Filtered by Subscriptions: Europe Economics Use setting Europe Economics
April’s EC consumer and business survey supports other evidence that the euro-zone economy could contract again in Q2, marking the region’s longest ever recession. … Euro-zone EC Survey …
29th April 2013
Hopes that euro-zone policymakers are set to sanction a reduction in the pace of fiscal tightening across the region rose further last week after EC President Jose Manuel Barroso suggested that the austerity-driven policy response to the region’s crisis …
The latest euro-zone monetary data showed little sign of an improvement in financial market conditions or a pick-up in provision of credit to the private sector. … Euro-zone Monetary Indicators Monitor (Mar. …
26th April 2013
Household spending in Denmark has barely recovered since its housing bubble burst in 2007 and there appears little respite ahead for households. With rising debt now fuelling housing booms in Sweden and Norway, Denmark offers a sobering insight into what …
25th April 2013
Having stated following its last meeting that it stood ready to act, it would be a big disappointment if the ECB did nothing at the forthcoming meeting on May 2nd. On balance, we think that an interest rate cut is marginally more likely than not, but it …
April’s fall in the German Ifo business climate indicator will add to concerns that the recovery there is starting to falter. … German Ifo Survey …
24th April 2013
April’s euro-zone PMI survey provided another clear sign that a sustained economic recovery in the region is still some way off. … Euro-zone Flash PMIs …
23rd April 2013
The re-election of President Napolitano suggests that Italy could soon have a new government in place. But an end to the political deadlock will not resolve Italy’s deep economic problems. … Italy’s problems are far from …
22nd April 2013
The news that the euro-zone budget deficit shrank again last year will be hailed as evidence by some that austerity is working. But the fact that most economies’ deficits have fallen by less than expected and that the consolidation has coincided with …
February’s record-breaking euro-zone trade surplus of €12bn suggests that the external sector provided the wider economy with a boost in Q1. But we doubt that the sector is about to kick start an economic recovery. After all, much of the increase in the …
We have previously warned that Belgium shares several characteristics with peripheral economies, such as high public debt, banking problems and falling competitiveness. But the economy also enjoys several strengths which, combined with easing banking …
18th April 2013
The Swedish Riksbank’s decision to leave interest rates unchanged at 1.0% was no surprise given the recent run of encouraging economic data. But while the chances of an imminent cut have perhaps receded, we still think that the Riksbank will probably …
17th April 2013
The Portuguese Government’s proposed new spending cuts should allow it to receive the next tranche of its bail-out loan and have its previous loans extended. But while this would provide some much-needed breathing space, we suspect that a second bail-out …
16th April 2013
April’s fall in the German ZEW index highlighted investors’ fears that the German recovery will falter amid continued concerns about the euro-zone’s periphery. … German ZEW Survey (Apr.) & Euro-zone Final CPI …
Recent events have underlined our view that the Slovenian government will struggle to finance itself this year despite the small size (relative to GDP) of its troubled banks and public debt. To avoid a bail-out, the government will need rapidly to put in …
15th April 2013
The drop in peripheral euro-zone bond yields following the Bank of Japan’s announcement that it is set to expand its quantitative easing programme dramatically has further relieved the near-term pressure on the ECB to implement its own Outright Monetary …
The small rise in euro-zone industrial production in February suggests that the sector will avoid another steep fall in output in Q1. But there is still no sign that the sector is about to spearhead an economic recovery. … Euro-zone Industrial Production …
12th April 2013
The dramatic increase in the size of the proposed rescue package for Cyprus both underlines the depth of the problems facing the country and poses further questions over the likely impact of future euro-zone bail-outs on both depositors and bondholders. …
11th April 2013
Recent events in Italy, Cyprus and Portugal have put a dent in hopes that the three-year crisis in the euro-zone is finally drawing to a close. Meanwhile, previous tentative signs that the broader economy might be recovering in response to the period of …
10th April 2013
Recent news from Greece has provided tentative signs that the economic situation there is improving. But we still think that the economy will remain in recession for longer than the Troika expects and that another debt restructuring will be needed to …
February’s German industrial production figures suggest that the economy’s engine of growth is still just about ticking over, but only very slowly. … German Industrial Production (Feb. …
8th April 2013
Despite ECB President Mario Draghi’s assurance last week that the Bank “stands ready to act”, he gave very little indication of what support it might offer. An imminent interest rate cut is possible, but we do not see it as a done deal and fear that it …
After leaving interest rates on hold today, ECB President Draghi acknowledged the downturn in the economic outlook and stated that the Bank stood ready to act in future. However, he provided little hope that policies considered to be within the Bank’s …
4th April 2013
Slovenia is indeed different from Cyprus, as its government has been at pains to point out, but the country may nonetheless struggle to overcome its banking crisis without outside help. That said, any Slovenian bail-out would be unlikely to shake the …
