exit taxes on companies. As it stands, the UK legislation that has risen concerns results in immediate taxation of unrealised capital gains in respect of certain assets when the seat or place of effective management of a company is transferred to another European Union or European Economic Area member State. On…

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In Europe 22nd March 2012

Portuguese prime minister Passos Coelho is running out of time

By Fernando Barciela | News that Portugal’s major cities grounded to a halt Thursday pointed at an initial victory for labour unions, which began today a 24-hour strike against austerity measures agreed by the government in return for an international bailout. Demonstrations and rallies were also planned in 38 cities and towns across the country, including Lisbon. Six months have been enough for prime minister Pedro Passos Coelho to become the most unpopular…

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In Europe 21st March 2012

Habemus UK 2012 Budget: happy banks, hurt pensioners, cautious markets

LONDON | Budget Battle began Wednesday after midday in the House of Commons at the rhythm of Hollywood action blockbuster-like slogans, with which chancellor George Osborne wrapped his delivery speech. The Coalition government aimed at convincing Britons in and out the Parliament that it will be able to reduce the deficit while supporting growth. “Britain is going to earn its way in the world,” Osborne shouted at the traditional belligerent level…

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In Europe 20th March 2012

UK roads’ privatisation would attract bids from Spanish companies

LONDON/MADRID | Financial analysts in Madrid agreed in their notes to investors on Tuesday that the UK Coalition government’s intention of privatising part of the road network of the country is a subject of major interest for Spanish infrastructure and construction companies. Banesto Bolsa experts described the decision as a clear ‘opportunity’ for Spanish firms, some of which already have a vast presence in the British transport services sector, namely…

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In Europe 19th March 2012

Prime minister Cameron has upset UK’s millionaires, says Skandia

LONDON | Discontent about the government’s economic policies fuels a desire to leave Britain among millionaires, whose confidence in the coalition cabinet’s economic policies is falling as their finances suffer. Just under half the UK’s millionaires, according to a research published Monday by investment specialist Skandia, would set home somewhere else. Graham Bentley, Skandia UK’s head of investment strategy, echoed the wealthiest’s mute threat, accusing primer minister David Cameron of aping…