Eurobond or bust

May 29, 2012

Many market analysts consider a deeper fiscal union the only way to hold together a troubled euro zone. And while Germany continues to loudly reaffirm its long-standing opposition to shared euro zone bonds, the region is in many ways already headed towards implicit mutual responsibility for national debts. Berlin will likely come under increasing pressure to succumb, especially now that “core” European countries are entering the crosshairs of speculators .

Euro zone ying and yang

By Mike Peacock
May 28, 2012

The ying.
Sources told us last night that Spain may recapitalize stricken Bankia with government bonds in return for shares in the bank. That would presumably involve an up-front hit for Spain’s public finances (it is already striving to lop about 6 percentage points off its budget deficit in two years) which might be recouped at some point if the shares don’t disappear through the floor.
The ECB’s view of this will be crucial since the plan seems to involve the bank depositing the new bonds with the ECB as collateral in return for cash. If it cries foul, where would that leave Madrid?

Euro zone may struggle with its own Lost Decade

May 24, 2012

Additional Reporting by Andy Bruce and polling by Rahul Karunakar and Sumanta Dey.

Germany’s zero bound

May 4, 2012

The ultra-low rates offered by two-year German bonds reflect just how worried investors have become about the euro zone debt crisis and the continent’s sluggish economy.

“There are human beings involved” in austerity debate

May 3, 2012

The inventors of democracy and its greatest 18th century champions both go to the polls this weekend. Greek and French voters will try to elect governments they hope will help release their economies from the grips of the euro zone debt crisis.

Dancing on the edge of a (fiscal) cliff

May 2, 2012

With hundreds of billions worth of stimulus measures set to expire on Jan. 1, investors are all too aware that the United States is hurtling toward what economists are calling “a fiscal cliff.” It’s just that most seem to think Congress will execute one of its typical last-minute, hairpin turns to avoid plunging the economy over the edge.

Tumultuous euro zone week

By Mike Peacock
April 30, 2012

A week where every facet of the euro zone debt saga will come from all angles.

The major events are the French presidential run-off and Greek general elections on Sunday, May 6.
 
In the former case, a likely socialist Francois Hollande victory could cause some market jitters given his rhetoric about the world of finance. But we’ve looked at this pretty forensically and actually there may not be much to scare the horses. Yes he is making growth a priority (but even the IMF is saying that’s a good idea) yet his only fiscal shift is to aim to balance the budget a year later than Sarkozy would. And, contrary to some reports, he is not intent on ripping up the EU’s new fiscal rules. And of course, the bond market will only allow so much leeway.

A curate’s egg — good in parts

By Mike Peacock
April 23, 2012

An action-packed weekend with both good and bad news for the euro zone, which may — net — leave its prospects little clearer.

IMF crisis funds: Why nobody really cares

April 20, 2012

With reporting from Steven C. Johnson and Nick Olivari

A lot of time and money is spent on high-profile multilateral gatherings like this weekend’s International Monetary Fund meeting in Washington. The central story this time is the Fund’s effort to raise more funds (no pun intended), which appears to have been successful as G20 nations committed more than $430 billion in new funds.

Spain: ¿Cómo se dice “contagion”?

April 4, 2012

It was not a good day for Spain.

The euro zone’s fourth largest economy had to pay dearer to borrow through medium-term bonds, a sign that concerns over the country´s fiscal problems was curbing appetite for its debt. It sold 2.6 billion euros of 2015, 2016 and 2020 paper – at the low end of the target range.