Home » Posts tagged 'eurozone' (Page 13)
Tag Archives: eurozone
Eurozone economy enters deflation
Eurozone economy enters deflation
In spite of all the warnings and the predictions to the contrary, the eurozone economy slipped into deflation in December, according to estimates published by Eurostat today (7 January).
It estimated that inflation in the eurozone in December was -0.2%, dragged down in particular by falling oil prices. Energy costs fell by 6.3% in December.
The reading will put further pressure on the European Central Bank (ECB) to launch fresh monetary measures and in particular a programme of quantitative easing. Its next decision-taking meeting is scheduled for 22 January.
Under such a programme, trialled successfully by the central banks of the United States, Japan and the United Kingdom over the last few years, the ECB would buy up government bonds, injecting money into the eurozone economy with the aim of pushing up growth and inflation.
…click on the above link to read the rest of the article…
Operation Helicopter: Could Free Money Help the Euro Zone?
Operation Helicopter: Could Free Money Help the Euro Zone?
It sounds at first like a crazy thought experiment: One morning, every resident of the euro zone comes home to find a check in their mailbox worth over €500 euros ($597) and possibly as much as €3,000. A gift, just like that, sent by the European Central Bank (ECB) in Frankfurt.
The scenario is less absurd than it may sound. Indeed, many serious academics and financial experts are demanding exactly that. They want ECB chief Mario Draghi to fire up the printing presses and hand out money directly to the people.
The logic behind the idea is that recipients of the money will head to the shops, helping to turn around a paralyzed economy in the common currency area. In response, companies would have to increase production and hire more workers, leading to both economic growth and a needed increase in prices because of the surge in demand.
ECB Has Lost Control
Currently, the inflation rate is barely above zero and fears of a horror deflation scenario of the kind seen during the Great Depression in the United States are haunting the euro zone. The ECB, whose main task is euro stability, has lost control.
…click on the above link to read the rest of the article…
Samaras Warns of Euro Exit Risk as Greek Campaign Starts
Samaras Warns of Euro Exit Risk as Greek Campaign Starts
Greece’s political parties embarked on a flash campaign for elections in less than three weeks that Prime Minister Antonis Samaras said will determine the fate of the country’s membership in the euro currency area.
Samaras used a Jan. 2 speech to warn that victory for the main opposition Syriza party would cause default and Greece’s exit from the 19-member euro region, while Syriza leader Alexis Tsipras said his party would end German-led austerity. Der Spiegel magazine reportedChancellor Angela Merkel is ready to accept a Greek exit, a development Berlin sees as inevitable and manageable if Syriza wins, as polls suggest.
The high-stakes run-up to the Jan. 25 vote returns Greece to the center of European policy makers’ attention as they strive to fend off a return of the debt crisis that wracked the region from late 2009, forcing international financial support for five EU countries. While Greek 10-year bond yields rose 16 basis points to 9.41 percent today from a post-crisis low of 5.57 percent in September, the relative improvement in yields from Italy to Ireland suggests that the contagion has been contained. The benchmark ASE stock index fell 2.4 percent to 816.46 at 11:42 a.m. in Athens.
…click on the above link to read the rest of the article…
UK’s Cameron will move EU referendum forward if possible | Reuters
UK’s Cameron will move EU referendum forward if possible | Reuters.
(Reuters) – Prime Minister David Cameron said on Sunday he would like to bring forward a planned referendum on Britain’s membership of the European Union from 2017 if possible.
Under pressure from Eurosceptic members of his own party and the rise in popularity of the anti-EU UK Independence Party, Cameron has promised to renegotiate Britain’s ties with the 28-nation bloc and try to claw back powers to London from Brussels.
He has said he will hold a referendum in 2017 if his Conservatives win a national election in May.
“The referendum must take place before the end of 2017. If I think we could do that earlier I would be delighted. The sooner I can deliver on this commitment of a renegotiation and a referendum … the better ,” he told the BBC’s Andrew Marr Show.
