Tag: eurozone

  • LOTS OF FROTH, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    A brand new development in the history of the ECB has occurred: leaks yesterday revealed the broad outlines of its new sovereign debt securities’ purchase programme. One cannot help thinking that it was necessary to prepare the ground in advance, with the ECB decisions falling well short of some of the mounting speculation.

    According to Mario Draghi, there will be no limit to the amount of bond purchases on the secondary market – but the scope of the announcement needs to be put into perspective. They will in fact be decided … Read the rest

  • LE SOIR, ‘The only solution is to pool all the debts’, September 4, 2012

    Translated from the French by Tim Gupwell.

    4 September 2012

    An interview with Dominique Berns which appeared today in the economy pages of the daily newspaper, LE SOIR.

    “To save the Euro, we must mutually pool the debts”

    Q : The president of the ECB, Mario Draghi, has pledged to do “everything within his power to save the Euro”. Numerous observers expect the ECB to start buying up sovereign securities once again, only this time in a far more pro-active manner, in order to reduce the interest rates for the countries in difficulty, in particular for Spain and Italy. … Read the rest

  • UNDERSTANDING THESE TIMES IN WHICH WE LIVE

    Translated from the French by Tim Gupwell.

    In the Wall Street Journal today:

    Since the beginning of the crisis in 2007, one thing has become clear in European politics: the outgoing parties are not voted back in. Confronted by the incapacity of the governments and the majorities in place to resolve the problems of the moment, the electors – at least, those increasingly few and far between who still go to the trouble of travelling to the urns – vote for the opposition, whoever it may be.

    In these conditions, the merry go-round can only make a restricted number of … Read the rest

  • BEHIND THE SCENES, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    There are some sinister goings-on behind the scenes of the European financial system, which are hardly being proclaimed from the rooftops! Even Mario Draghi himself is preoccupied by it, drawing attention to vague manifestations of “fragmentation” which are developing at the heart of the Eurozone. What was he alluding to?

    It is occurring in three stages: an ongoing capital flight from countries on the verge of the abyss, leading to their banks becoming increasingly dependent on ECB loans, with the liquidities then supplied by the latter being used to buy state-issued … Read the rest

  • MARIO DRAGHI: WHAT IF IT WAS ALL A TERRIBLE MISUNDERSTANDING?

    Translated from the French by Tim Gupwel.

    A short while ago, I was taking a siesta, sleeping with a sound conscience, when I woke up with a start, my heart beating wildly, my forehead soaked with sweat and prey to a strong emotion: what if we had completely misunderstood the words of Mario Draghi, President of the European Central Bank, the day before yesterday? What if he had actually said something completely different to what we had heard him say?

    This is far from impossible: during the period from 1997 – 2006, I conscientiously read every single speech made … Read the rest

  • QUIET ON THE SET, AND… INACTION!, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    Events are moving fast. We were expecting it of Greece, but Spain is overtaking it. Yesterday evening, a human tidal wave invaded Spanish town streets, which these days have become virtually permanent places of mini-demonstrations at midday or after work. Today, at the very moment when the Eurogroup ministers were adopting the bail-out plan for the Spanish banks, the bond rate had edged up to 7.20% and the Madrid Stock Market plunged more than 5%. Instead of falling as had been predicted, the government has announced that the official unemployment rate … Read the rest

  • FIRST IT WAS THE AGENCIES, NOW ITS THE FORECASTERS’ FAULT, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    “I can’t see any time soon when…the pressure will be off” replied David Cameron, the British Prime-Minister, in an interview with The Daily Telegraph. He continued, “this is a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts”. In conclusion, his austerity policies are likely to continue beyond 2020, as the situation is “a lot tougher than the forecasters were expecting”. Georges Osborne, the Chancellor of … Read the rest

  • GUILTY PARTIES WANTED !, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    In accordance with the predictable script, the bond market is under pressure again. The cost of servicing Spanish and Italian debt has continued to increase as their financing plans move forward in little measured steps. The effect of all this is to place an additional burden on the budgets, undermining those measures which are intended to reduce the deficits.

    The statistical institutes INSEE (France), IFO (Germany) and ISTAT (Italy) all agree: Europe is sinking into a recession which they describe as ‘technical” in an attempt to make it sound innocuous, but … Read the rest

  • AFTER THE WORDS, THE MAGIC FORMULA…, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    What can you say when you are in total disagreement? You can always assert, with one voice, the need for a union! This is this perspective that the quartet composed of José Manuel Barroso, Mario Draghi, Jean-Claude Juncker and Herman Van Rompuy (in alphabetical order) continues to work on.

    A new magic word has been discovered and is going to be proclaimed with all its variations, to push for the implementation of four unions: banking, fiscal, economic and political. With the fiscal union already in the pipeline, the next stage which … Read the rest

  • Le Vif/L’Express, « There is ALWAYS an alternative », June 22, 2012

    This is an exclusive preview – in English! – of my column which will be published in the Belgian weekly Le Vif/L’Express this coming Thursday

    The phenomenon is the way in which things manifest themselves to us, and this can be real – either with things appearing as they really are; or it can be deceptive – with things appearing other than they really are – such is the case for optical illusions for example which suggest a false reality. Where the Greek language said phainomenon, latin said apparentia, appearance, with the same two nuances as for phenomenon … Read the rest

  • A BIG BANG, OR NOTHING , by François Leclerc

    Guest post. Translated from the French by Tim Gupwell

    With the G20 meeting being held in Mexico at the start of the week, our perspective will find itself altered, falsely accustomed as we are to only seeing the debt crisis from a European angle. On the 18th and 19th June, the greats of this world are going to gather in Los Cabos, a tourist resort in Southern Lower California, under the double auspices of debt and global recovery.

    To avoid standing idly by whilst confronted by a disaster of its own making, the British Government has just announced a plan … Read the rest

  • SPAIN IN STORMY WATERS

    Spain in stormy waters

    12 juin 2012 par Paul Jorion

    The 10 year rate for Spanish debt has just reached a historic high. On the 25th November of last year, the rate had beaten a record when it reached 6.72%. Yesterday early in the morning, when the European markets were in ecstasy about the news of an 100 billion euro aid package for the Spanish banks via the Spanish state, the rate had dropped back down to 6.02%. It has just reached 6.809% (at 16:27 Paris time).

    Of course the danger of this type of progression is that an … Read the rest

  • KEEP KICKING THE CAN DOWN THE ROAD…, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell.

    The case has been heard: Barack Obama and David Cameron demanded immediate action from the Euro zone leaders, frightened by the prospect of the Spanish and Greek crises occurring at the same time, and Angela Merkel responded by announcing that no miracles should be expected from the Summit at the end of June. She continues to insist on a gradual long-term evolution towards budgetary and political union (within the next 5 to 10 years according to Mario Draghi) and to dig her heels in with regard to any measures which would … Read the rest

  • A WAIT DESTINED TO LAST, by François Leclerc

    Guest post. Translated from the French by Tim Gupwell.

    The European Commission in Brussels is getting ready to unveil a project aiming to prevent and cure the banking crises, destined to enter into service in 2014, certain procedures being foreseen for 2018. There is a certain sense of timing, but certainly not a sense of urgency.

    The Spanish are now appealing for help, admitting that they have been cut off from the markets, ready to sell off whole swathes of their banking system to save it, calling for direct aid so as not to fall into the clutches of the … Read the rest