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Jan 16, 2012
via Breakingviews

Euro zone’s New Year hopes hit triple downer

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By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own

European governments have suffered a triple setback. Standard & Poor’s has stripped France and Austria of their triple-A ratings, and cut Italy to the same level as Ireland. Greek debt talks have broken down, while the European Central Bank has criticised the region’s fiscal pact. After a brief lull, the euro zone’s sovereign debt crisis is back with a vengeance.

Jan 11, 2012
via Breakingviews

ECB will find it hard to avoid pain on Greek debt

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The European Central Bank’s refusal to participate in the big Greek debt swap and take losses on its holdings is looking stranger by the day. It looks increasingly like it might confer the ECB an informal preferred creditor status that would have the unintended consequence of undermining its own bond-buying programme.

Dec 6, 2011
via Breakingviews

ECB bazooka may be short on credibility ammo

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The European Central Bank may be readying its bazooka. Euro zone bond markets are rallying amid hopes that an agreement by European governments on fiscal reform may clear the way for the central bank to start massive bond purchases. But bazookas can backfire.

Ideally, an intervention would create a virtuous circle whereby investors were once again willing to hold peripheral debt. That might allow the ECB to calm markets without actually buying that much.

Nov 28, 2011
via Breakingviews

Germany needn’t fear common euro zone bonds

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Fears that Germany will have to underwrite the debt of other euro zone countries have pushed up the country’s bond yields in recent weeks. Common bonds would end the country’s days of super-cheap borrowing. But if it was part of a genuine fiscal union, funding costs need not go sky high.

Nov 21, 2011
via Breakingviews

IMF could unlock ECB’s war chest

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The battle for the euro zone’s survival hinges on finding a way to unlock the European Central Bank’s firepower. Even if countries such as Italy and Spain implement necessary reforms, they may not be able to borrow at reasonable rates. The ECB can prop up markets by buying bonds in the secondary market, but is forbidden by European Union treaties and its own statutes from financing countries directly. One idea doing the rounds is to use the International Monetary Fund to circumvent the rules.

Oct 20, 2011
via Breakingviews

Postponing Greek pain will be costly for taxpayers

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Greece needs a proper debt restructuring. Getting the country’s borrowing under control requires a serious haircut for both private creditors and euro zone governments. If it happened today, private bondholders could bear most of the losses, according to Breakingviews’ latest calculator. But if the euro zone delays, taxpayers will suffer more.

Oct 13, 2011
via Breakingviews

Europe tempted to save Greek trauma for later

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Euro zone leaders may be trying to tweak the Greek debt swap to impose marginally deeper losses on private creditors than agreed in July. That wouldn’t help Greece much, but it would stagger the pain for banks, and Greece’s public creditors.

Sep 21, 2011

ECB must give bank sickness long-term cure

By Neil Unmack

LONDON, Sept 20 (Reuters Breakingviews) – The European
Central Bank is flooding Europe with short-dated funds to ease
money market tensions. But banks are still struggling to issue
long-term debt, increasing the risks of a dangerous credit
crunch. The ECB should ease the strain by setting up a
longer-term facility.

Full view will be published shortly.

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Sep 21, 2011

Breakingviews-ECB must give bank sickness long-term cure

By Neil Unmack

LONDON, Sept 20 (Reuters Breakingviews) – The European
Central Bank is flooding Europe with short-dated funds to ease
money market tensions. But banks are still struggling to issue
long-term debt, increasing the risks of a dangerous credit
crunch. The ECB should ease the strain by setting up a
longer-term facility.

Full view will be published shortly.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

Get Breakingviews alerts directly to your inbox three times
a day. To sign up click here:
www.breakingviews.com/TOPNewsSubscription

Jul 13, 2011
via Breakingviews

Italy can save itself to save euro zone

By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

LONDON — The growing Italian crisis leaves the euro zone out of options. The country is both too big to fail and too big to bail. But Italy can deal with its own crisis.