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Spanish economy 9th September 2014

OECD to Spain: Reform your reforms

MADRID | The Corner | Monetary policy is practically exhausted, there is almost no room for fiscal manoeuver due to the excess of indebtment… the only possible move for Spain now is “reforming the reform,” as Barclays’ Alberto Vigil commented on Tuesday. The Paris-based think-tank, who as usual warned about the huge unemployment rate and the deflation risk on Monday, recommended increasing consumer, property, and green taxes, and reducing employer contributions to social security for less-skilled workers.

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In Europe 5th September 2014

Draghi does the dirty job while Germany attacks

FRANKFURT | By Lidia Conde | What a relief! France is reinventing itself as it is Angela Merkel’s hope. However much Mr Draghi warns that the ECB will do whatever it takes to save the euro, all the fresh money in the bank will be useless unless “some members of the Eurozone” change their economic policy. This is Germany’s analysis of the Eurozone state.

QE

Markets 4th September 2014

QE gathers momentum

MADRID | By J.P. Marín Arrese | Mario Draghi’s anxious call to governments, urging them to put the house in order by implementing a combined economic and monetary policy, seems the right course of action. Deflationary risks run high as prices fall well behind the medium-term target. Once again, the Eurozone seems stuck as the growth prospects dwindle. Nothing new, as its appalling record during the crisis shows. Filling gaps through moral lessons, instead of money, hardly solves deeply entrenched problems.

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In Europe 25th August 2014

Draghi’s speech marks a turning point in ECB rhetoric

MADRID | The Corner | Although it is not part of ECB’s mandate, last Friday in Jackson Hole, President Mario Draghi spoke about what needs to be done in the euro area to address the problem of high unemployment and weak economic growth. As Barclays analysts believe, the speech “represented a significant breakthrough in the ECB rhetoric and will probably have significant implications regarding the debate just about to start between European government on policies that need to be deployed to avoid a ‘triple-dip recession’ and a fall in outright deflation.”

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Markets 28th July 2014

The (bonds) Hunger Games

MADRID | The Corner | In the next few days demand for Spanish bonds is expected to grow, since Spanish debt auctions will be held and European CPI data showing that prices remain very low will be released.

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World economy 28th July 2014

In some cases the central bank cannot control inflation…

SAO PAULO | By Marcus Nunes via Historinhas | …while in others it cannot promote it! Japan falls in the latter category. According to this article in the WSJ “Japan´s price target looks difficult.” The nationwide core consumer price index rose 1.3% from a year earlier in June, after adjustment for a recent sales-tax hike, below a 1.4% increase the previous month, according to government data released Friday. Inflation moderated in May and June due to falling energy prices and a stable yen, which has put the break on growth in import costs.

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World economy 25th July 2014

Risk: Geography trumps Economy

WASHINGTON | By Pablo Pardo | Geopolitics have returned with a vengeance in Europe right when Barack Obama’s economist view of international relations seemed to be on track with the negotiations for the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP). The IMF warns that geopolitical risk is back on stage.

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In Europe 14th July 2014

What if we are in a 2% growth world?

MADRID | By The Corner | Experts at JPMorgan are less worried about near-term disturbances and flows and more about the medium-term outlook for economic growth. Over the past three years, the world economy has grown only at a 2.5% pace, below potential and thus not able to make up for what we lost in the recession. Each year, they keep forecasting that growth will rise to a 3% handle, but have been steadily disappointed.