IMF reports 70pc of Spain’s banking system already cleaned up

By Julia Pastor, in Madrid | The idea of a suffocated Spanish banking sector spreads like fire throughout the markets: Bankia’s nationalisation, Moody’s cut, the French president François Hollande advising to recapitalise the sector… But the International Monetary Fund will publish next week a report that assures 70% of Spain’s financial entities are already restructured. This news should help tame and perhaps even extinguish the flames. Analysts at Madrid’s financial City also…

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Monday’s chart: that bank deposit flight

From Afi analysts in Madrid, an investor note came Monday with the picture of that much talked about capital flight from the euro peripheral banking systems in the form of non-financial private sector bank deposits. The variation this year, although somewhat noticeable, has not accelerated and volumes remain above 2010 levels in Portugal, Spain and Italy. Greece, on the other hand, shows a seemingly non-stoppable drop since 2009. All in…


Threadneedle warns fears of austerity destabilises US bond market

LONDON | Investment company Threadneedle told clients that the market has increasingly moved its US economic forecasts towards more conservative views. Threadneedle explained in a technical note that, although it had updated its forecast for US economic growth in 2012 from 1.5% to 2% after some strong first quarter data, it too remained of the view that the US economy will slow in the second half of the year. Analysts said some…


Grexit: The Greek exit would cost France and Germany dear

LONDON | If you haven’t heard of it, you have simply not been on planet Earth: Grexit was the trendiest word this week, but for the wrong reasons. Would Greece exit the euro zone, shuttering prospects of an approaching global economic recovery? The matter was not whether the Hellenic nation could stand the heat coming from the European Commission, the European Central Bank and the International Monetary Fund, which assured the…

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Euro zone exporters should look beyond Chinese demand for growth

LONDON | The euro area continued to run a small trade surplus up to March. This is encouraging on account of stronger import prices, led by energy, in the first quarter of the year. But a closer look into the volumes suggests that import volumes are weakening. Estimates from Barclays Capital analysts put the declining at around 1% in January to March 2012 from the same period in 2011, after a…

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Euro area’s industrial production fell 0.3pc in March after February’s 0.8pc rise

In March 2012 compared with February 2012, seasonally adjusted industrial production fell by 0.3% in the euro area and by 0.4% in the EU. In February production rose by 0.8% and 0.4% respectively. In March 2012 compared with March 2011, industrial production dropped by 2.2% in the euro area and by 1.9% in the EU. These estimates were released this week by Eurostat, the statistical office of the European Union. In March 2012 compared with…

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The European Investment Bank could be the answer to austerity exhaustation

LONDON | Were the tide changing within the shaken frontiers of the European Monetary Union, austerity-driven core euro nations could do worse than open the European Investment Bank’s window to let some fresh capital aid in. Barclays analysts said Friday in a note to investors that using the EIB to complement budget constrictions would be a feasible option and the probability of this happening is growing: this time it is…

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Euro area’s hopeful graph: retail trade up

In March 2012 compared with February 2012, the volume of retail trade rose by 0.3% in the euro area and by 0.7% in the EU. In February, retail trade fell by 0.2% and 0.5% respectively. In March 2012, compared with March 2011, the retail sales index dropped by 0.2% in the euro area, but grew by 1.0% in the EU. These first estimates came from Eurostat, the statistical office of the European Union. In March…


Slim talk about growth in Euroland

MADRID | Following German Chancellor Angela Merkel’s instructions, those supposedly at command in Euroland zealously repeat that growth and austerity are not in contradiction. Beware about such a slim talk. Their underlying message is that fiscal compact must be preserved at all costs, growth delivery amounting to a merely cosmetic make-up. Eurocrats are working out ways to sell through financial engineering the same money under a more “à la mode” disguise….

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“For Spain is either a bad bank or an outright intervention”

By Tania Suárez, in Madrid | Gabriel Montalto is general manager in Spain at Hanseatic Brokerhouse. In a conversation with The Corner, he pointed out that the European Central Bank should finish with the liquidity injections as soon as possible. Montalto also remarked that is doubtful that Germany decides to change its policy of austerity. Do you think the euro zone is already in recession? According to the data we are…