Angela Merkel has declared that she and François Hollande will discuss how to strengthen the eurozone, when they meet on Saturday....Merkel also said that she and Hollande has a 'trusting' relationship, and would look for solutions that were "good for all of Europe." ....Meanwhile ...
Finland's prime minister, Jyrki Katainen, has questioned
whether the European Central Bank's new bond-buying scheme will really help.
Nearly two weeks after the ECB announced its Outright Monetary Transactions
programme, to much fanfare, Katainen downplayed its significance, telling
reporters that It has led to a positive situation, but I'm not fully sure if it
will help in the long run....The prospect of OMT has helped ease borrowing costs
for peripheral countries. However it can't kick in until a request for help is
made... Katainen also argued that countries who are suffering
from high yields must "sacrifice faster short-term growth" in favor of fixing
their economies, bolstering competitiveness, and restoring confidence.GREECE CONFIRMS PLANS TO SELL OFF BUILDINGS OVERSEAS....We have confirmation from Greece that the Greek government is planning to sell off some of its prime overseas properties. As flagged up at 8.55am, this could include the Greek consul's home in West London. The foreign ministry's spokesman Gregory Delavekouras has just confirmed that Greece will seek to sell a host of properties abroad but potential buyers should not hold their breath: the foreign ministry's finance office has to draw up a list of the assets first and investigate market conditions. The good news is that the foreign ministry actually knows what the properties are - unlike the Greek state which has little idea of what it owns in a country that has long lacked a land registry. "There is a decision to make use of properties that for various reasons are not being used," he told me. "But no decision has been made about specifics and I can't tell you which buildings would be available." Since the outbreak of debt-burdened Greece's great economic crisis, diplomatic staff have been scaled back - the general consulate in London, home of a thriving Greek community, was one such victim -- as the government has tried to reign in expenditure.
10 comments:
Might help if you knew the difference between secondary yields, which are pure indicational and primary market costs which will lead to bailouts if high!
The price on the secondary market is extremely important in setting the primary price. If you know you can offload on the secondary market to a buyer with bottomless pockets the risk profile of the bond drops and therefore the price will rise as it is a more desirable product.
ATL
One thing is certain, if today’s bond sale gets away alright, then we could face a long wait until Spanish PM Rajoy feels compelled to seek help for Spain’s ailing economy.
The logic on this is thus: "If the yields are good and the sale well subscribed, it will take longer for Spain to take action to allow the ECB to act and bring down yields, and for the ESM to fill undersubscription".... ermmmm...
by Helianthia of Purgatorium [... and who knows for how long still here …]
I hope you do get out of "purgatorium". I'll add a few others, without classical philosophers attached (though they probably said it too).
-Wit can defuse a situation. Self-deprecatory wit can sometimes defuse it even more, but can be misunderstood or explotied.
-It really isn't necessary to have the last word. If you argument is good, then just let it stand unchanged.
Fight Looms Over Greece Bailout Plan
Either the International Monetary Fund, the European Central Bank, or euro-zone governments such as Germany will have to make painful concessions to ease Greece's debt-service burden, in order to avoid a Greek bankruptcy.
Spain Clears Hurdle
Spain's ailing finances got a boost from the sale of long-dated debt, much of it to foreign buyers.
ROME—Italy has been pulled back from the precipice of default, but reviving the country's stagnant economy is still proving an uphill battle—in large part because of a woefully lagging services sector.
In an interview, the head of Italy's statistics agency said that—contrary to foreign perceptions—Italy's industrial sector has held up well despite four quarters of recession here. Many manufacturers' exports have returned to precrisis levels. Figures released Thursday show industrial orders, a proxy for future production, ticking up, including from Italian companies.
The real problem is that companies in the transport, communications, tourism, retail and social services—all sectors where Italy lags peers in other countries—are dragging down the rest of the economy, said Istat Chairman Enrico Giovannini.
