Filtered by Subscriptions: Europe Economics Use setting Europe Economics
The small rise in the German Ifo index in December was a welcome surprise, but it hardly transforms the outlook for the economy. … German Ifo Survey …
20th December 2011
The Swedish Riksbank’s decision to reduce interest rates is a timely reminder that even the strongest performing European economies are not immune from the effects of the euro-zone debt crisis. We expect further rate cuts next year as the euro-zone’s woes …
The immediate, mechanical effect of a French credit rating downgrade might not be too severe as it has already been at least partly priced in by financial markets. But it could have disastrous implications for the ability and willingness of the …
19th December 2011
A closer look at the euro-zone policymakers’ new plan to “save the euro” has not altered our view that it will not bring the debt crisis to an end, especially since several key components of the deal already appear to be unravelling. Admittedly, this …
December’s rise in the euro-zone composite PMI did nothing to alter our view that the region is heading into a fairly deep recession, regardless of how the debt crisis develops. … Euro-zone Flash PMIs (Dec.), Emp. (Q3) & HICP Inflation …
15th December 2011
October’s euro-zone industrial production data add to evidence that the wider economy may have contracted pretty sharply in Q4. … Euro-zone Industrial Production …
14th December 2011
Recent changes to the ECB’s bank lending operations and the news that national central banks may lend to the IMF have raised hopes that support for the region’s most troubled economies is being increased via the back door. But even if this is so, we doubt …
13th December 2011
Despite rising slightly in December, the German ZEW index points to a risk of recession in the coming months. … German ZEW Survey …
At their summit last week, euro-zone leaders agreed on the basics of a new “fiscal compact” which should help to reduce the risks that another debt crisis such as that seen over the last two years is ever allowed to develop. What the summit did not …
12th December 2011
While the ECB met expectations of a further cut in interest rates and greater support for banks today, it shattered hopes that it is about to fire a silver bullet into the heart of the debt crisis. … ECB shatters hopes of a "silver …
8th December 2011
Hopes that euro-zone policymakers will hatch a new “grand plan” to save the euro-zone may have grown, but evidence is mounting that the region is on the cusp of another deep recession. In November, the euro-zone composite PMI remained well below the …
It is not hard to see why the financial markets have responded positively to the latest proposals to save the euro: they seem to open the door to immediate financial help from the ECB and provide a long-term plan to prevent future crises. But we suspect …
7th December 2011
Recent euro-zone developments may have brought Italy back from the brink again. But Italy will still need years of financial assistance from the rest of the region and to go through years of severe pain if it is to reduce its public debt to a sustainable …
October’s German and Italian industrial production data do little to alter the likelihood that the euro-zone has fallen back into recession in the fourth quarter. … German & Italian Industrial Production …
The breakdown of euro-zone Q3 GDP does nothing to alter our view that the region is on the brink of another deep recession. … Euro-zone GDP Breakdown …
6th December 2011
The financial markets seem to be gambling that the European Central Bank and Germany are bluffing when they say they are not about to come to the euro’s rescue. But given the obstacles still in the way of a decisive solution to the crisis, it is a big …
5th December 2011
We expect a limited form of euro-zone break-up in the next two years to cause widespread economic disruption across the region. And with recent indicators already pointing to recession in a number of countries, no corner of the euro-zone is likely to …
1st December 2011
The European Central Bank will respond to the growing evidence that the euro-zone economy is heading back into recession by cutting interest rates to 1% at its December 8th meeting. What’s more, President Draghi is likely to announce the provision of …
Q3’s Swiss GDP figures confirmed that the economy is finally beginning to suffer from the franc’s strength. With the currency remaining strong and demand from the eurozone set to slump, the economy will struggle to expand at all next year. … Swiss GDP …
Q3’s Swiss GDP figures confirmed that the economy is finally beginning to suffer from the franc’s strength. With the currency remaining strong and demand from the eurozone set to slump, the economy will struggle to expand at all next year. … Swiss GDP (Q3 …
The latest fiscal data suggest that Ireland remains on track to meet its budget deficit target for this year. But the near-term outlook for the public finances in Southern Europe is more downbeat. … Euro-zone Fiscal Monitor …
30th November 2011
The latest euro-zone data revealed a nasty combination of high inflation and rising unemployment to add to the region’s troubles. … Euro-zone Flash CPI & Unemployment …
November’s EC business and consumer surveys support the message from other timely indicators that the euro-zone is entering a deep recession. … Euro-zone EC Survey …
29th November 2011
Q3’s GDP figures revealed that, for now at least, the Swedish economy continues to expand rapidly. Nonetheless, we expect the deepening euro-zone debt crisis to hit Sweden before too long, prompting growth to slow sharply next year. … Swedish GDP …
Q3’s GDP figures revealed that, for now at least, the Swedish economy continues to expand rapidly. Nonetheless, we expect the deepening euro-zone debt crisis to hit Sweden before too long, prompting growth to slow sharply next year. … Swedish GDP (Q3 …
The continued escalation of the euro-zone debt crisis suggests that some form of break-up of the currency union is now likely to come sooner rather than later. We expect Greece to leave the euro in 2012, with at least one further departure in 2013. And …
