BERLIN | By Alberto Lozano | While yesterday downs on Wall Street were marked by rising tensions in Ukraine, negative data from German manufacturing orders also seem to to be influenced by the geopolitical risks and the Russian sanctions’ impact on the eurozone’s economic recovery.
BERLIN | By Alberto Lozano | After Q1’s strong growth, numbers show that the German economy has slowed down during 2Q’s first two months, as Bundesbank reported this week. Both the industrial sector and the construction have fallen compared with the 1Q. However, it seems that Europe’s economic powerhouse will recover its strength in the coming months.
FRANKFURT | By Lidia Conde | Is austerity at all costs killing us? Germany answers with a resounding “no.” Even though the North-South axis in the European policy is more present than ever, for Berlin “austerity does not punish.” On the contrary: it even purifies. Furthermore, the Stability Pact offers enough flexibility so as to boost growth. There is no room for revision or debate.
MADRID | The Corner | European and US markets fell on Monday while waiting for the Wall Street’s quarterly results season to begin. The session began without a clear trend, but the European markets went downwards when Germany published disappointing industrial production data in May. This monthly decline is the biggest in two years and might be the result of the 1st May long weekend and the geopolitical tensions deriving from the crisis in Ukraine.
BERLIN | Alberto Lozano | While German Finance Minister Wolfgang Schäuble preaches public budget consolidation all around the Eurozone, some Länder don’t seem to be taking his prescriptions seriously. Their deficits continue to grow in 2014 and moving away from the zero deficit goal in 2020 as required by the country’s constitution.
BERLIN | By Alberto Lozano | Although when speaking of reforms nobody is pointing to Germany, international organizations are pushing for it in the country, especially in the services sector. The goals are boosting consumption and rebalancing the euro monetary union, and higher productivity in services sector becomes a challenge with large potential gains for both Germany and the whole Eurozone. But some voices insist this won’t easily happen.
MADRID | By Bankinter analysts | Bundesbank’s monthly bulletin points that the German economy might slow down in the 2Q14, but that it would be reactivated in the 3Q14 thanks to the construction industry and the improvement of the confidence amongst households. Thus, the central bank raised its forecast for 2014 from 1.7% to 1.9%. In this context, Germany sold €1,511 million in 6-month bills with a negative interest rate: -0.0015%. Last May, the same bills were sold at +0.1089%, so we may conclude that the ECB’s negative deposit rate also helps the German debt.
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.
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.
MADRID | By Miguel Navascués | Nobody questions Germany’s big efforts in the EZ, but Spain accumulates an external debt of 100% of GDP as Germany accumulates capital abroad amounting for 100% of its. When a country does not cease to make external surpluses, it generates parallel deficits in others. These gaps are corrected by means of a rate exchange appreciation- depreciation or by reinvesting the surplus in the countries in deficit. Neither of which is happening today.