European Economy


European banks aren’t lending

European monetary aggregate data for February was released overnight by the European Central Bank. This is one of the pieces of data I have been waiting for in order to get a better handle on the broader success of the 3 year long term refinancing operation (LTRO). The annual growth rate of the broad monetary


Reindustrialization of Europe

Cross-posted with permission from MacroTragedy, a Greek-based macro-analyst who you can also follow on Twitter It certainly is no secret that the west is de-industrializing fast and has been doing so for some time now. This trend has been present since the 1980s. Nonetheless, some countries, did manage to buck this trend and re-industrialized. Now


The rain in Spain

Back in November last year I posted on my confusion over the jubilation shown by the citizens of Spain as they elected Mariano Rajoy as their new political leader. Mr Rajoy’s strategy during the election campaign was to say very little about what he was actually intending to do to address his country’s financial problems, preferring


Europe holds back the fire for now

Two weeks ago I wrote a post on Professor Sinn and the growing concern from the German central bank about TARGET2 liabilities. The pressure from the German camp is on-going and late last week it appears they had a win of sorts. The ECB has given the euro zone’s 17 national central banks the power to ban


Chart of the Day: PIIGS yield update

Time for an update on PIIGS (Portugal, Ireland, Italy, Greece and Spain) cost of raising debt. Remember, the Eurozone member states must fund their government deficit spending by selling bonds in the private debt markets. The Euro is effectively a “gold” standard currency, unlike the fiat currencies of other developed countries. The 10 year bond


Europe looks to boost its firewalls

So just another week in Europe which means yet another summit. This time it is in Copenhagen where the main topic on the agenda will be the expansion, or lack thereof, of the European firewalls. If you’re having deja vu don’t worry, we have been here before, and as I explained then the combination of the


Europe performing as expected

Anyone who has been following my European commentary for any length of time will know that I have been running a number of risk themes on Europe due to what I consider to be misguided and one-sided policy which will ultimately be counterproductive. These themes come under the major trend that I see in the Eurozone:


Buiter throws cold water on Europe

Former high flying central bank advisor and current Citigroup Chief Economist, Willem Buiter, last night appeared on Bloomberg radio to politely destroy any notion that the European crisis is over. Among his statements he included high probability forecasts that Greece will need another bailout by year end, Portugal next year, Ireland before long and Spain


Bernanke discusses Europe

Find below Chairman Ben Bernanke of the US Federal Reserve on his latest testimony to the US Congress, focusing on Europe: Developments in Europe and Their Effects on the U.S. Economy For almost two years, developments in Europe have had an important influence on the tenor of global financial markets and on the global economy


The PIIGS Strike Back

So, as I suspected would happen, the push-back against the suicide pact continues. This week Spain managed to convince the EU that it should be allowed to loosen its deficit targets for this year a little in return for a greater push in 2013. Eurozone finance ministers have given unemployment-ridden Spain more wiggle room in cutting