28th November 2011
The latest monetary data have revealed rising strains in the banking sector as the euro-zone’s debt crisis has deepened. While the ECB has continued to provide banks with liquidity, it has stopped short of buying enough government bonds to tackle the root …
Last week’s rise in German bund yields might have reflected expectations that Germany has finally accepted the need to shoulder more of the peripheral economies’ fiscal risk. After all, German Chancellor Angela Merkel has pushed for a general move towards …
November’s slightly stronger Ifo survey will do little to ease the growing concerns over the outlook for Germany in the wake of yesterday’s unsuccessful bund auction. … German Ifo Survey & GDP Breakdown …
24th November 2011
November’s flash PMI surveys provided further support for our view that the damaging effects of the euro-zone’s ongoing debt crisis are likely to push the region’s economy back into a deep and protracted recession. … Euro-zone Flash PMIs …
23rd November 2011
Jointly issued euro-zone bonds might represent the move into full-blown fiscal union that could be needed to preserve the single currency area in the long run. But opposition from Germany suggests that, at best, such a move is a long way off. And even if …
22nd November 2011
There are still few signs that euro-zone policymakers are close to placing a firewall around the region’s most troubled economies. This, combined with the deteriorating economic outlook, led some of the core economies’ government bond yields to continue …
21st November 2011
Financial markets seem finally to have started to accept that the euro-zone might actually break up. Regular readers will not be surprised to hear that we think this process has considerably further to go. … Are markets starting to price in a euro …
16th November 2011
Although Spain is in a rather better position than its Southern European counterparts, the next Government still faces huge challenges and is unlikely to overcome them without outside help. … Will the new Spanish Government steady the …
Growing concerns about France threaten to take the euro-zone crisis to a new level. If a further rise in bond yields or large bank losses leave France unable to support the periphery, the burden on Germany and the few remaining “core” economies might …
The euro-zone’s modest expansion in Q3 could be the last for some time. With more timely indicators already very weak and the debt crisis set to deepen, the risks of another very sharp recession in the region are growing rapidly. … Euro-zone GDP (Q3) & …
15th November 2011
The idea that the European Central Bank (ECB) will fire a “silver bullet” into the euro-zone crisis by printing vast amounts of money to prop up the Italian bond market looks optimistic. Not only is the ECB itself vehemently opposed to the idea, but it …
14th November 2011
The departure of Silvio Berlusconi may have prompted hopes that Italy has come back from the brink, but we still think that a new government is unlikely to prevent an eventual default. … Italy needs more than a new …
September’s plunge in euro-zone industrial production provided the strongest sign yet that the sector is beginning to act as a major drag on the economy. Given this, the problems of the region’s most fiscally challenged economies look set to grow. … …
We have long warned that Italy represents the single biggest threat to the currency union and last week, that threat loomed large. Bond yields rose to unsustainably high levels, suggesting that Italy will probably need to undertake some type of default. …
With Italian bond yields rocketing and European governments struggling to agree on a plan to raise finance, some have pinned their hopes on the ECB as possible lender of the last resort. While the Bank will continue to intervene in bond markets to try to …
9th November 2011
Recent developments in Italy, coupled with its deteriorating growth prospects and huge structural economic problems, support our view that the Italian government will eventually default. The huge financial and economic consequences could in turn trigger …
The latest data have revealed that the economic downturn is deepening and spreading. October’s drop in the euro-zone composite PMI left it pointing to sharp quarterly falls in GDP of around 1.0%, suggesting that new ECB President Mario Draghi’s warnings …
8th November 2011
September’s falls in German industrial production and euro-zone retail sales confirm that an underlying economic downturn is accompanying the region’s debt crisis. … German Industrial Production & EZ Retail Sales …
7th November 2011
Greek Prime Minister George Papandreou’s extraordinary manoeuvrings last week forced euro-zone leaders to acknowledge openly for the first time that a country could leave the euro-zone. Indeed, preparations are reportedly being made for such a …
The ECB’s decision to cut interest rates by 25 basis points to 1.25% suggests that it is starting to acknowledge the effects of the region’s debt crisis on the wider economy. But, for now at least, the Bank seems unwilling to take bolder steps to prevent …
3rd November 2011
However the Greek referendum episode is ultimately concluded, the fact that euro-zone leaders have for the first time openly acknowledged that a country can leave the single currency is a potentially seismic development in the evolution of the debt …
The chances of Greece holding a referendum appear to be diminishing and a general election seems likely before long, even if the Government wins Friday’s confidence vote. But whatever the precise course of events, we still think that Greece is likely to …
The euro-zone debt crisis is having a severely damaging impact on the European macro-economy. Not only are the troubled peripheral economies set to remain deep in recession, but growth prospects have weakened markedly both in the euro-zone’s core and in …
The Greek government’s surprise decision to hold a referendum on the latest euro-zone rescue package has clearly increased the risks of a bigger and disorderly default on Greek debt and, ultimately, of Greece leaving the euro. Perhaps more importantly, …
1st November 2011
