MADRID | The injection of public money and nationalisation of Bankia ends a compelling need with a solution, earlier discarded, that in the US or the UK has been long ago adopted but neither the Germans or the French want to face, in spite of many of their banks being as weak as some the Spanish entities may be. François Hollande’s arrival to the presidency of France is also good news:…
By Luis Arroyo, in Madrid | In brief, Germany would lose out in competitiveness with the rest of the world, were it to accept a monetary expansion policy. Germany is a big exports country, not just to the euro zone but to the outside, too. Check the graph as a proof. Foreign manufacturing orders from the rest of the world, in fact, are growing up quickly while demand from the…
All the way from Afi analysts in Madrid, we got this simple and colourful chart comparing purchasing managers index figures of different countries in September 2011 (because it was the month when global manufacturing activity recorded the latest lowest levels) and March-April 2012, with a third column that brings up the variation between those dates. The fact is that cyclical divergence between the euro zone and the rest of the…
MADRID | The reform of the pension system in Spain is planned to help to improve the outlook for sustainability of the system by reducing pension expenditure as a share of GDP. It should weigh in towards reducing the public deficit, too. At BBVA, analysts have drawn some basic comparisons between the Spanish and the German pension systems. “Given uncertainties about employment, productivity and demographics, it is appropriate for the…
NEW YORK | Restless and suspicious. That is how Wall Street seems to be feeling after France and Greece’s pushback against austerity measures. U.S. stock futures fell on Monday, while Treasuries gained. Investors wonder whether the stimulus advocated will derail bailout deals. And what will happen now that the Sarkozy-Merkel tandem is broken and the Greek parliament will have three new anti-bailout parties represented. This added to the uncertainty created by…
MADRID | Brussels seems to start taking growth into serious consideration. Up to now it follows the line that bringing deficit under tight control would be enough to trigger recovery, austerity standing as the only recipe to cure every shortcoming. The severe downturn that currently plunges European economies into utter disarray is casting doubts on the merits of such a simplistic view. Countries having lived beyond their means face now a…
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…
MADRID | The German Treasury placed Wednesday €2.4 billion in 30-year bunds with an average return of 2.41%, down from 2.62% in the previous auction. The bid to cover dropped to 1.1 times from 2.1 times. Berlin admitted that demand had been lower than expected, and the total sale volume planned had been left uncovered. In a note to investors, Citigroup in Spain commented on the German explanations and made an interested, interesting comparison: “This reflects a context of volatility and uncertainty, but more importantly, the…
By Jesús Sánchez-Quinones, in Madrid, for Cotizalia | Europe has for more than three years now been immersed in a profound crisis of its economy and beyond. The focus of trouble has been moving from country to country. First it was Greece, when its authorities acknowledged that they had falsified its public account figures in late 2009. After Greece, the focus shifted to Ireland when his government had to seek a bailout to…
Awaiting the government’s official figures, which will be released next 30 April, the forecast published this week by the Bank of Spain should be taken as a telling sign of the success that austerity budgets throughout euro peripheral State members are enjoying. The Spanish central bank said that it expects the country’s economic activity to fall by 0.4pc during the first quarter of 2012, a one-tenth down from 2011’s last…