Europe Economics Focus Is the euro-zone crisis really over? The improvement in market sentiment towards the euro-zone has not been matched by a material change in the troubled countries’ economic and fiscal outlooks. As such, the crisis is not over. 20th May 2013 · 1 min read
Europe Economics Focus Would deflation lead the periphery into a debt trap? If the peripheral euro-zone economies regained competitiveness via outright deflation, their public and private sector debt levels would spiral higher as a share of GDP, prompting disaster. 30th April 2013 · 1 min read
Nordic & Swiss Economics Focus Will Denmark remain the Nordic laggard? Denmark is finally dragging itself out of its long slump. Households have started to deleverage, exporters have become more competitive and banks are now stronger. But given that these adjustments... 12th March 2013 · 1 min read
Europe Economics Focus French slump to deepen fiscal fears The French economy is set to fall further behind others in the euro-zone as labour market rigidity holds back competitiveness and household spending is hit by fiscal austerity. This might cause France... 4th March 2013 · 1 min read
Europe Economics Focus Italy: After the election Even if the Italian general election results in the formation of a stable pro-reform Government, Italy’s huge underlying economic problems suggest that it may only be a matter of time before concerns... 20th February 2013 · 1 min read
Europe Economics Focus Have the peripheral economies regained competitiveness? Official figures appear to suggest that the peripheral countries are successfully restoring competitiveness through internal devaluation. Since peaking in 2008/09, whole economy unit labour costs... 18th February 2013 · 1 min read
Europe Economics Focus Can the ECB follow words with actions? Mario Draghi’s hints that the ECB might respond to the threat posed by the strength of the euro begs the question of just what action it could take. While there are plenty of policy options still... 14th February 2013 · 1 min read
Europe Economics Focus Has the ECB solved the crisis? Recent actions by euro-zone policymakers and the ECB in particular have prompted some commentators to conclude that the region has turned a corner. But we still expect the crisis to deepen again soon... 11th December 2012 · 1 min read
Europe Economics Focus How would exiting countries fare outside the euro-zone? Contrary to some suggestions, there are good reasons to think that, beyond the initial economic andfinancial disruption caused by an exit from the euro-zone, most of the current peripheral... 3rd December 2012 · 1 min read
Europe Economics Focus How the core should respond to a euro break-up Sharp appreciations in the euro-zone’s core countries would threaten to damage their exports and GDP in the event of a euro-zone break-up. But there are various policies that could be implemented to... 29th November 2012 · 1 min read
Europe Economics Focus How would a euro break-up affect the core? A euro-zone break-up would see the re-instated domestic currencies of the region’s core economies appreciate sharply. Without appropriate policy action, the resulting damage to exports would more than... 20th November 2012 · 1 min read
Europe Economics Focus How the core economies managed before the euro The common perception that the euro-zone’s core economies are inherently dependent on exports and would struggle to grow outside the single currency is misplaced. They all achieved pretty strong... 12th November 2012 · 1 min read
Europe Economics Focus Would a euro break-up be worse than the Lehmans crisis? The economic and financial effects of one or two small economies leaving the euro-zone would not necessarily be major, but the initial impact of a larger collapse would be rather more serious... 29th October 2012 · 1 min read
Europe Economics Focus Could Greece take advantage of a return to the drachma? The view of some commentators that a return to the drachma would be of little benefit to Greece because “it does not export much” is wide of the mark. Not only would an exit and devaluation improve... 8th October 2012 · 1 min read
Europe Economics Focus What are the lessons of historical devaluations for Greece? The experience of economies which have undergone major currency depreciations in the past suggests that a return to the drachma would kick start a Greek economic recovery. Provided that Greece adopted... 25th September 2012 · 1 min read
Europe Economics Focus How large a devaluation do the peripheral economies need? We think that some of the peripheral euro-zone economies may need their real exchange rates to fall by as much as 40% to regain competitiveness and kick start a period of export driven growth... 25th July 2012 · 1 min read