The Economist (July 6)
“Good economic news has begun to fall on Britain like drops of rain in the midst of a drought. The country is parched: revisions to GDP estimates released last week suggest that output is still 3.9% lower than its 2008 peak, a worse performance than any other G20 country except Italy. As confidence returns, it seems almost impolite to point out that the British economy still has a sickly core of weak investment, productivity and wages, and that hard policy decisions lie ahead.”
Tags: Confidence, Economy, G20, GDP, Investment, Italy, Output, Productivity, UK, Wages
Financial Times (February 17)
“Forty governments are signatories to the anti-bribery convention adopted in 1997 by the Paris-based OECD…. So it was reprehensible for Silvio Berlusconi, Italy’s former prime minister, to state last week that bribery in pursuit of international contracts was not an offence. It would be unfair on Italian companies to play by rules scorned by competitors, he declared.” Italy is a signatory to the OECD convention.
Tags: Anti-bribery, Competitors, Contracts, Italy, OECD, Prime minister, Signatories, Silvio Berlusconi
The Economist (October 24)
There’s no end in sight to Europe’s “carmaking crisis.” Sales have fallen for 5 straight years in the EU. In September, year-on-year sales were down 11% across the EU, 18% in France, 26% in Italy and 37% in Spain. “Britain was the only significant market to enjoy a small rise.” With production capacity of 17 million cars a year, and current demand around 13 million units, “the overcapacity is glaring.”
Tags: Automakers, Cars, Crisis, EU, France, Italy, Overcapacity, Spain, UK
Wall Street Journal (September 10)
“Mario Draghi laid out the European Central Bank’s latest bond-buying venture Thursday, and we suppose the good news is that it isn’t as sweeping as it might have been.” Still, it amounts to “another giant step into fiscal policy. This is far from the original vision of the euro, and the costs to the central bank’s political independence will be steep.” Furthermore, the benefits are marginal. “At best, the new program will give Messrs. Monti and Rajoy more time to promote the reforms in labor markets, taxation and other things their countries so desperately need to grow again.”
Tags: Bond-buying, ECB, euro, Fiscal policy, Italy, Mario Draghi, Monti, Rajoy, Spain
Financial Times (May 30)
“US benchmark borrowing costs plunged to levels last seen in 1946 and those for Germany and the UK hit all-time lows as investors took fright at what they see as a disjointed policy response to the debt crisis in Spain and Italy.” Ten year yields fell to 1.62% on U.S. Treasuries and to 1.64% on UK gilts, the lowest since the start of recordkeeping in 1703. Meanwhile, yields on two-year German bunds hit zero, another first.
Euromoney (May 21)
As the European currency crisis continues to unfold, the spotlight shifts. “Spain’s economic political future hangs in the balance, as fears over Greece’s exit from the eurozone leave the credibility of its financial stabilization plans in tatters without urgent redress from eurozone policymakers.” And if Spain falls to contagion, there’s no telling where the downward spiral will end, though Italy would probably be the next to fall.
Boston Herald (May 13)Boston Herald (May 13)
“The failure of any party to form a new government following Greek national elections means the end of the euro currency there is almost a certainty. Thus dies the illusion that a common European currency would cure all ills…. Greece faces a grim future.” For Italy, Spain, Portugal and the rest of Europe “nothing is certain.”
“The failure of any party to form a new government following Greek national elections means the end of the euro currency there is almost a certainty. Thus dies the illusion that a common European currency would cure all ills…. Greece faces a grim future.” For Italy, Spain, Portugal and the rest of Europe “nothing is certain.”
The Economist (May 12)
“Amid growing risk of a Greek exit, the euro zone has yet to face up to the task of saving the single currency itself…. The idea of a chaotic Greek departure from the euro at a time of Franco-German disunion should terrify everyone it touches…. Like some dreadful joke, the euro needs French reform, German extravagance and Italian political maturity.”
Financial Times (April 27)
The Spanish people were willing to suffer austerity when Prime Minister Mariano Rajoy “sent the people of Spain a message of hope for the future.” Now the hope is gone and “Mr Rajoy finds himself in an impossible situation. For all the talk of European solidarity, the EU has insisted that his deficit-reduction plan should proceed at an excessive pace. This was bound to trigger a popular backlash.” A similar backlash is rising up in Italy and the Netherlands. “Citizens may have been favourable to their initial message of austerity for a higher cause, but they will not tolerate being led into a dead-end.”
Tags: Austerity, Deficit reduction, EU, Italy, Netherlands, Rajoy, Spain
Wall Street Journal (March 28)Wall Street Journal (March 28)
“Squabbling over the difference between €500 billion and €740 billion looks a lot like deck-chair management.” How big should the European Stability Mechanism (ESM) be? Angela Merkel now supports expanding the bailout fund to €700 billion from €500 billion. The European Commission seeks even more. “Even if the ESM had the €940 billion that the Commission wants, the fund still won’t likely be big enough to save Spain and Italy if they end up asking for rescue. The financing needs of Madrid and Rome alone are likely to top €1.2 trillion over the next two years.” “Squabbling over the difference between €500 billion and €740 billion looks a lot like deck-chair management.” How big should the European Stability Mechanism (ESM) be? The current €500 billion appears insufficient. Angela Merkel now supports expanding the bailout fund to €700 billion from €500 billion. The European Commission seeks even more. “Even if the ESM had the €940 billion that the Commission wants, the fund still won’t likely be big enough to save Spain and Italy if they end up asking for rescue. The financing needs of Madrid and Rome alone are likely to top €1.2 trillion over the next two years.”
