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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…

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In Europe 19th March 2012

Real house prices since 2001 higher in UK than average euro zone

LONDON | Real house prices in the euro area have risen by an average of 23% since 2001, less than half UK’s growth of 50%. Five of the European Monetary Union country members saw a better house performance than the euro zone average: France saw the largest increase (82%), followed by Belgium (69%), Finland (61%), Spain (46%) and Italy (31%). In contrast, there were real price declines in Ireland (-23%), Germany…

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In Europe 16th March 2012

Peter Temin: “Merkel acts like Chancellor Bruening in 1931”

By Gustavo Matías | Professor Emeritus at MIT, Peter Temin understands why German Chancellor Angela Merkel bullies everyone into austerity. But he disagrees. Temin believes too many, too deep budget cuts can prevent countries from paying their debts as it has already been the case in Greece. So Germany could destroy the euro and put the global economy under risk? Something similar happened in 1931, also because of Germany’s influence, and led…