euro

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…

World economy 22nd March 2012

Impact of euro crisis in the US economy

By Luis Arroyo, in Madrid | A lengthy series of the risk premium spread (over capital or liquidity) between US Treasuries and BAA corporate bonds tells us several things: 1) that each time there has been recession (gray areas) this premium has picked up markedly; 2) the time it reached the highest point was in the last recession, up to 6%; 3) the 60-year average of this spread is 1.8%; 4) the current figure…

World economy 21st March 2012

Wednesday’s Spanish graph: late payments rate will approach 9.8pc by 2013

From Renta 4 analysts, a confirmation that late payments rate was 7.91pc in January, the maximum level seen by the Spanish financial sector since December 1994. And it was 8pc for the depositary entities. The increase in both cases has been the highest since February 2009, but the experts said today that they discard further acceleration. “During the next months, the situation should be stable and late payments rate is…

Markets 20th March 2012

Still no growth in the horizon for Greece: the story so far

By Begoña Castiella, in Athens | How could one of the poorest, smallest countries in the euro zone endanger the common currency? How could 300 members of the Greek parliament from five political parties and with allegedly little economic knowledge paralyse during two years reforms and budget adjustments that were urgently necessary to reduce the nation’s public debt? And despite two bailouts and a bond restructuring that has cut down in more…

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…

Markets 19th March 2012

“Spain’s financial system is now the most transparent in Europe”

By Fernando Rodríguez, in Madrid | Claudio Aguirre, board member at the Spanish bank Bankia confirmed in an interview with Consejeros magazine that the group intends to maintain its independence. Although the entity’s capital needs amount to about €9 billion, Aguirre says that being in a merger, Bankia could clean its balance sheet up against reserves, not only against income. What is your opinion about the third phase of the financial…

Spanish economy 19th March 2012

Spain in dire need to square the circle of the deficit target

By Juan Pedro Marín Arrese, in Madrid | The Spanish government publicly claims success in limiting damage after having boldly taken the step to revise upwards the deficit target. But privately, it recognises that being forced by partners in the Eurogroup to trim it down came as a nasty surprise. Overconfidence had led Madrid to believe that the understanding attitude shown over Spanish budgetary problems would be enough to shore up…

Interviews 17th March 2012

Weekend link fest

A curated selection of links we hope can enlighten us all; some come from our corner, some do from other corners of the net. And as always, our comment widgets are anxious to get your suggestions. Anglo-Saxon banker-bashing, this time from one of them! Why a general strike in Spain is not what once was Fed’s bank stress tests? Don’t trust them The day the UK felt vulnerAAAble A review of…

Spanish economy 16th March 2012

Friday’s chart says Spanish bond sales are fine, thanks

Before someone else sets sight on this graph and rolls out the Armageddon tale about the fall of the euro empire because of Spain’s disgrace, we would like to make available this explanation, which came via Madrid-based Link Securities. Is this chart indicative of a trend change in terms of buyer appetite of investors? “We think not. The abundance of liquidity in the system and its channelling by the banks (mainly residents) into assets with a profitable spread, should serve to maintain the strength of demand in future Spanish…

World economy 16th March 2012

Rajoy’s government begins deleverage: 27 state companies to close down now

MADRID | A plan for the restructuring and rationalisation of public sector firms become official on Friday in Spain. The government describes it as the first step of many to achieve a public network of companies without duplicities. Some of the enterprises were founded with the aim of developing activities not yet covered by private initiative and that were of national interest, but their justification is nowadays unclear, official sources said. In…

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