Filtered by Subscriptions: Europe Economics Use setting Europe Economics
The Italian Prime Minister’s package of labour market reforms is a step in the right direction, but reform efforts are moving too slowly to ensure a meaningful reduction in unemployment or improvement in the broader economic outlook in the foreseeable …
31st October 2014
Last week’s bank stress test results, September’s lending data and the ECB’s latest Bank Lending Survey all suggested that conditions in the euro-zone’s banking sector are, on the whole, improving gradually. However, the weakness in Italy and a slowdown …
With euro-zone HICP inflation still close to zero in October and the unemployment rate holding near a record high, there remains a significant risk of deflation in the single currency area. … Euro-zone Flash CPI (Oct.) & Unemployment …
The ECB seems unlikely to announce any new policies this month as it continues to purchase small quantities of covered bonds and prepares to buy asset-backed securities. With the risk of deflation growing, President Mario Draghi may confirm speculation …
30th October 2014
October’s EC Business and Consumer Survey suggests that the euro-zone economy got off to a weak start in Q4, after broadly stagnating in Q3. … Euro-zone EC Survey …
The ECB’s October Bank Lending Survey (BLS) provided further evidence of a slow improvement in euro-zone credit conditions. But lending standards are still tight and the faltering economic recovery may discourage banks from easing them further. … ECB …
29th October 2014
Sweden’s central bank today stepped up its fight against deflation, cutting its main policy rate to a record low of 0% and pushing back the date at which it first expects to raise rates. We think that the Riksbank may well need to resort to currency …
28th October 2014
On the whole, the results of Europe’s bank stress tests were positive, implying that the heavy drag that falls in bank lending have exerted on the euro-zone economy may be set to ease. But poor results for Italy suggest that further falls in bank lending …
27th October 2014
September’s euro-zone monetary data showed further signs of improvement but with lending growth still negative and, given the need for some of the weakest banks to raise further capital, the sector is likely to remain a drag on the recovery. … Euro-zone …
October’s fall in Ifo business sentiment was a blow to hopes that the German recovery should resume at the end of the year and will add to pressure on the Government there to consider a fiscal boost. … German Ifo Survey …
The Comprehensive Assessment of the euro-zone’s banks published on Sunday should go some way towards restoring sentiment in the banking sector. After all, the adverse economic scenarios to which the banks have been subjected are fairly extreme. But the …
24th October 2014
The surprisingly sharp slowdown in the euro-zone economy over recent months may be partly the result of temporary negative factors such as the Ukraine crisis. But the underlying picture is still one of a very fragile recovery and continued risks of …
23rd October 2014
October’s modest rise in the euro-zone composite PMI left it still dangerously close to the no change level of 50. With hard data pointing to a possible fall in GDP in Q3, the region may still have entered its third recession in six years. … Euro-zone …
Rumours that the ECB is considering corporate bond purchases suggest that the Bank is edging further into the realms of quantitative easing. But we think that it will need to buy sovereign bonds as well to ensure a meaningful expansion of its balance …
21st October 2014
The euro-zone’s latest bank stress tests may be more credible than previous versions and hence do more to restore confidence in the region’s banking sector. But the corrective measures required in response could continue to constrain bank lending in the …
The improvement in southern euro-zone nations’ competitiveness has left some core countries, such as Belgium, lagging behind. If Belgium and other uncompetitive economies are unable to close the growing cost gap with the rest of the euro-zone, they risk …
20th October 2014
Last week’s rise in peripheral euro-zone bond yields mainly reflected contagion effects from Greece’s sell-off, rather than general fiscal concerns. Indeed, draft 2015 budgets showed most countries planning to meet their deficit targets this year. …
17th October 2014
While there are some comforting distinctions between the recent jump in Greek bond yields and that which triggered the euro-zone crisis back in 2010, the scale of the economic challenges still facing the peripheral countries suggests that further …
While the recent weakness of financial markets appears hard to square with the economic outlook insome parts of the world like the US, in the euro-zone the markets’ concerns appear more justified. … In the euro-zone at least, the markets have got it …
16th October 2014
The widening of the euro-zone trade surplus in August reflected a drop in importsrelated to weak domestic demand rather than a rise in exports. It still looks like theeconomy failed to grow in Q3 and exports will probably recover only slowly thereafter. … …
The French Government’s submission today of a budget that flouts the European Commission’s fiscal rules will be a key test of EU authorities’ resolve. We expect a compromise to be reached that forces slightly more austerity onto France but also hastens …
15th October 2014
The adverse market reaction to the Greek Government’s plans to exit its IMF bail-out early has underlined the fragility of market sentiment towards the country and presumably made it very unlikely that Greece will be able to carry through its plans. … …
14th October 2014
August’s fall in euro-zone industrial production and the sharp drop in German ZEW investor sentiment in October add to the risk that the single currency area may be entering its third recession in six years. … Euro-zone Industrial Production (Aug.) & …
