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Jul 13, 2012
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Valentino makes Permira look not shabby nor chic

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By Neil Unmack

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

It had all the hallmarks of a boom-time finance disaster. Permira’s leveraged 5.4 billion euro acquisition of a controlling stake in Hugo Boss through Valentino Fashion Group was one of the biggest deals of 2007, the year that the sub-prime crisis kicked off in earnest and Terra Firma bought EMI Group. Five years on, the UK buyout firm is selling Valentino to the Qatar royal family for a punchy price. That leaves Permira’s fashion binge looking respectable, if not glamorous.

Jul 11, 2012
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Euro zone’s bailout funds face biggest test yet

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By Neil Unmack

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

Last November, the euro zone crisis forced the European Financial Stability Facility to delay a bond deal. Now the crisis is back, but the bailout fund is holding up. It has just issued its largest public bond, paying just 1.652 percent for five-year money. That has eased concerns after a previous bond issue was not fully subscribed. However, bigger challenges lie ahead.

Jul 11, 2012

Spain rightly forced to consider bank bail-in

(The authors are Reuters Breakingviews columnists. The opinions
expressed are their own)

By Fiona Maharg Bravo and Neil Unmack

MADRID/LONDON, July 11 (Reuters Breakingviews) – Spain’s
economy minister Luis de Guindos recently said bank preference
shares should never have been sold to mainstream retail
investors. It’s easy to see why. Euro zone lenders may be about
to force Spain to follow Ireland and impose losses on junior
creditors of bailed-out banks, many of whom are retail clients.
This would be deeply unpopular and carry risks. But it is the
right way to reduce the cost of Spain’s mega bank bailout.

Jun 27, 2012
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Cyprus is the last of Europe’s baby bailouts

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By Neil Unmack

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

Hit by a perfect storm of economic slump and man-made disasters, Cyprus has been forced to seek euro zone help. Though implementing reform could be controversial, the 10 billion euro rescue is peanuts for the zone’s bailout funds. Europe will need a different strategy to cope with Spain and Italy.

Jun 21, 2012
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Euro fund bond binge may help creditors, not Italy

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By Neil Unmack

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

Italy and France are proposing to use the euro bailout funds to buy sovereign debt in the market, in a bid to restore confidence. More likely, it would be used by creditors to dump their holdings.

Jun 15, 2012
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Guide for the perplexed: What is a euro bond?

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By Neil Unmack

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

Euro bond proposals are proliferating. Euro zone politicians will chew over the multiple variations on the theme of debt mutualisation at this month’s summit. Here’s our guide to everything you always wanted to know about Eurobills, redemptions bonds, red/blue bonds, deficit bonds etc but never dared ask.
 
 Eurobills

Jun 12, 2012
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Spain still stuck in downward spiral

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By Neil Unmack

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

Euro zone countries that receive bailouts are generally locked out of capital markets for years. Spain is hoping to break the cycle; while it may ask for up to 100 billion euros to prop up its banks, it wants to avoid a full rescue. But the deal has failed to pull Spain out of its downward spiral.

Jun 7, 2012
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Germany could live with Eurobills

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By Neil Unmack

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

Full mutualisation of euro zone government debt looks like a pipe dream for now. But pooling together short-term debt could help weak countries, without incurring the risk of moral hazard and potential losses of full-blown euro bonds.

May 31, 2012
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Super Mario Bros need a relaunch

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By Neil Unmack and Hugo Dixon

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

The Super Mario Brothers need a relaunch. At the end of last year, the near simultaneous appointments of Mario Monti to replace Silvio Berlusconi as Italy’s prime minister and Mario Draghi as president of the European Central Bank helped turn around the euro crisis, at least temporarily. But fear is back. Italy will be next in the firing line if the Spanish and Greek crises worsen.

May 24, 2012
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Italy’s new off balance sheet wheeze

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By Neil Unmack

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

Rome is in a bind. Arrears to local companies are choking the economy, but funding them upfront could push up the country’s debt and spook markets. So Italy is using banks to front some of the money in a way that avoids pushing up its debt at least for the time being.