LONDON | Contagion is an easy-to-spot force. The German stock market DAX 30 Index has since late March declined by 9.2% in euro terms, in an environment where the broader continental market, as represented by the MSCI Europe Index, has fallen by 10.6%. For mere market observers, this drop has followed a period of very strong performance earlier in the year, particularly two months ago, so perhaps a degree of profit-taking…
By Luis Arroyo, in Madrid | We either reinforce the political union in the European Monetary Union or let the monster simply die away. These are the actual choices we have, and one must admit that a euro termination does not sound as the craziest option, not after four years of unstoppable recession and walking at the brink of the abyss. It is a possibility no one wants to study,…
More tourists so far than last year, but a downward move in traditionally important markets for Spain’s tourism sector. The accumulate figures this year from January to April indicate a rise of 1.1 percent in foreign tourists, with a total of 13.7 million, coming to Spain comparing to the same period in 2011. But April brought a fall in numbers by 4.5 million or 1.7 percent less foreign tourists in contrast…
Luis Arroyo, in Madrid | It’s the talk of the town. The euro zone desperately needs to become a fiscal union and, voilà, everything will be sorted. But I wonder: how do we get there? Have a look at the chart below, which reflects fiscal pressure levels in core Europe economies and in some of the peripherals’. What do we see? We clearly spot the huge differences among them (which are…
Just because most European languages attach a semantic Spartan-like element to the term austerity, it doesn’t follow that austerity must obviously be a more consistent policy than, let’s say, a profligacy programme. Common ancient history aside, the increasing doubts about the German and French economies doing well in spite of the stress the euro zone is going under, tells us that austerity plans currently in place in euro peripheral States were not thoroughly…
NEW YORK | There was a final statement, yet not a consensus about how to tackle the euro zone turmoil. Everyone in Camp David hoped that Greece will remain in the euro. For the first time, the argument that Europe cannot face more spending cuts gained widespread support. G8’s final communiqué showed a big push to German Chancellor Angela Merkel: it is urgent to bring deficits down through austerity measures…
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…
LONDON | The financial City of London would pose as an unlikely critic of Germany’s tactics throughout the long euro rope pulling between the peripheral rotten economies and the apparently unstoppable Teutonic motor. Report after report has come out from City analysts supporting how urgent austerity packages were and pointing at every bad decision made by Greek, Irish, Portuguese, Italian and Spanish politicians, who should have known better. Truth be told,…
Luis Arroyo, in Madrid | Greece was in free fall mode when at the European Central Bank they had the funny idea of pushing the country …downwards. The ECB said it had frozen all operations with Greek banks, which already are suffering a killing capital drain: “Central bank head George Provopoulos told Papoulias that Greeks have withdrawn as much as €700 million ($891 million) and the situation could worsen, according to the transcript…
MADRID | Markets have been plunged into utter chaos by the Greek political deadlock and the prospect parties staunchly opposed to the EU bail out plan may have the upper hand in the incoming elections. Panic has also been driven by light comments picturing Greece’s eviction from the euro as an anodyne and somehow inevitable event. Such a bullish appraisal does not emerge from Anglo Saxon analysts so much inclined to…