With immigration a top issue for voters ahead of what looks set to be Britain’s closest-fought election in modern history, Cameron has set out plans to restrict EU migrants’ access to welfare payments in Britain.
Peak Irony in No-Exit Union: As Grexit Chaos Resurges, Lithuania Joins
Peak Irony in No-Exit Union: As Grexit Chaos Resurges, Lithuania Joins
On January 1, 2015, the Eurozone quietly welcomed a new member, Lithuania, to its fold. The former Soviet satellite became the 19th EU Member State to have joined the increasingly beleaguered currency union.
According to an opinion poll conducted by Berent Research Baltic on behalf of the Bank of Lithuania, 53% of the Lithuanian population support euro adoption. And who wouldn’t trust a central bank to conduct an honest and fair survey of public approval of something as insignificant as the adoption of a new currency?
One group that clearly didn’t was the eurosceptic Europeans United for Democracy (EUD) party which commissioned a poll of its own via Baltics Survey. The results could not have diverged more from the Bank of Lithuania’s poll, with only 26% of respondents approving of the government’s decision while 49% disapproved of it.
Who’s to say which is right? Or at least righter? In the end the point is moot since, in time-honored EU fashion, no public referendum was held on the matter. Instead the final decision was taken in parliament while the Supreme Administrative Court blocked any attempts to call a referendum. After all, one can never be too careful these days: voters might have voted NO, just as French, Dutch and Irish voters did in their respective referendums on the Nice Accord, to no avail.
…click on the above link to read the rest of the article…
A statement full of Keynesian fallacies – Ludwig von Mises Institute Canada
A statement full of Keynesian fallacies – Ludwig von Mises Institute Canada.
From today’s Open Europe news summary:
Draghi: ECB ready to initiate QE to counter low inflation
In an interview with Handelsblatt, ECB President Mario Draghi warned that persistently low inflation in the Eurozone meant that “the risk that we do not fulfill our mandate of price stability is higher than six months ago”. Draghi reiterated that the ECB was ready to step in with a programme of Quantitative Easing, noting that “We are in technical preparations to adjust the scope, speed and composition of our measures for early 2015.”
ECB President Mario Draghi’s latest statement is full of Keynesian fallacies, to wit:
1. That price stability is a worthy goal. No, monetary stability is essential, so that prices may reflect the true preferences and productive limitations of the market in order to allocate scarce resources to their most important purposes as dictated by the market.
BBC News – Europe in 2015: A year of insecurity
BBC News – Europe in 2015: A year of insecurity.
For Europe, 2015 will witness another attempt to reach a place of safety. For the past two years European officials and leaders have declared the economic crisis over. In the past six months a sense of foreboding has returned.
The dangers are not the same as 2012. There is no danger of countries being unable to fund their debts. The threat now is of stagnation and deflation.
European officials have warned time and again that the failure to create growth and new jobs risks not just social tension but support for the European project. Currently the economy will not return to its 2007 level until 2020.
In 2015 economic recovery will be uneven. Demand is chronically weak. Germany will remain the engine room of the European economy but will not be the powerhouse it was two years ago. Growth in France will be around 0.7%. Italy should edge away from recession but the eurozone is not expected to achieve growth of more than 1% and that will not be enough to dent an unemployment rate that remains at 11.7%.
Greek election uncertainty fuels concerns over eurozone stability | World news | The Guardian
Greek election uncertainty fuels concerns over eurozone stability | World news | The Guardian.
Early elections with the potential to destabilise the eurozone could be called in Greece next year, after the country’s 300 MPs failed to elect a president in their first round of voting.
In a ballot of MPs that disappointed government officials, 160 lawmakers backed Stavros Dimas, the conservative-led coalition’s candidate and former European commissioner.
“There are another two rounds ahead of us,” Antonis Samaras, the prime minister, said, emerging from the parliament after the vote. “I hold hope that a president will be elected. The conditions are difficult for the country, and I am certain that deputies are aware that the country must not enter troubled times.”
Earlier in the day, the embattled leader had warned that failure to elect a head of state could prove fatal for the country’s future in the eurozone.
