Europe Economics Weekly A vintage year, but is the best yet to come? The euro-zone economy performed better in 2017 than we and most forecasters had anticipated at the year’s outset. Investment growth picked up despite intense political uncertainty. And while a rise in... 21st December 2017 · 1 min read
Europe Economics Weekly Who gains most from ECB corporate bond purchases? At this week’s press conference, Mario Draghi confirmed that the ECB’s corporate bond purchases will continue in “sizeable” quantities next year. The exact amount that it intends to buy is unclear... 15th December 2017 · 1 min read
Europe Economics Weekly European Monetary Fund is no silver bullet The European Commission’s (EC) latest proposals for euro-zone reform and integration centred on the transformation of the European Stability Mechanism into a European Monetary Fund (EMF). The EC plans... 8th December 2017 · 1 min read
Europe Economics Weekly What to make of the ECB’s Financial Stability Review This week the ECB released its bi-annual Financial Stability Review in which it cited weak bank profitability, an abrupt repricing of risk premia, and debt sustainability as “medium-level” risks. We... 1st December 2017 · 1 min read
Europe Economics Weekly Softly, softly...the ECB is tweaking its forward guidance Our reading of the minutes of the ECB’s October policy meeting is that the Bank has begun to prepare the ground for an end to its asset purchases. Before long, the ECB seems set to stop promising to... 24th November 2017 · 1 min read
Europe Economics Weekly Buoyant Germany brightens euro-zone prospects Data this week confirmed that the euro-zone had a very good Q3, with a 0.6% rise in quarterly GDP pushing the annual growth rate up to 2.5% – the highest since early 2011. This was stronger than the 2... 17th November 2017 · 1 min read
Europe Economics Weekly Softer services activity is no cause for alarm The latest euro-zone data have brought signs of a slowdown in activity in the services sector compared to that in manufacturing. But we suspect that the slowdown in services will be modest. After all... 10th November 2017 · 1 min read
Europe Economics Weekly Which assets will the ECB buy in 2018? The ECB’s decision last week to extend its bond-buying well into 2018 means that it will probably need to change the composition of its purchases. After all, it has already had to reduce its purchases... 3rd November 2017 · 1 min read
Europe Economics Weekly Subdued inflation outlook will ensure ECB treads carefully The ECB’s decision to reduce its monthly asset purchases from January largely reflected growing optimism that euro-zone inflation will rise towards the target of below, but close to, 2%. Indeed, the... 27th October 2017 · 1 min read
Europe Economics Weekly Spanish and Italian “separatists” not yet an economic worry Madrid’s plan to impose direct rule in Catalonia is likely to be met by protests, which would cause shortterm disruption. The risk of a more serious economic deterioration is growing, but as things... 20th October 2017 · 1 min read
Europe Economics Weekly Austrian populists to frustrate EU integration plans The Austrian general election taking place this Sunday is likely to result in a far-right, populist party entering government. While this probably won’t have significant domestic economic... 13th October 2017 · 1 min read
Europe Economics Weekly Catalan political crisis still far from an economic one The Catalan Government could achieve independence without Spain’s consent if a critical mass of people and firms were on board. This would be negative for the rest of Spain. Spain’s government’s debt... 6th October 2017 · 1 min read
Europe Economics Weekly Would Macron’s plan for fiscal union work? Among the wide range of proposals for the EU put forward by French President Emmanuel Macron this week was the introduction of a euro-zone finance minister and a euro-zone budget. In principle, we... 29th September 2017 · 1 min read
Europe Economics Weekly What will Germany’s election mean for the economy? The German election taking place on Sunday is not expected to have a significant impact on the economy. But the composition of the next coalition – which is likely to be either another grand coalition... 22nd September 2017 · 1 min read
Europe Economics Weekly Is the euro-zone moving closer to fiscal union? European Commission President Jean-Claude Juncker this week gave his support to the creation of a European Monetary Fund and a euro-zone “budget line”. Eventually, these would result in slightly... 15th September 2017 · 1 min read
Europe Economics Weekly Subdued inflation outlook to keep ECB cautious The ECB’s new forecasts show that it expects inflation of just 1.2% next year and 1.5% in 2018. As the economy is performing well and core inflation has picked up recently, the Bank should still feel... 8th September 2017 · 1 min read
