A change of tack

By Mike Peacock
May 29, 2013

Today sees the release of the European Commission’s annual review of its members’ economic and debt-cutting policies. It’s a big moment.

Why a German exit from the euro zone would be disastrous – even for Germany

May 28, 2013

Let’s face it: “Gerxit” doesn’t roll of the tongue nearly as smoothly as a “Grexit” did. While Europe continues to struggle economically, fears of a euro zone break-up have receded rapidly following bailouts of Greece and Cyprus linked to their troubled banking sectors.

Greek bond rebound masks stark economic reality

May 15, 2013

Ten-year Greek government bond yields tumbled to their lowest in nearly three years one day after Fitch upgraded the country’s sovereign credit ratings.

There is no sovereign debt crisis in Europe

May 15, 2013

Evidence that Europe’s austerity policies are not working was in ample supply this morning. The euro zone as a whole is now in its longest recession since the start of monetary union. France has succumbed to the region’s retrenchment. Italy’s GDP slump is now the lengthiest on record. And Greece, still in depression, shrank another 5.3 percent in the first quarter.

Finally, an Italian government

By Mike Peacock
April 29, 2013

A weekend packed with action to reflect on with more to come.

Top of the list was the formation (finally) of an Italian coalition government. Market reaction is likely to be positive, although Italian assets rallied last week, and today’s auction of up to 6 billion euros of five- and 10-year bonds should continue this year’s trend of being snapped up by investors. Italian bond futures have opened about a third of a point higher.

German ghost of inflations past haunting European stability: Posen

April 15, 2013

“Reality is sticky.” That was the core of Adam Posen’s message to German policymakers on their home turf, at a recent conference in Berlin.

from The Great Debate:

The year ahead in the euro zone: Lower risks, same problems

By Nouriel Roubini
January 14, 2013

Financial conditions in the euro zone have significantly improved since the summer, when euro zone risks peaked because of German policymakers’ open consideration of a Greek exit, and the sovereign spreads of Italy and Spain reached new heights. The day before European Central Bank President Mario Draghi’s famous speech in London in which he announced that the ECB would do “whatever it takes” to save the euro, bond yields in Spain and Italy were at 7.75 percent and 6.75 percent, respectively, and rising. When the ECB announced its outright monetary transactions (OMT) bond-buying program, the euro zone was at risk of a collapse.

Mario and Angela — the euro zone’s pivotal pair

By Mike Peacock
December 17, 2012

European Central Bank chief Mario Draghi and Germany’s Angela Merkel – the two most important people in the euro zone debt crisis response – take to the stage today, the former giving lengthy testimony in the European Parliament, the latter holding a news conference with foreign journalists.

Greek bailout deal tantalisingly close

By Mike Peacock
December 12, 2012

The Greek bond buyback has fallen a little short, leaving Athens and its lenders to plug a 450 million euro hole. The euro zone and IMF had given Greece 10 billion euros to buy back enough debt at a sharp discount so that it could retire 20 billion euros worth of bonds and knock that amount off its debt pile. Without that, the deal to start bailout loans flowing to Athens again would fall through.

Italy gives new bite to euro zone crisis

By Mike Peacock
December 10, 2012

Don’t start putting out the tinsel yet. Just when we thought we had a smooth glide path into Christmas the euro zone has bitten back.