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World economy 18th February 2012

Weekend read | Greece shows Euroland inability to run a monetary union

By Juan Pedro Marín Arrese, in Madrid | Greek politicians’ sheer incompetence and the stiff resistance of its population to renounce living beyond its means are branded as evidence of that country unavoidable failure. Yet it only shows European leaders’ blindness in grasping how a monetary union should work. Their diagnosis on where the problem laid has proved to be utterly wrong. Obsession about budgetary targets, they knew beforehand to…

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World economy 16th February 2012

US apprehension over Greece

NEW YORK | The US are anxious over Greece. Wall Street fell on Wednesday and the Dow Jones Industrial Average suffered its biggest one-day decline this year. Treasury 10-year note yields traded below 2 percent as European leaders work on an eventual €130 billion financial bailout for Athens at their next meeting on February 20. Investors did not hide their worries:  “As much as we’d like to ignore Greece and…

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World economy 14th February 2012

Deutsche Börse, NYSE Euronext turn to Madrid after failed merger attempt

MADRID | According to Capital Madrid, Deutsche Börse’s executives as well as NYSE Euronext’s are already seeking other growth options, after the European Commission blocked their merger earlier this month. The fact is that the initiative has turned differently in both parts of the Atlantic. As the Germans have sped up the negotiations held with other European stock markets, the New Yorkers are trying to convince investors that they are able…

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World economy 14th February 2012

Tough: UK is under negative outlook, no need to blame the euro

LONDON | Will Moody’s tear out the British triple-A badge before those precautionary 18 months go? If the rationale of the warning issued by the financial risk ratings agency to the Coalition government is that the European neighbourhood may in the near future find even harder to charm investors and so will drag the island’s economy with them towards deeper recession, then the top award became meaningless long ago. Markets know this, but still,…

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World economy 14th February 2012

Obama chooses debt… and hopes for growth

NEW YORK | While Europe is determined to cut the deficit now and see what happens later, the Obama administration has chosen the other way: spend now, cut in the long term. As the president has just put it “[We] can’t just cut our way into growth.” Not willing to risk the improvement the US economy is experiencing, he has sent to Congress a $3.8 trillion budget for the fiscal…

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World economy 13th February 2012

Super PAC’s: Incredibly loud, extremely powerful

NEW YORK | They call it Obama’s reluctant blessing: the US president has given top bundlers the green light to raise cash for the political organization that supports him, Priorities USA Action. Barack Obama was an outspoken critic of the 2010 Supreme Court’s decision that allowed these so called super Political Action Committees (Super PAC’s) to raise unlimited amounts of money from corporations, unions or individuals. An increasingly big group…

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World economy 10th February 2012

Baltic Dry and other dubious evidence in predicting doom

By Juan Pedro Marín Arrese, in Madrid | Analysts are busy collecting evidence for a huge recession. The 70% drop in the Baltic Dry Index, ranging now below the lowest level hit in 2009, has been hailed as the proof doomsday is looming. It seems that only bad news are taken on board, others being hastily dismissed as rubbish. Are prospects so bleak? Well, we are far from expecting a favourable…

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World economy 9th February 2012

IAG woos Japan Airlines

By Tania Suárez, in Madrid | IAG’s CEO Willie Walsh said last year that if the opportunity arose, they would definitely be willing to take a major equity stake in Japan Airlines. Now, that opportunity has apparently arisen. IAG has come to an agreement with Japan Airlines (JAL), and both companies will soon sign a joint business agreement. According to Walsh himself, IAG has “established very close links with JAL”…

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World economy 8th February 2012

To Mr Scott Sumner: this is why Australia, Sweden succeed against the crisis

By Luis Arroyo, in Madrid | The reason? Well, their States are exemplary. No banks in trouble, no massive public debt but a very aggressive monetary policy to grease the inevitable deleveraging process. Let us compare them to the US, for instance, whose gross debt to national GDP has already touched the 100pc base. This, I suppose, should shake the beliefs of old Keynesians like Krugman, stubbornly champions of a…

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World economy 7th February 2012

European efforts in innovation still lagging behind US, Japan

The EU is not closing the persistent gap with global innovation leaders US, Japan and South Korea. The European Commission on Tuesday published the results of its Innovation Union Scoreboard, which includes innovation indicators and trend analyses for the EU 27 Member States, as well as for Croatia, Iceland, the Former Yugoslav Republic of Macedonia, Norway, Serbia, Switzerland and Turkey, and also compares a more reduced set of indicators between the…