Recent activity indicators suggest that the euro-zone economy had started to lose some of its momentum even before the recent escalation of the crisis in Cyprus. Admittedly, most survey indicators are still stronger than they were a few months ago and …
3rd April 2013
While headline euro-zone inflation fell again in March, there were some signs of a rise in core price pressures. But these are likely to prove temporary. … Euro-zone Flash CPI (Mar. …
The recent news from Italy suggests that it could still be some time before a new government is in place. While there is little sign, for now at least, that this has damaged business and consumer sentiment, we expect Italy to remain deep in recession for …
2nd April 2013
The further rise in euro-zone unemployment in February, coupled with the low level of March’s manufacturing PMI, confirmed the underlying weakness of the economy. … Euro-zone Unemployment (Feb.) & Manufacturing PMI …
The relative calmness of the financial markets during the Cyprus episode and after the Italian election might be seen as an indication that the worst of the euro-zone crisis is now behind us. But it is the behaviour of bank deposits in Cyprus and …
1st April 2013
The crisis in Cyprus, together with the continued deterioration in indicators of euro-zone economic activity, should lead the ECB to strike a more supportive tone at this month’s press conference. But while an interest rate cut is possible, we suspect …
28th March 2013
The latest euro-zone monetary data showed more mixed developments in financial markets than in previous months. And there is still limited evidence of a pick-up in credit to the private sector. … Euro-zone Monetary Indicators Monitor (Feb. …
February’s German retail sales data suggest that spending rose in Q1. But sales are still falling compared to a year earlier and with March’s unemployment data confirming that the labour market recovery is fading, a strong consumer recovery seems too much …
Swiss GDP data for Q4 confirmed that, while growth is clearly slowing, the economy has continued to outperform most others in Europe. But we expect the economy to stagnate this year as problems in the euro-zone cause exports to fall. … Swiss GDP (Q4 …
Italy and Spain missed their 2012 deficit targets by a small margin and timelier data point to further likely slippage in the initial stages of this year. … Euro-zone Fiscal Monitor …
27th March 2013
Cyprus has shown that even the smallest members of the euro-zone can rock the single currency area. Slovenia is probably the next country most likely to be forced into a bailout programme, but Malta and Luxembourg are also vulnerable given the size of …
March’s fall in the euro-zone EC Economic Sentiment Indicator (ESI) provides a further sign that the euro-zone economy had started to lose momentum even before the recent escalation of the crisis in Cyprus. … Euro-zone EC Survey (Mar. …
While capital controls could be crucial to preventing the collapse of the Cypriot banking system in the coming weeks, their persistence or more widespread use would threaten to undermine the basic functioning of the currency union. … Capital controls: …
26th March 2013
While the Cypriot banking package has averted imminent disaster, the episode will have damaging effects on Cyprus’s economy and has raised new questions over the stability of the currency union. … Cyprus: Disaster averted, but with lasting …
25th March 2013
While the successful formulation of a new plan to avoid bankruptcy in Cyprus remains in the balance, it looks likely that some form of package will be put together in order to ensure the continued support of the ECB for the country’s banks and hence avoid …
March’s fall in the German Ifo business climate indicator is another sign that the recovery in the euro-zone seen over the past six months or so might already be running out of steam. … German Ifo Survey …
22nd March 2013
While Ireland impressively matched Germany’s economic expansion in 2012, the recent slowdown in the quarterly path of GDP is a reminder that the country still faces major challenges. … Ireland GDP …
21st March 2013
The fall in the composite euro-zone PMI in March suggests that even before the recent uncertainty surrounding Cyprus’ future, the euro-zone economy had begun to contract more sharply. … Euro-zone Flash PMIs …
The Cypriot Parliament’s overwhelming rejection of the proposed levy on bank deposits adds to the uncertainty surrounding the future of Cyprus and increases the risk of the country eventually exiting the single currency. … What next for …
20th March 2013
March’s small rise in the German ZEW index left it at a high level. But as fears for Italy and Cyprus hit sentiment in future, we doubt that Germany’s recovery will be as strong as the survey now suggests. Meanwhile, January’s rise in Italian industrial …
19th March 2013
The plan to impose losses on Cypriot bank depositors has potentially serious implications for financial stability in the euro-zone as a whole. Cyprus is arguably a special case, but given remaining risks elsewhere in the euro-zone, depositors might not be …
18th March 2013
Last week brought mixed news in the debate on growth versus austerity. On the one hand, EU leaders discussed and (to some extent) advocated growth policies at an EU summit. What’s more, the European Commission seemed likely to accept that France would …
The latest figures on consumer prices and labour costs in the euro-zone emphasised that the inflation outlook presents no obstacles to the provision of further policy support from the ECB. … Euro-zone Final CPI (Feb.) & Labour Costs …
15th March 2013
The opening of Parliament on Friday will do little to lift the political uncertainty in Italy. Accordingly, a prolonged period of policy deadlock looks likely to fuel concerns over the outlook for Italy’s economy and public finances. … Italian deadlock …
14th March 2013
The Norges Bank’s decision to leave the policy rate unchanged reflects the dilemma facing the Bank as a strong currency prevents it from hiking rates to stem a housing boom. These countervailing pressures are likely to keep policy on hold until late-2014 …