The European economic recovery has weakened, with the euro-zone now at risk of recession and countries outside the region feeling the effects on their exports. While the euro-zone’s peripheral countries are making some encouraging fiscal and economic …
13th October 2014
Recent renewed calls for the German Government to take advantage of its fiscal room for manoeuvre in order to stimulate its economy have centred on the potentially beneficial effects on its weaker neighbours’ exports. But last week’s German industrial …
10th October 2014
August’s big drop in industrial production all but confirmed that German industry is back in recession and underlined the need for both the ECB and the German Government to give the euro-zone’s biggest economy much more policy support. … German …
7th October 2014
Don’t be fooled by the apparent normalisation of the euro-zone’s financial markets. Conditions in the currency union’s economy are still a very long way from normal. … Will the euro-zone ever escape …
6th October 2014
The ECB confirmed last week that it will start to buy assets outright later this month and that the purchases will not be sterilised. But technically, this probably still amounts to credit easing rather than quantitative easing. And the big picture is …
3rd October 2014
August’s increase in euro-zone retail sales provided a positive sign for consumer spending. But with September’s PMIs revised down in the final estimates, there is more evidence that the euro-zone economy as a whole struggled in Q3. … Euro-zone Retail …
The persistent weakness of euro-zone exports seems to have reflected the high level of the euro, tradelinks with Emerging Europe and cost and regulatory pressures on the region’s exporters. While theeuro’s depreciation should boost export growth somewhat …
President Mario Draghi hinted strongly that a deterioration in the inflation outlook in the coming months would result in the ECB taking bolder, unconventional policy action, leaving the door wide open for full-blown QE before the end of the year. … …
2nd October 2014
Smaller budget deficits were seen in most of the peripheral economies in August, but France’s fiscal position continued to deteriorate. … Euro-zone Fiscal Monitor …
The latest survey indicators seem to have confirmed that the euro-zone’s feeble recovery has already passed its peak. September’s fall in the composite PMI, for example, left it consistent with a modest quarterly expansion in euro-zone GDP of around 0.2% …
1st October 2014
September’s fall in euro-zone inflation to a whisker above zero and August’s weak labour market data will add to the pressure on the ECB to signal further policy support at its meeting this Thursday. … Euro-zone Flash CPI (Sep.) & Unemployment …
30th September 2014
September’s EC Business and Consumer Survey added to the evidence that the eurozoneeconomy struggled to pick up in Q3, after stagnating in Q2. … Euro-zone EC Survey …
29th September 2014
The continued depreciation of the euro exchange rate points to much-needed increases in export growth and imported inflation in the coming months. But this does not eliminate the risk of deflation and the ECB will remain under pressure to implement …
26th September 2014
The ECB now seems to be taking deflation risks more seriously, implementing surprise interest rate cuts in September and leaving the door wide open to quantitative easing. With the economy apparently weakening further since then and the limited uptake at …
25th September 2014
Finland’s dismal post-crisis economic performance is at odds with the ongoing recoveries of its Nordic neighbours. Although these countries share many characteristics, Finland’s economic decline has been caused by a combination of drivers that is specific …
Although August’s euro-zone monetary data showed further signs of improvement, lending is still contracting and, given the low uptake at the ECB’s first TLTRO last week, there is little sign that this will improve dramatically. … Euro-zone Monetary …
September’s Ifo survey brought further worrying signs that the recovery in the German economy is grinding to a halt and underlined the need for both monetary and fiscal policy to provide further support. … German Ifo Survey …
24th September 2014
The small fall in the euro-zone composite PMI in September added to worrying signs that the region’s economy barely expanded in Q3 after Q2’s stagnation. … Euro-zone Flash PMIs …
23rd September 2014
The low uptake at the first of the ECB’s Targeted Longer-Term Refinancing Operations (TLTROs) last week supported our view that the policy is unlikely to be successful at boosting bank lending. It also suggested that the ECB will struggle to expand its …
19th September 2014
Iceland’s economy contracted in Q2 for the third consecutive quarter, raising questions over the sustainability of the economic recovery. But there are still reasons to believe that its economy will continue to improve steadily. … Iceland GDP …
Iceland’s economy contracted in Q2 for the third consecutive quarter, raising questions over the sustainability of the economic recovery. But there are still reasons to believe that its economy will continue to improve steadily. … Iceland GDP (Q2 …
Ireland’s rapid growth in Q2 underlined its status as the euro-zone periphery’s poster boy but could prompt some concerns that it has entered another unsustainable boom. … Ireland GDP …
18th September 2014
With the first of the ECB’s Targeted Longer Term Refinancing Operations taking place this Thursday,this Update addresses some of the key questions regarding their aims and likely effects. While thepolicy may help some struggling banks, it is unlikely to …
17th September 2014
The agreement amongst European finance ministers over the weekend that Ireland can start early repayment of its IMF loan highlighted again the rapid improvement of market confidence in the peripheral economies that has taken place this year. … Early loan …
16th September 2014
September’s small fall in the German ZEW investor expectations index and thesharper decline in the current conditions index added to evidence that the recovery inthe euro-zone’s largest and strongest economy is petering out. … German ZEW Survey (Sep.) & …
