Europe Economics Weekly How much will the strong euro hurt? The euro’s rise to a nine-month high against the US dollar last week suggests that the euro-zone has lost what may turn out to be the opening skirmishes of a global currency war. If the euro remained... 11th October 2010 · 1 min read
Europe Economics Weekly Ireland: Closure or Calamity? The Irish Government deserves some credit for coming clean last week on the “horrendous” costs of its banking support measures, although its openness may have been dictated as much by public... 4th October 2010 · 1 min read
Europe Economics Weekly Markets' concerns about the periphery spiral higher Last week was another rollercoaster ride for the euro-zone’s periphery. Disappointing Irish and Portuguese data provided a timely reminder of the task that both governments face to put their public... 27th September 2010 · 1 min read
Europe Economics Weekly Wage pressures to remain subdued Last week’s data brought further evidence of persistent weakness in euro-zone labour markets, with employment stagnating in Q2 and annual wage growth slowing. Admittedly, while pay cuts continued in... 20th September 2010 · 1 min read
Europe Economics Weekly Banking worries continue to weigh on the periphery The recent slide in the euro and rise in peripheral bond yields appears to reflect renewed concerns about the health of the region’s banks. These concerns may only subside once the peripheral... 13th September 2010 · 1 min read
Europe Economics Weekly IMF too sanguine about the risk of a sovereign default Last week, the IMF published a note outlining why it believes that a government default in the advanced world is “unnecessary, undesirable and unlikely”. While the note makes several valid points, we... 6th September 2010 · 1 min read
Europe Economics Weekly Yield spreads to remain elevated Deteriorating global growth prospects and increased risk aversion have prompted a further fall in German 10-year government bond yields to a post-reunification low of around 2.1%. While fears have... 30th August 2010 · 1 min read
Europe Economics Weekly Export recovery to slow before long Recent encouraging news on the euro-zone has prompted us to revise up our 2010 GDP growth forecast from 1.0% to 1.5%. But the recovery is still heavily reliant on German exporters and the outlook for... 23rd August 2010 · 1 min read
Europe Economics Weekly Strong growth for now, but deflation risk remains The news that euro-zone GDP rose by 1.0% in Q2 confirmed that the economy is performing very well, both by its own and international standards. But this might not last. The recovery is still heavily... 16th August 2010 · 1 min read
Europe Economics Weekly Is there any hope for euro-zone consumers? On the whole, the news on the euro-zone was fairly good again last week. Industrial figures from Germany confirmed that Q2 was a very good quarter and the final release of July’s euro-zone PMI surveys... 9th August 2010 · 1 min read
Europe Economics Weekly Peripheral concerns still central On the face of it at least, last week brought good news as economic sentiment rose further in July and there were tentative signs that strains in the banking sector could be easing. But with credit... 2nd August 2010 · 1 min read
Europe Economics Weekly Stress tests are no silver bullet Attention last week centred again on the bank stress tests, which were due for publication on Friday. While the results were unavailable at the time of writing, it already seemed clear that they would... 26th July 2010 · 1 min read
Europe Economics Weekly Industrial divergences likely to grow Last week’s euro-zone industrial data provided further evidence that the recovery in the sector remains on track. But it also added to worries that divergences within the region are building and that... 19th July 2010 · 1 min read
Europe Economics Weekly ECB to support banks as stress tests bring little comfort Last week’s confirmation that stress tests of EU banks will be published on 23rd July did little to ease fears about the sector, probably because the scenarios considered will not be adverse enough... 12th July 2010 · 1 min read
Europe Economics Weekly Banking strains won’t ease soon On the face of it, there were some encouraging signs last week that the euro-zone banking system is becoming less reliant on the ECB for funding and is switching to borrowing from more conventional... 5th July 2010 · 1 min read
Europe Economics Weekly Euro-zone divergences widening Last week’s news on the euro-zone economy was fairly downbeat and suggested that divergences within the region have continued to widen. Germany, in particular, still seems to be benefitting from the... 28th June 2010 · 1 min read