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In Europe 16th March 2012

Peter Temin: “Merkel acts like Chancellor Bruening in 1931”

By Gustavo Matías | Professor Emeritus at MIT, Peter Temin understands why German Chancellor Angela Merkel bullies everyone into austerity. But he disagrees. Temin believes too many, too deep budget cuts can prevent countries from paying their debts as it has already been the case in Greece. So Germany could destroy the euro and put the global economy under risk? Something similar happened in 1931, also because of Germany’s influence, and led…

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Spanish economy 16th March 2012

Spain’s government has no time to be nice: cuts aren’t, but must be done

MADRID | Spanish Finance minister Luis de Guindos bears the unpleasant task of playing the wet blanket, being realistic, not promising anything but selling a future. His role is that of the victorious Caesars’ companion, who had to whisper in their ears: “remember you are mortal”. In the government and in front of the citizens, he is the one who spoils the fun. For that he needs a great deal of…

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In Europe 15th March 2012

European labour costs slightly higher, bad news for competitiveness

Eurostat, the statistical office of the European Union, released Thursday data on hourly labour costs in the euro zone and in the EU. In both instances, the records indicate a very small increase but enough to strengthen the argument of those governments introducing wide-reach labour market reforms. Hourly labour costs in the euro area rose by 2.8% in the year up to the fourth quarter of 2011, compared with 2.6%…

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In Europe 14th March 2012

Portugal behaves

By Carlos Díaz Güell, in Madrid | Portugal has gained the confidence of the Troika (staffers from the IMF, the European Commission and the European Central Bank), as one could infer after reading the note published at the end of their visit last week to Lisbon for the third quarterly review of the adjustment programme. The group acknowledged the progress in correcting imbalances and gave the approval for disbursement of the fourth…

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In Europe 13th March 2012

The joke is on you, Mr Juncker

Semiotics of those now popular images go little farther beyond a simple, unsubtle fact: Spain’s finance minister Luis de Guindos is certainly not familiar with the sort of humour the Eurogroup’s chief, Jean-Claude Juncker, displayed Monday when he took Guindos’ neck between his bare hands ahead of their meeting. The prime minister of Luxembourg would next time be best advised to gently pat his Spanish colleague’s back; after all, the whole…

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In Europe 13th March 2012

Schroders: neither austerity, nor monetary expansion but a Marshall Plan

LONDON | Investment house Schroders brings in its latest ‘Economic and Strategy Viewpoint‘ the final word about austerity versus money printing. It is a conciliatory one. Well, sort of: chief economist Keith Wade and Europe economist Azad Zangana set the record seamless and believe each team is right, at least, about the other team: they all are wrong. On one hand, Wade and Zangana say they hold the “belief that…

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Markets 12th March 2012

Threadneedle: healthy demand for equities after liquidity boost in EU, UK, Japan

LONDON | Global asset manager Threadneedle pointed at liquidity operations carried out by most G20 governments as the primordial reason behind the recent rally that the equity sector has experienced. “We see the LTROs, the recent £50bn extension to quantitative easing by the Bank of England and the ¥10trn increase in the Bank of Japan’s asset purchase scheme as activities that boost liquidity and are likely to increase demand for…

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aggregation line 12th March 2012

What the City of London reads is the Telegraph, not the FT!

A shocking fact, from the revolving door here at thecorner.eu via Spain’s business paper Expansión, and a worth-noting point for readers tired of stereotypes: former Financial Times correspondent in Madrid Tom Burns has news for the pink’un-obsessed continental Europeans. What’s the dead-tree media brand of preference in the City of London? Not that one. Burns says City types love the finance pages of The Daily Telegraph, instead. “[In Europe] those in…

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aggregation line 10th 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. Europe needs a new …Napoleon Here they come, the peripherals rebel! If you are looking for EU imbalances, try the German surplus What the German commentators think of the ECB’s LTROs Places women (and everyone…

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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…