The Great Debate UK
Markets thrive on certainty. Anything that smacks of uncertainty, fence-sitting or indecision will lead to market turbulence, as investors punish those who don’t tell them how it is.
This is exactly what we are seeing in Europe right now. The markets are losing patience with the EU’s inability to come up with a credible plan to fight the sovereign debt crisis and that is why it is escalating at an alarming rate.
In general, investors in credit markets are a canny bunch. Bond spreads between Germany and Greece, Ireland, Portugal, Spain and Italy have already blown out, but in recent days spreads between Germany and France, Belgium and even Austria have increased to their widest level for more than two years.
So what does this all mean? In short it suggests that bond investors are going off Europe, even those members who were previously considered safe are no longer out of harm’s way. The credit markets are turning against the political make-up of the currency bloc and until concrete changes are made to the structure of the euro zone the pressure on European credit markets is unlikely to abate.
By Kathleen Brooks. The opinions expressed are her own.
The markets always suffer from a chronic case of short-termism, but once a sovereign debt crisis takes hold it is very difficult to reverse. Investors may be concentrating on Greek, Irish and Portuguese funding needs for the next 24- 36 months now, but it won’t be long before investors start to scrutinise longer-term liabilities that are currently being clocked up for the next 10,20 even 30 years.
It seems barely a week goes by without another shock report about the ever-widening gap between those at the top of the earnings distribution and the rest of us. The facts are by now well-established. Throughout the Western world, but most noticeably in Britain and America, the earnings of the top one or two percent are accelerating into the stratosphere, leaving the middle class a long way behind, and the working class completely out of sight. How can one explain this global phenomenon?
Academic economics seems to be taking a surprisingly long time to reach a definitive answer, but I suspect there will turn out to be two long term trends at work here.
-Kathleen Brooks is research director at forex.com. The opinions expressed are her own.-
The saying goes that you only really know who your friends are during times of crisis. Well European officials must have been beaming after two of the world’s largest economies promised to purchase the debt of the currency bloc’s most troubled nations. China came out first and pledged to “support Spain’s financial sector”, through participating in its upcoming debt auctions. Likewise, Japan pledged to purchase a quarter of the upcoming euro zone bond sale that will help fund the bailout of Ireland.
By Peter Thal Larsen and Neil Unmack
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
LONDON -- Forcing banks to bail out countries may have the ring of poetic justice. But Europe's idea of using a bank levy to capitalise a sovereign crisis fund is circular -- and dangerous.
– John Keilthy is Managing Partner of ReputationInc Ireland and is a former business journalist and director and chief operating officer of NCB Group. Andrew Hammond is a Director in ReputationInc’s London office and was formerly a UK Government Special Adviser. The opinions expressed are their own. –
In recent weeks, the focus for Ireland and indeed the world’s financial markets has been on devising a plan to remedy the country’s precarious banking and fiscal affairs.
(Photo: Pope Benedict XVI blesses a nativity scene at the Vatican December 15, 2010/Tony Gentile)
Pope Benedict voiced the Catholic Church's deep concern over "hostility and prejudice" against Christianity in Europe on Thursday, saying creeping secularism was just as bad as religious fanaticism. In the message for the Roman Catholic Church's World Day of Peace, marked on Jan. 1, he also reiterated recent condemnations of lack of religious freedom in countries in the Middle East where Christians are a minority, such as Iraq and Saudi Arabia.
He said Christians were the most persecuted religious group in the world and that it was "unacceptable" that in some places they had to risk their lives to practise their faith. But he reserved his strongest words for Europe, where the Church says it is under assault by some national governments and European institutions over issues such as gay marriage, abortion and the use of Christian religious symbols in public places.
The following is a guest contribution. Reuters is not responsible for the content and the views expressed are the authors’ alone. Ibrahim Kalin is senior advisor to Turkish Prime Minister Tayyip Erdogan. This article first appeared in Today's Zaman in Istanbul and is reprinted with its permission.
By Ibrahim Kalin
Has multiculturalism run its course in Europe? If one takes a picture of certain European countries today and freezes it, that would be the logical conclusion.
Joschka Fischer was never one to mince words when he was Germany's foreign minister in the late '90s and early noughts. So it is not overly surprising that he has painted a picture in a new post of a world with only two powers -- the United States and China -- and an ineffective and divided Europe on the sidelines.
More controversial, however, is his view that China will not only grow into the world's most important market over the coming years, but will determine what the world produces and consumes -- and that that will be green.
from The Great Debate:
How do you reconcile the traditions of many Muslim immigrants with the freedoms and values of 21st century Western Europe?
It's a question that has led to periodic outbursts of vigorous debate from France to Holland and Switzerland. In Germany, the discussion has been relatively subdued. Until now.