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.
ROME | By Umberto Eco at L’Expresso via Presseurop | In the midst of the World War One, Marcel Proust created characters who, in spite of the conflict, were attracted by German culture. Proof, according to semiotician Umberto Eco, that cultural exchange has contributed more than anything else to the building of today’s Europe.
LONDON | By Barclays analysts | In a surprise move, the ECB cut the refi rate by 25bp to 0.25% and left the deposit rate unchanged at zero. It also extended its fixed-rate, full-allotment facility to all refinancing operations by one year, at least until mid 2015. The ECB clearly signalled that it is concerned about persistently low inflation, even if deflation risks are contained. We will only know more about how long the ECB thinks low inflation will last next month when it publishes its macroeconomic forecasts. We see euro area inflation in 2014 dropping to 1.0% from the forecast 1.4% this year.
LONDON | By Barclays analysts | Disinflationary pressures and significant monetary tightening in the euro area suggest ECB action sooner rather than later. In our view, the probability of an easing at the ECB’s December meeting has increased and will likely be priced-in through a lower EUR heading into the meeting and beyond.