Op-ed by Ana Fuentes | We no longer hear about ‘Spailout’ nor ‘Grexit’, but there seems to be a euro zone’s new victim: France. A Newsweek magazine article called ‘The fall of France’ wondered about the Hexagone’s economic health and how it may be a burden for the EZ’s recovery. The problem is, some of the stated facts were wrong. French media are striking back.
MADRID | By Álex García.
SAO PAULO| By Marcus Nunes|When the Fed ‘forgets’ its function of keeping overall nominal stability you may get different instabilities. If, as in the 1960s, it becomes mostly concerned with unemployment the result will be rising inflation.
The Corner Team | The Panama Canal Authority and the building consortium Grupo Unidos por el Canal (GUPC), led by Spanish construction company Sacyr, have both agreed to put up at at least $100 million each to keep the canal work running. The big question remains who should pay for $1.6 billion in cost overruns. GUPC has asked the canal administrator for a $400 million advance. Some Spanish analysts believe they’ll reach an intermediate agreement, in which the Panamanian Government covers half of the costs (circa $800 million), although the consortium would have to sacrifice some profit margin. The Spanish government insists they will not give money “in any case”.
THE CORNER TEAM | Although fiscal austerity and structural reforms implemented have inflected some euro zone countries a severe pain, they will bring them external capital inflows, Chinese rating agency Dagong Credit predicts for 2014. This combined with the potential increase in Germany’s import demand will mean that the euro zone economies will rebound a little and see pressure of sovereign debt crisis ease further.
LONDON | By Michael Gavin at Barclays | The 2013 sell-off in interest rates in the global currency areas has been driven entirely by perceptions that economic activity is on course to continue its recovery; inflationary pressures have been conspicuous only for their absence in all major currency areas except Japan, where the (still limited) pressure is welcome. This likely explains why equity markets in the advanced economies were so resilient to the backup in US and global rates and why the brunt of the 2013 bond sell-off was borne largely by the long end of the curve.
BEIJING | By Caixin staff | Change is in the air and certain moves in China – involving the tax system and oversight of officials – can be made now to get the Year of Horse off to a fast start
THE CORNER TEAM | As the euro zone crisis shakes off a recession, investment opportunities are mushrooming across the South of Europe. In Spain, banking and media sector as well as infrastructure are the preferred bets. “As maximum exposure recovery in Europe’s periphery, FCC is ideal. Just don’t think about the downside,” the Financial Times’ Lex argued on Friday, after millionaires George Soros and Bill Gates have both bought stakes in the indebted construction company in less than three months.
BEIJING | By Yang Lu at Caixin | In China, nervous businessmen spent final hours of 2013 waiting outside regulator’s offices for word they’d be among the lucky few to IPO approval.
MADRID | By Álex García.