Europe Economics Update Post-lockdown lessons from Denmark Economic activity in Denmark appears to have clawed back about one-third of its virus-related fall since the government started to ease restrictions in mid-April, with activity probably about 7.5%... 21st May 2020 · 4 mins read
Europe Economics Update ECB could own 40% of Italian gov’t bonds by year end We think that the ECB could end this year owning 40% or more of the government bond markets in Italy, Spain and Greece. That would help to cap bond yields this year, but it could create serious legal... 19th May 2020 · 3 mins read
Europe Economics Update What to make of the Franco-German fiscal proposal The €500bn EU joint fiscal package suggested by France and Germany would be a significant move towards fiscal union. However, the benefit to the countries hit hardest by the coronavirus crisis... 19th May 2020 · 3 mins read
Europe Economics Update Five key questions about short-time work schemes Wage subsidy schemes in place throughout the euro-zone have so far been effective at preventing a surge in unemployment. In this Update, we answer five questions about how these schemes will evolve as... 14th May 2020 · 4 mins read
Europe Economics Update German Cash for Clunkers 2.0 won’t be a silver bullet Now that restrictions are being lifted, governments are inevitably facing calls to ensure that firms emerging from virus-imposed stasis have sufficient demand to stay open – not least in the German... 13th May 2020 · 3 mins read
Nordic & Swiss Economics Update Norges Bank sets a floor at zero This morning’s 25bp rate cut by the Norges Bank, to a fresh record low of zero, took the consensus by surprise, but was in line with our forecast. That said, the Bank gave a strong signal that it has... 7th May 2020 · 3 mins read
Europe Economics Update Covid-19 pulls rug from under Greek recovery Just as the Greek economy was getting back on its feet the coronavirus pulled the rug from under it. And while the government’s generous fiscal support will cushion the blow, it also raises questions... 5th May 2020 · 7 mins read
Europe Economics Update German court ruling highlights future risks to the euro The German constitutional court ruling today will not bring the ECB’s asset purchase programme to a sudden end. But it highlights that a successful legal challenge to the its policies in the future... 5th May 2020 · 4 mins read
Europe Economics Update ECB dragging feet over sovereign support The ECB’s failure to step up its asset purchase programmes at today’s monetary policy meeting will leave investors with nagging doubts about its commitment to underwrite government borrowing during... 30th April 2020 · 3 mins read
Europe Economics Update How quickly will euro-zone activity return to normal? Although restrictions are set to be lifted in the coming weeks, economic activity in the euro-zone will remain significantly below pre-virus levels for a long period. Consumers are likely to be wary... 29th April 2020 · 5 mins read
Europe Economics Update Five key questions (and eight charts) about Italy There is some room for cautious optimism on Italy, at least for the near-term. Daily new infections are falling, the government has begun to exit its lockdown, and bond spreads are narrowing. With... 28th April 2020 · 4 mins read
Nordic & Swiss Economics Update Riksbank signals rate cut in the pipeline This morning’s decision by the Riksbank to leave its repo rate and crisis-related policy settings unchanged did not come as a big surprise. Nonetheless, it kept the door open for a rate cut, and we... 28th April 2020 · 3 mins read
Europe Economics Update Sweden’s light-touch lockdown far from pain-free Despite imposing less draconian measures than elsewhere, the economic impact of Sweden’s ‘lockdown’ is not far short of that in France, for example. Accordingly, Sweden’s experience pours cold water... 24th April 2020 · 2 mins read
Europe Economics Update ECB will need to increase its bond purchases again The ECB’s record pace of asset purchases is proving insufficient to bring bond spreads down. We think that it will need to step up the pace of purchases further, as well as expand the overall size of... 22nd April 2020 · 3 mins read
Europe Economics Update Divided politicians to leave ball in ECB’s court Proposals for a major, joint fiscal initiative are under discussion again ahead of tomorrow’s EU leaders’ meeting. But the gulf between those in favour and against looks too large to bridge. As a... 22nd April 2020 · 3 mins read
Europe Economics Update Bank of France floats a version of helicopter money The Bank of France floated the idea recently that the ECB could use “helicopter money” to channel funds to companies after the worst of the current crisis has abated. While this idea has some... 15th April 2020 · 4 mins read
