Greek debt threat won’t trigger Armageddon
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Athens is threatening not to pay holdouts in its debt swap, dispelling any pretence that the restructuring will be “voluntary”. The sabre-rattling is spooking markets, but an outbreak of minor chaos should help bring stragglers on board. A disorderly default still looks remote.
Apax finds French twist on bankruptcy tourism
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Restructuring specialists have a lot to thank the UK for. The country’s creditor-friendly legal framework has drawn companies from across Europe to restructure in London. European Union law states that companies should use the insolvency regime relevant to their centre of main interest, or “comi” for short. But the concept is elastic; a Greek mobile telecoms company, Wind Hellas, was able to restructure in London by relocating one of its companies from Luxembourg to the UK.
Weidmann’s ECB agitation more dangerous than Weber
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Is the Bundesbank worried about the potential break-up of the euro zone? That’s certainly how a leaked letter from Jens Weidmann, the Buba’s boss, to Mario Draghi, the European Central Bank President, reads. Weidmann is worried that collateral which the ECB is accepting from banks in return for its massive liquidity injections isn’t sufficiently good – and that strong national central banks, such as his, could be on the hook for losses.
Euro zone crisis over – for now
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The euro zone has gone from crisis to catharsis in three months. Markets used to panic over what would happen when Italian yields topped 7 percent. After breaching that level in November last year, Italian 10-year yields have fallen below 5 percent. Spanish yields, which never quite got to 7 percent, have also sunk below that symbolically round number.
Markets might yawn at second ECB cheap-money fix
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The ECB’s second three-year liquidity facility should attract enough takers to avoid a spookily-low outcome. But those expecting a massive splurge will likely be disappointed. And the prospect of further long-dated funds looks remote, for now.
ECB Greek loss dodge heralds end of bond buying
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
The European Central Bank will avoid losses on Greek bonds through a legal manoeuvre. Such special treatment will not please the private bondholders who are being asked to take losses on their Greek debt. It might also bring the ECB’s bond-buying programme to an end.
High yield U.S. tourists sail into European storm
By Neil Unmack and Agnes Crane
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
The European Central Bank’s cheap money and the siren call of high yields are luring global investors into the European junk bond market. High-yield bond issuance is up nearly 70 percent so far this year over the same period of 2011, according to Thomson Reuters data. It may seem odd given the uncertain future for the euro zone, but the ECB’s move to flood the banking system with three-year loans has given investors confidence that a financial meltdown can be averted. The Federal Reserve’s commitment to near-free funds is encouraging U.S. investors to look to European debt for juicer returns. Some 63 percent of high yield bonds sold by European companies in January were issued in dollars, according to Morgan Stanley.
ECB’s graceful surrender may lend Greece more time
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Another piece in the puzzle that is the Greek second bailout may be slotting into place. The European Central Bank has reportedly agreed not to demand repayment on its Greek bonds at face value. That makes sense.
Italy’s revival brings little joy to fund managers
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Europe’s bond investors may have already missed the best trade of 2012. While many fund managers were steering clear, Italian government debt rallied in January, outperforming other euro zone sovereigns. But those who missed the boat may find better value elsewhere.
Europe can’t force Greece into never-default land
By Neil Unmack
The author is a Reuters Breakingviews columnist. The opinions expressed are his own
A German proposal to tie Greece’s future with a pledge to never default looks barmy. The euro zone already has a hard enough time getting Greece to reform its economy, partly because Greece can wield the threat of a messy default. When Athens reaches a primary budget surplus, as it should this year, it will be in an even stronger negotiating position because it could then default on bailout loans and still pay for the government’s expenses.
Germany has come up with the idea of forcing Greece to prioritise international debt repayment over domestic bills. The euro zone would then be assured it would get its money back. This in turn would make it more credible in pressuring Greece into speedier reforms, since the Greeks themselves would feel the pain of non-compliance.
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