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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 9th March 2012

In Greek deal, commissioner Rehn praises investors but some feel scolded

LONDON | UPDATE | Unanimously. The International Swaps & Derivatives Association resolved Friday evening the last unknown about Greece’s restructuring debt process. The Greek government used collective action clauses to drag a small group of investors into accepting losses under the nation’s laws. The association ruled that this could be considered as a credit event that triggers payouts on credit default swaps or CDS, a market whose participants were anxious while waiting…

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Spanish economy 22nd February 2012

Spain’s plan to cancel €35bn debt from regional and local authorities

By Julia Pastor, in Madrid | Spain’s government is about to attack another of the ills afflicting the country’s economy: the debt that regional governments and municipalities owe to their service providers. The minister of Finance Cristóbal Montoro announced Tuesday that the cabinet will finalise a macro financial operation to cancel this debt, which has reached the €35bn level and has been suffocating Spanish SMEs’ liquidity for years (SMEs’ weight…

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In Europe 6th February 2012

Greek crisis: no tsunami at bay

By Juan Pedro Marín Arrese, in Madrid | When it comes to conditions imposed on Greece, they are not so fierce as usually depicted. Axing 25% of minimum wages might seem a harsh therapy. But salaries pegged to this standard would still be 15% higher than in Portugal. As to supplementary pension schemes and holidays bonuses, ask the Portuguese how they feel on that. Closure of more than 100 state-controlled entities…

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Markets 2nd December 2011

RBS’ Mariano Aldama: “Spain’s new government can bring back markets’ trust”

Mariano Aldama of the Royal Bank of Scotland and responsible for capital market origination for financial institutions in Spain and Portugal, has given an interview to the business daily Cinco Días in which he admits that, despite the critical situation of Spain because of excessive financing costs, it is possible to restore market confidence. We offer an excerpt of the interview. How long can the banking system resist without financing itself? The rejection in the markets can not last much longer but first there are pieces of the puzzle that…

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Markets 15th November 2011

Barclays: “Italy's net financing needs for 2012 are really short, about €35bn”

Berlusconi’s resignation and Mario Monti’s designation have had an unenthusiastic impact on the European stocks, Barclays notes. “A positive welcome at the beginning has been followed by a general fall of all indexes, including Milan which had increased about 25 early yesterday in the morning. The political change did not help the 5-year bond auction either, because the Italian Treasure issued €3bn at 6.29%, the highest rate since 1997. After…

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Markets 15th November 2011

Barclays: “Italy’s net financing needs for 2012 are really short, about €35bn”

Berlusconi’s resignation and Mario Monti’s designation have had an unenthusiastic impact on the European stocks, Barclays notes. “A positive welcome at the beginning has been followed by a general fall of all indexes, including Milan which had increased about 25 early yesterday in the morning. The political change did not help the 5-year bond auction either, because the Italian Treasure issued €3bn at 6.29%, the highest rate since 1997. After…

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World economy 25th October 2011

Zero interest rate and other myths of the Great Depression's U.S. monetary policy

By Miguel Navascués, in Madrid | H. Clark Johnson, professor at Yale University, identifies in a paper titled Monetary policy and the Great Recession, what he calls the six myths of U.S. monetary policy during the Great Depression. The paper not only explains the cause of the hole we’re in, but also the reasons why zero interest rate does not imply monetary expansion. In the latter case, the reason is simple:…