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In Europe 28th May 2014

“Spain has been trying to be a good citizen by keeping the German bankers happy”

MADRID | By Ana Fuentes | Well-known U.S. economic theorist and financial strategist Michael Pettis believes the European project has a blatant, simple economic problem: Germany benefits from a weak euro while Spain suffers from a strong currency. As for the IMF’s recommendation of cutting wages in countries like Spain, Mr Pettis thinks it’s an absurd tip that can only make the global demand imbalance worse. He answered our questions via email from Beijing, where he is currently based.

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Markets 27th May 2014

EU’s problem is not in Germany but in France

MADRID | The Corner | The rise of the far-right Front National will harm more the European project than any economic recipe imposed from Berlin. In the end, Germany is indeed setting hard conditions for the EU integration, but at least is favoring it, whereas France’s Marine Le Pen has a clearly anti European speech and intends to bring power back to the countries.

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Markets 8th May 2014

The pernicious effects of an overvalued euro

MADRID | By Francisco López | While Mr. Draghi simply says that the ECB “is closely following the evolution of the exchange rate due to its impact on the price stability,” other international bodies such as the IMF, the OECD, the European Commission and most of the Eurozone’s countries (with the exception of Germany and its allies) demand the banking authority to take immediate action.

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In Europe 18th March 2014

If Scotland, why not Greece?

ATHENS | Yanis Varoufakis via TrumanFactor | Why an independent Scotland should get out of sterling, but Greece should not volunteer to exit the Eurozone? Scotland should state its intention to decouple from sterling, once independent, rather than petitioning for a continuation of its subservient role in an asymmetrical sterling union. But if this is good advice for Scotland, why am I arguing that Greece should not sever its links with the even more odious monetary union known as the Eurozone? Unless the two cases differ, my argument lacks consistency. But they do differ. Fundamentally too.

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In Europe 12th March 2014

A too much strong euro for such a weak euro zone

MADRID | By Francisco López | The climbing of euro against U.S. dollar is increasingly worrying market strategists as it can affect negatively prices and loss of competitiviness in the euro zone. Conversely to the ECB, which has decided not to intervene exchange rate. “It is out of our mandate,” Draghi assured last Thursday, “unless it damages prices’ stability expectations or economy growth.”

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In Europe 5th February 2014

The Threats of Emerging Countries For the Euro

MADRID | By Luis Arroyo | The appreciation of the euro, in a deflationary context as the current one, may be the last push so as to cross the ECB’s red line and reach a Japanese style deflation. Macroeconomic variables don’t encourage optimism, especially because inflation in the euro zone is getting closer and closer to the ECB’s zero red line.

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In Europe 14th November 2013

Greece and the Euro: Syriza, the last man standing

ATHENS | By Nick Malkoutzis at The Agora | Until a few days ago the only thing connecting SYRIZA and Texas was the lone star on their flags. But, suddenly, the US’s second-largest state seems to have provided a defining moment for Greece’s second-largest party. SYRIZA leader Alexis Tsipras chose a speech at the University of Texas in Austin on November 4 to put minds outside of Greece at ease with regard to his party’s plans should it come to power after the next general elections.

Mortal disagreement in and for the euro

In Europe 11th November 2013

Mortal Disagreement In and For the Euro

MADRID | By Miguel Navascués | There is a harsh disagreement in the euro zone: when Mario Draghi tries to do something, he finds the opposition of Germany and its allies. It seems obvious that Europe won’t get out of the hole with such travel companions.