"The manufacturing sector is not a disaster; quite the contrary," said Mr. Giovannini. "But it is only one-sixth of the economy. The services sector is the country's big problem."
Mr. Giovannini was speaking hours before the government, as widely expected, downgraded its growth forecasts for this year and next, reflecting austerity measures introduced to keep a commitment to balance the country's budget by 2013 that have weighed on the pocketbooks of Italian individuals and businesses.
The government said it expected gross domestic product to fall this year by 2.4%—twice as big a decline as it had predicted in April—and fall by 0.2% in 2013, partly because of a darkening of the global economy. Many economists see next year's forecast as too optimistic; BNP Paribas this week forecast a 0.8% contraction for Italy next year.
Spain's 1978 constitution does not provide for the independence of Catalonia or any other region.
Polls show Catalans are furious that they contribute 8% more in tax revenues than their region receives back from central government. Support for independence has surged over the past year as Mas's regional government cuts health and education services in response to central government demands to cut its budget deficit.
A decision by the country's constitutional court to strike out parts of a new autonomy charter for the region in 2010 had also angered many Catalans, and signalled a limit to devolution without constitutional reform.
Hundreds of thousands of demonstrators took to the streets of Barcelona on September 11 to demand independence, the biggest-ever show of support for a separate Catalan state.
Catalonia has one of the highest deficits amongst Spain's 17 autonomous regional governments, but locals largely blame spending cuts on Rajoy's government
The Financial Times Deutschland reports today that the EZ creditor nations are considering to write-off the first round of credits to Greece. This would mean a debt relief of 53 billion euros. This is almost 25% of GDP. And more public debt relief is likely to follow.
Political blabla to follow. But that they already float the idea now is good news
There won’t be any nation that voluntarily, with a preemptive move, even if rationally justified, would go to an international body and say -- ‘I give up my national sovereignty,’
I rule it out for Italy and for any other country.
Both Spain and Italy's borrowing costs have fallen sharply in recent weeks, after the European Central Bank made its pledge to buy unlimited quantities of their short-term debt.
By Polilo's logic, Spain will sit tight and hope it can ride out the crisis.
Updated at 08:58 BST
08:42 BST
On Spain's possible bailout, the Financial Times reports that Madrid has been negotiating with the European Commission over the details of a new economic reform plan, due for release next Thursday.
The idea, it seems, is to get Brussels onside before the programme is announced to the Spanish people (national sovereignty still has its limits
minister rules out voluntary bailout request
Neither Spain nor Italy will seek financial help until the financial markets forces it on them.
So argued one of Mario Monti's ministers last night. Gianfranco Polillo, undersecretary of finance, told Bloomberg that neither country could accept asking for aid unless they were frozen out of the bond markets.
Activity in the euro zone shows no such sign of bottoming. GDP fell 0.7%, at an annualized rate, in the second quarter and hasn't expanded since the third quarter of last year. PMI figures over the summer suggest the contraction deepened this quarter to as much as 2% annualized, economists said.
The survey highlights a risk for the euro zone. The ECB's plan to purchase unlimited quantities of government bonds of struggling countries has brought some calm to financial markets. But crisis-hit countries such as Spain are also struggling with long recessions and deep-rooted economic problems, putting rising pressure on their state finances.
There is "little here to alter the view that the euro-zone recession looks set to deepen in the latter part of the year," said Ben May, economist at Capital Economics.
In a separate report, the European Commission said consumer confidence fell to a 40-month low in September.
Thursday's PMI report also suggests the gap between the currency bloc's two largest economies is widening. German business activity largely stabilized in September, suggesting any downturn in Europe's biggest economy will be brief. Germany's economy has expanded by 3% or more in each of the past two years, and is expected to grow about 1% this year.
French business activity, in contrast, plunged, with its PMI dropping nearly four points to 44.1, one of the steepest monthly falls on record. The two countries account for about half of the euro zone's GDP and are the main financial backers of the region's fiscal rescue funds.
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