Europe Economics Update Euro-zone Fiscal Monitor (May) Recent fiscal data suggest that Greece and Spain will struggle to meet their existing budget deficit forecasts for 2012 without implementing further austerity measures. But for now at least, the... 29th May 2012 · 1 min read
Europe Economics Update Problems mount for the next Greek Government Markets have reacted positively to some signs of growing support for the pro-bail-out parties amongst Greek voters. But the formation of a government headed by New Democracy is unlikely to end deposit... 28th May 2012 · 1 min read
Europe Economics Update The euro has yet to price in a break-up Even after the recent falls, the euro exchange rate does not appear to incorporate a significant “break-up premium”. As such, we see scope for further considerable declines as the crisis continues. 24th May 2012 · 1 min read
Europe Economics Update Can Greece survive outside the euro-zone? Many commentators argue that even though Greece might benefit from leaving the euro-zone in the long run, an immediate exit would result in the Government running out of money with potentially... 24th May 2012 · 1 min read
Europe Economics Update What more can the ECB do to help? The renewed escalation of the euro-zone crisis has prompted calls for the European Central Bank to take more action. But whilst the ECB has scope to provide more support without taking unacceptable... 23rd May 2012 · 1 min read
Europe Economics Update Would a country exiting the euro also have to leave the EU? Despite much confusion on this point, there does not appear to be any insurmountable legal barrier to a country leaving the euro and remaining within the European Union (EU), even without the prior... 22nd May 2012 · 1 min read
Europe Economics Update Euro-bonds can't keep the euro-zone together Calls for jointly issued “euro-bonds” are growing louder again. But they are unlikely to be implemented quickly or effectively enough to prevent some form of euro-zone fragmentation. 22nd May 2012 · 1 min read
Europe Economics Update Will falling bank deposits force Greece out? The recent rapid decline in Greek bank deposits underlines our warnings that it could be pressures on the banking system which provide the primary trigger for some form of euro-zone break-up. 17th May 2012 · 1 min read
Europe Economics Update Just how hard would a Greek exit hit the ECB? One often advanced reason why Greece and other countries simply could not leave the euro-zone is the potential damage to the institution at the core of the currency union, the European Central Bank... 17th May 2012 · 1 min read
Europe Economics Update Is Portugal still next in line? Domestically, Portugal’s economy suffers from a broader range of factors dragging on medium-term growth prospects than its peripheral European peers. And externally, an imminent euro-zone exit by... 16th May 2012 · 1 min read
Europe Economics Update Greece: After the election A victory for Greece’s anti-bail-out parties in the June election would not necessarily mark the end of the bail-out deal. But any agreement which is reached between the Government and the troika is... 16th May 2012 · 1 min read
Europe Economics Update Contagion is still the key danger The direct economic and financial effects of a Greek exit from the euro-zone need not be catastrophic. The key question remains whether the policymakers can prevent contagion effects from prompting a... 15th May 2012 · 1 min read
Europe Economics Update Higher German inflation won’t rescue the periphery Suggestions that higher German inflation will allow the euro-zone’s peripheral economies to regain lost competitiveness look hopelessly optimistic. Those countries still face deep and prolonged wage... 14th May 2012 · 1 min read
Europe Economics Update Greek election deadlock raises euro exit risk The failure of the Greek election to produce a new government provides some support to our view that Greece could leave the euro-zone as soon as the end of this year. 8th May 2012 · 1 min read
Europe Economics Update ECB: 'Austerity' wins the day The ECB held its main refinancing rate at 1% today but perhaps more interestingly, appears to have favoured the path of ‘austerity’ in the euro-zone region. Developments on inflation were deemed to be... 3rd May 2012 · 1 min read
Europe Economics Update Bank bond purchases could deepen the crisis Banks’ purchases of sovereign debt have helped to lower some euro-zone governments’ borrowing costs. But they cannot solve the broader debt crisis and may even deepen it by further increasing the... 2nd May 2012 · 1 min read