Tag: debt crisis

Posted on

Merkel Concessions at Euro Crisis Summit Smarter than they Seem – SPIEGEL ONLINE

Christian Rickens: Merkel’s concession is more than compensated for by a diplomatic victory she scored in the run-up to the summit: Late last week, she managed to get new French President François Hollande to sign off on her fiscal pact, which is deeply unpopular in Paris, in return for her support on the €130 billion ($165 billion) European Union “growth pact.”

The inequality of the deal is difficult to overstate. The growth pact is made up of little more than empty promises and dreams that can never come true. Though it won’t spur any growth in Europe, at least it won’t cost Germans any more money either.

Should one be looking for a summit loser, in fact, it necessary to look no further than Hollande. Not Angela Merkel. She merely did what she always does on the EU stage. She made compromises. And pretty clever ones at that.

via Merkel Concessions at Euro Crisis Summit Smarter than they Seem – SPIEGEL ONLINE.

Posted on

Debt crisis: Germany caves in over bond buying, bank aid after Italy and Spain threaten to block 'everything' – Telegraph

Bruno Waterfield: On Thursday night, Italy and Spain plunged an EU summit into disarray by threatening to block “everything” unless Germany and other eurozone countries backed their demands for help.
…..Under the deal, Spanish banks will be recapitalised directly by allowing a €100 billion EU bailout to [be] transferred off Spain’s balance sheet after the European Central Bank takes over as the single currency’s banking supervisor at the end of the year.
……[and] a pledge to begin purchases of Italian bonds using EU bailout funds to reduce Italy’s borrowing costs with a lighter set of conditions…..

via Debt crisis: Germany caves in over bond buying, bank aid after Italy and Spain threaten to block ‘everything’ – Telegraph.

Posted on

What Will Germany Do?

Anatole Kaletsky: With every day that passes, and especially since the French election, it is becoming clearer that the problem country for the euro—the odd man out in terms of economic structure and the chief obstacle to any political resolution of the euro crisis—is not Greece, Spain or Italy. It is Germany. It is Germany that refuses even to talk about mutual debt and banking guarantees. It is Germany that insists on self-defeating fiscal austerity and intolerable political conditions for the debtor countries. It is Germany that vetoes quantitative easing by the ECB, which could cap bond yields and relieve deflationary debt traps. And it is Germany that makes the other euro countries uncompetitive, discourages devaluation of the euro against the dollar and refuses even to relax its own domestic fiscal policies to reduce its trade surplus and support growth….

via John Mauldin’s Outside The Box

Posted on

ECB’s Nowotny Cautions Against ‘Single-Minded’ Austerity – Real Time Economics – WSJ

“The single-minded concentration on austerity policy (in the 1930s) led to mass unemployment, a breakdown of democratic systems and, at the end, to the catastrophe of Nazism,” said Ewald Nowotny [Austria’s central bank governor and member of ECB governing council] at a financial conference in Vienna. He added that central bankers during the start of the financial crisis had been very keen to avoid the mistakes of the 1930s.

Mr. Nowotny also cautioned against trying to impose a “moralistic” solution to the euro zone’s current debt problems. “It is not about punishing children who have behaved badly,” he said, adding that it was important not to let the concept of moral hazard turn into an excuse for not taking “practical initiatives.”

via ECB’s Nowotny Cautions Against ‘Single-Minded’ Austerity – Real Time Economics – WSJ.

Posted on

Greek “final exit polls” suggest a New Democracy/Pasok coalition | The Big Picture

Greek “final exit polls” please remember these are Greek “final exit polls” suggest that New Democracy and Syriza and Pasok will have 159 seats in the 300 seat Parliament. The important point is to win, as the party with the most votes gets an additional 50 seats in Parliament. Its still pretty close but it looks from the “final exit polls” that there will be a sigh of relief in equity markets tomorrow.

via Greek “final exit polls” suggest a New Democracy/Pasok coalition | The Big Picture.

Posted on

U.K. Aims to Mute Impact of Crisis – WSJ.com

Chancellor of the Exchequer George Osborne and Bank of England Gov. Mervyn King announced plans to flood banks with cheap funds in a dual attempt to jump-start lending to British households and businesses and to fend off potential financial problems at big U.K. lenders. The programs resemble some of the emergency measures enacted by central banks in Europe and the U.S. during peak crisis periods in recent years.

via U.K. Aims to Mute Impact of Crisis – WSJ.com.

Posted on

Stock market is saying ‘Don’t fight the Fed’ – Mark Hulbert – MarketWatch

Mark Hulbert: Investors appear to be betting that the Fed and European central banks now have no choice but to stimulate their economies to a much greater extent than previously planned. Since much of that additional liquidity would find its way into equities, the stock market responded favorably.

To put it crudely: The news is so bad it’s good.

via Stock market is saying ‘Don’t fight the Fed’ – Mark Hulbert – MarketWatch.

Posted on

Berlin is ignoring the lessons of the 1930s – FT.com

Germans must understand that bank recapitalisation, European deposit insurance and debt mutualisation are not optional; they are essential to avoid an irreversible disintegration of Europe’s monetary union. If they are still not convinced, they must understand that the costs of a eurozone break-up would be astronomically high – for themselves as much as anyone.

After all, Germany’s prosperity is in large measure a consequence of monetary union. The euro has given German exporters a far more competitive exchange rate than the old Deutschmark would have. And the rest of the eurozone remains the destination for 42 per cent of German exports. Plunging half of that market into a new Depression can hardly be good for Germany.

via Berlin is ignoring the lessons of the 1930s – FT.com.

Posted on

How Europe Can Save the EU: Work Harder, Spend Less

Andy Xie, an independent economist in China, said European countries without a competitive advantage must simply work harder or spend less. Alternatively, if they want to keep living it up, they will have to accept wrenching labor reforms and deregulation.

Xie saw no popular consent for either course of action. Nor did he detect that Europe was tightening its belt as urgently as Asia did after its 1997/98 financial crisis. “While eurozone economies have contracted a bit, people seem to be bent on enjoying life as usual,” Xie wrote in New Century weekly, a Chinese publication. “China cannot save Europe. No one can. Only Europeans can, through increasing work relative to leisure.”

via How Europe Can Save the EU: Work Harder, Spend Less.

Posted on

UK & Europe

Dow Jones Europe Index found medium-term support at 220 but reversal of  13-week Twiggs Money Flow below zero warns of strong selling pressure. Breach of primary support at 210 would signal a decline to 160*, close to the 2009 low. Respect of support is less likely but would indicate a rally to 260.

Dow Jones Europe Index

* Target calculation: 210 – ( 260 – 210 ) = 160

The FTSE 100 is consolidating above 5250 on the weekly chart. 13-Week Twiggs Money Flow remains above zero but 63-day Twiggs Momentum warns of a primary down-trend. Failure of primary support at 5000/5100 would confirm.

FTSE 100 Index

* Target calculation: 5000 – ( 6000 – 5000 ) = 4000

Powered by WordPress / WordPress Maintenance Service By Website Helper