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In Europe 13th March 2014

Spain’s Warning Signs Of Japanisation- Shall We Buckle Up?

MADRID | By Julia Pastor | Amid the debate on the euro zone’s eventual japanisation due to low inflation levels, we wonder if Spain could be the first member state with severe signs of this illness. Inflation is near 0% since six months ago and markets’ expectations suggest an average price index scarcely over 1% for next five years, and under 2% in a decade. Along with Portugal, Spain is the EU economy having more price indicators’ components in red year-on-year rates, namely 40% against 20% of Europe’s average. That means that 2 out of 3 goods in Spaniards’ shopping basket are affected by deflation. Although good for the country’s competitiveness, there is a risk in the process of public as well as private debt deleveraging.

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In Europe 12th March 2014

Soros: “German Parliament Imposed Wrong Discipline On Spain”

MADRID | By The Corner Team | Greek billionaire, investor, philanthropist and speculator Geoge Soros is well known for his pessimissm towards the euro and his enthusiasm for getting headlines. During a visit to London for his book tour, he made a case against the excess of austerity in the eurozone and critizised the recipes imposed by the German Parliament on its neighbours like Spain.

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In Europe 7th March 2014

Sleeping euro zone slowly awakens

MADRID | By  Ofelia Marín-Lozano and The Corner team | Mario Draghi seemed satisfied on ECB’s Thursday meeting when calling the euro zone an “island of stability” on the grounds that the region has returned to growth levels of 2011. Old Europe’s awakening is a reality. Its GDP increased by an annualized 1.2% and its four main economies -Germany, France, Spain and Italy- also saw their individual growth figures go up. But the truth is the euro area is not back to 2008 pre-crisis levels nor is expected to get there until 2015. Europe has lost weight in the global scenario and apparently will continue to lose importance in the future, its GDP representing two thirds of U.S.’s by 2030.  

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World economy 5th February 2014

Italy Accuses Rating Agencies of Ignoring Its Patrimony- Should Spain, Greece Join In?

OP-ED By Ana Fuentes | Italy’s Corte dei Conti has opened an investigation against rating agencies for unjustified downgrading of the country in 2011 and 2012. S&P, Fitch and Moody’s face a potentially huge claim of €234bn for not considering Italy’s contribution to the world’s cultural patrimony. Will other countries follow Rome? Should the Parthenon or the Alhambra be taken into account when deciding Greece or Spain sovereign debt value?

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In Europe 4th February 2014

Credit deterioration in the euro zone hits rock bottom

MADRID | By Carlos Díaz Güell | Trend of credit fall in euro zone core countries as well as in peripheral ones has shifted direction thorought 2013: it moderated in Europe’s periphery while slowing down in central economies.The rate between credit and deposits has moved under 100% for the first time, which illustrates the euro zone strong deleveraging process.

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In Europe 3rd February 2014

Losing patience with the ECB

MADRID | The Corner Team | Investors are most likely to hear the ECB repeat (again) how prepared it is to act and use all kind of unconventional devices on next Thursday meeting, after inflation in the euro zone fell to 0.7% in December, its lowest level since the common currency was born. “As fears of  deflation increases, the central bank cannot remain unable to act,” analysts say.

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In Europe 27th January 2014

Lagarde and Draghi: train crash at Davos

MADRID | By Julia Pastor | Christine Lagarde, Managing Director of the International Monetary Fund  and Mario Draghi ECB’s president were in the same Davos panel on Saturday. Both talked about signs of recovery across the world and the euro zone. However, as she said that deflation potential risks in the euro zone must not be ignored, he minimized danger and insisted once more that the bank is prepared to deploy a QE’s policy if deflation appeared.

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In Europe 10th January 2014

Draghi Calls For Caution Amid Markets’ Excessive Euphoria

MADRID | By Francisco López | In the midst of the markets’ euphoria thanks to the sharp fall in the risk premiums of peripheral countries, the big commander came and ordered to stop. The president of the ECB, Mario Draghi, appealed to investors to be cautious facing the risks of a “fragile and weak” recovery in the Eurozone and about an inflation whose expectations on the medium-term have worsened.

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In Europe 10th January 2014

ECB: Attentive to money market conditions and inflation outlook

LONDON | By Barclays analysts | The ECB left monetary policy unchanged as expected and strengthened the downside bias of its forward guidance somewhat. Mario Draghi insisted on the fragility of the economic recovery and repeated that the ECB would be ready to act should downside risks materialize. We still think that monetary policy should be kept unchanged at least for the next two years, but we acknowledge the risk of further easing should inflation and inflation projections fall further. Besides, liquidity measures could be introduced to support the financing of the economy.

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In Europe 8th January 2014

France: Where reforms need to be made

LONDON | By Barclays analysts | France’s macroeconomic situation does not look that bad and on average the country compares well with other developed economies. It does not suffer from a major imbalance in terms of yearly flows (trade, finances, etc). However, weaknesses, perniciously accumulating over the years, have now been laid bare by the crisis.