EU Countries Granted the Right to Ban GMO Crops | Environment News Service
EU Countries Granted the Right to Ban GMO Crops | Environment News Service.
A political agreement on new legislation to allow EU member states to restrict, or ban, the cultivation of crops containing genetically modified organisms, GMOs, on their own territory, even if it is allowed at EU level, was reached by Parliament and Council delegations last night.
Starting next spring, member states will be able to ban GMOs stating environmental policy objectives as a justification. These objectives would relate to environmental impacts other than the risks to health and environment assessed during the scientific risk assessment.
Bans could also include groups of GMOs designated by crop or trait. GMO crops in Europe include: corn, soy, sugar beet and rapeseed, among others.
Speaking for the Italian Presidency of the EU, Italy’s Environment Minister Gian Luca Galletti said, “With the agreement in principle reached between the Council, the Commission and the EU Parliament in Brussels we are approaching a great European goal under the Italian Presidency: the recognition of sovereignty and autonomy of the single States as regards the cultivation of GMOs.”
…click on the above link to read the rest of the article…
Europe: Is the Union over? – Head to Head – Al Jazeera English
Europe: Is the Union over? – Head to Head – Al Jazeera English.
“There has been no unelected prime minister in Europe. We are not banana republics. We are democracies,” argues Viviane Reding, the former vice president of the European Commission and fierce defender of the European Union.
But are European institutions truly democratic? And are the EU’s austerity policies to blame for the rise of the far-right?
In this episode of Head to Head, Mehdi Hasan challenges the Luxembourg politician Viviane Reding and current member of the European parliament, on the future of Europe and asks why she believes that it is essential that Europe becomes a unified superpower.
We also explore whether Germany has imposed savage cuts on the so-called periphery countries, and whether the EU should take responsibility for the Ukraine crisis.
…click on the above link to read the rest of the article and view the video…
Not Just The Franc Showing Euro Concerns | Alhambra Investment Partners – We Are Different.
Not Just The Franc Showing Euro Concerns | Alhambra Investment Partners – We Are Different..
With Europe reporting GDP, reactions have been somewhat varied. In some places, it was taken as not as bad as feared, while others were downright cheered by a lack of total collapse, as if that is now the standard for economic progress. Since GDP tends to be noisy in the short run, the major components, the economic base, continues to show anything but more of the same. There was nothing, to my mind, in the GDP report that indicated an inflection away from stagnation or slight decline. That is perfectly in-line with the trend that has unfortunately developed since midyear, pushing the ECB toward outward desperation.
The most striking aspect of the European economy post-2007 has been lower cycle peaks at every juncture. In industrial production and trade, the “recovery” after the initial blast of the Great Recession never came close to matching pre-crisis levels. Now after another “cycle”, the peak is yet again below this time even 2011. What we see, then, is no recovery at all but rather an ebb and flow in an otherwise downward direction toward full-scale depression.
…click on the above link to read the rest of the article…
The Economy Of The Largest Superpower On The Planet Is Collapsing Right Now
The Economy Of The Largest Superpower On The Planet Is Collapsing Right Now.
How do you fix a superpower with exploding levels of debt, that has a rapidly aging population, that consumes far more wealth than it produces, and that has scores of zombie banks that could collapse at any moment. You might think that I am talking about the United States, but I am actually talking about Europe. You see, the truth is that the European Union has a larger population than the United States does, it has a larger economy than the United States does, and it has a much larger banking system than the United States does. Most of the time I write about the horrible economic problems that the U.S. is facing, but without a doubt economic conditions in Europe are even worse at the moment. In fact, there are many (including the Washington Post) that are calling what is happening in Europe a full-blown “depression”. Sadly, this is probably only just the beginning. In the months to come things in Europe are likely to get much worse.
