Germany

Markets 24th April 2012

Rigid deficit targets only fuel speculative runs

MADRID | The Dutch coalition collapse coupled with the plausible fiscal pact rebuke following the poll outcome in France has severely undermined investors’ confidence. Trust on discipline driven governance in the euro zone is crumbling. Losing in a row two key stalwart bastions of tough budgetary rules has sent shivers to the markets. Further challenges are expected to materialise as the austerity overdose dents popular support for governments at pains to…

In Europe 23rd April 2012

Hollande vs Sarkozy: a quick check by JP Morgan

MADRID | Although nine candidates attempted on Sunday to pass through to the second round of the French presidential elections, only two mattered in the dispute for the trophy: Nicolas Sarkozy, current president of the republic, and the socialist Francois Hollande. Two days after the first round of elections, the polls are very clear and give a significant advantage to Hollande, with an intention to vote of 54% against 45% for Sarkozy….

Markets 19th April 2012

“Time for a true euro zone bond,” BNY Mellon Investment advises Brussels

LONDON |The European economies are likely to continue being a significant source of volatility as disagreement within the European Central Bank inhibits its ability to put the region on a firmer footing, Standish said in a report published Thursday. The fixed income specialist for BNY Mellon made the observations in its April Outlook, by the global macro strategists at the firm. The conflicting viewpoints of members of the ECB’s governing council…

World economy 13th April 2012

NYT’s punch to Merkel because of Spain

NEW YORK | A big amount of pain in the Spanish economy could have been avoided. But the Germany authorities chose not to. This is pretty much the line of thought that The New York Times has been sharing with its public for months. So far, the excessive “German-led mismanagement of the euro-zone crisis” has been the focus of as many op-eds as the war in Afghanistan or the US healthcare…

Markets 13th April 2012

Madrid bluffing about leaving the euro may backfire

MADRID | Berlin is utterly bewildered, according to official sources, by the clumsy way Madrid is running its current crisis. A high ranking government representative stunned his German counterparts by openly declaring that Spain would be ready to find its way out of the euro if that was the prize to avoid intervention. He wasn’t bluffing. On Monday this week he presented PM Rajoy and ministers in charge of economic matters…

Markets 12th April 2012

Listen, Germany: it’s not (only) a debt problem, we need direct investment

By Luis Arroyo, in Madrid | A misdiagnosis can be fatal for the patient. Especially if the doctor is German, or Spanish but disciple of the Bundesbank school. Inflation is bad and so the public deficit is, that is the slogan. Let the people discuss whether this or that department should be reduced or not, and what about pensions or public investment?, VAT yes or no?, while the economy gets worse and…

In Europe 9th April 2012

Germany is the problem

By Luis Arroyo, in Madrid | John Authers, in Trends That Don’t Seem to Make Sense, have some pertinent questions to share. The one that has attracted my attention is: Why is the euro still so strong when at all other times a currency with so many risks would be certain to weaken? Resilience of the euro is startling and damaging. The eurozone’s crisis has been driven by balance of payments problems…

In Europe 9th April 2012

Is Spain heading for full intervention?

MADRID | Spain seems crippled by mounting economic woes. It faces a steep rise in risk premium fuelled by plunging confidence on its ability to reverse the bleak outlook ahead. Recession takes its toll in terms of higher unemployment, budgetary deviations and extensive deterioration in the banking sector. Reforms undertaken so far have failed to deliver any tangible benefit. Labour market overhaul has only helped to accelerate lay-offs, with no impact…

In Europe 4th April 2012

Chancellor Merkel should remember that Spain is not Germany

FRANKFORT | That is the view from Berlin: the biggest problem Germany contends with is Europe. And this is so particularly because of this fact, more than 17 million people are unemployed in the euro zone. But while in Austria the unemployment rises to 4.2% and 5.7% in Germany, the Spanish labour market suffers the tragedy of jobless figures that come to 23.6%. And there is no prospect of improvement. The problem is…

Markets 3rd April 2012

“The financial system won’t generate again wealth, jobs like in the last 30 years”

By Tania Suárez, in Madrid | Manuel Sousa Andrade is head of investment services and trading at Saxo Bank. Sousa proposes that if we want to get out of the current crisis, it’s necessary to get rid of the wrongs of the past and to change investors’ habits. Regarding the public debt, you say that investors want to ‘protect themselves’ and that’s why they ask for ever higher yields. Can…

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