First of all, let’s take a look at unemployment. If the U.S. was using honest numbers, the official unemployment rate would probably be somewhere close to 10 percent. But in many nations in Europe, the official unemployment rate is already above the ten percent mark…
France: 10.2%
Poland: 11.5%
Italy: 12.6%
Portugal: 13.1%
Spain: 23.6%
Greece: 26.4%
…click on the above link to read the rest of the article…
Errors Found In The ECB’s “Confidence-Boosting” Stress Test | Zero Hedge
Errors Found In The ECB’s “Confidence-Boosting” Stress Test | Zero Hedge.
Just when you thought the humor out of the central bank that just released a stress testwhose adverse scenario did not even assume the most likely Eurozone outcome, i.e., deflation, couldn’t get any better, moments ago we learned that the test, which was supposed to restore confidence in Europe’s banking system and in the oversight and regulatory abilities of Europe’s central bank, had “errors and inconsistencies” which forced the ECB to “briefly remove from its website” the results of Italy’s most insolvent bank, Monte Paschi, “after discovering an error in its key capital ratio”, a bank which based on the ECB’s (faulty?) failure assessment was halted countless times earlier today after crashing so hard the regulator had to ban selling it short. Again.
The WSJ tries to put some lipstick on this latest Snafu by the former Goldmanite in charge of Europe’s money printer :
While the tests have been going on since last year, European officials were scrambling until the last minute to finalize the data. On Sunday morning, barely an hour before the results were due to be released, the EBA official in charge of the stress-test process was still scrambling to rubber stamp the numbers, causing him to show up 10 minutes late to a briefing with journalists.
Shortly after the results were published, ECB officials detected an error in the 2013 capital ratio of Monte dei Paschi, Italy’s third-largest bank, according to a person familiar with the matter. The error, on the first page of a template posted on the ECB website, was important because Monte dei Paschi was the worst performer in the stress tests and therefore was at the center of investor attention Sunday.
…click on above link to read the rest of the article…
The Mother of all Jobs in the EU | Wolf Street
The Mother of all Jobs in the EU | Wolf Street.
Ironically, the more Eurocrats try to integrate the EU through imposition of fiscal, monetary, banking, and political straitjackets, the closer the Union comes to disintegration.
By Don Quijones, freelance writer, translator in Barcelona, Spain. Editor at WOLF STREET. Mexico is his country-in-law. Raging Bull-Shit is his modest attempt to scrub away the lathers of soft soap peddled by political and business leaders and their loyal mainstream media. This article is a Wolf Street exclusive.
As of a few days ago, the European Union has a new government and president to run its affairs. In the deeply dysfunctional model of European “democracy,” neither the Commission not its President were elected by European voters. Only the 400-odd comfortably closeted MEPs had a chance to vote on them.
The new President is Jean-Claude Juncker, a man who notoriously confessed to lying only when the going gets tough and who, as prime-minister of Luxembourg for close to two decades, is largely credited with reinventing the tiny landlocked principality into one of Europe’s largest tax havens and dirty money channels (just behind Switzerland and the City of London).
…click on the above link to read the rest of the article…
The Scariest Number Revealed Today: $1.114 Trillion In Eurozone Bad Debt | Zero Hedge
The Scariest Number Revealed Today: $1.114 Trillion In Eurozone Bad Debt | Zero Hedge.
As we previously reported, the ECB’s latest stress test was once again patently flawed from the start. Why? Because as we noted earlier, in its most draconian, “adverse” scenario, the ECB simply refused to contemplate the possibility of deflation. And here’s why. Buried deep in the report, on page 75 of 178, is the following revelation which contains in it the scariest number presented to the public today.
Due to the fact that on average banks’ internal definitions were less conservative than the simplified EBA approach, the application of the simplified approach led to an increase in NPE stock of €54.6 billion from €743.1 billion to €797.7 billion. The CFR and the projection of findings led to an additional increase in NPE of €81.3 billion, resulting in a total increase €135.9 billion to €879.1 billion of post-CFR NPEs across the participating banks as a result of the AQR. The impact of the application of the EBA simplified approach and the credit file review on the stock of NPEs varied amongst debtor geographies, with overall increases among SSM debtor geographies ranging from 7% to 116%.
…click on the above link to read the rest of the article…
