Capitas News Brief
IMF support dependent on increase in the Eurozone’s own rescue fund
Troubles rumble on over the Greek crisis (still!). This time the pressure is from the IMF, where non-euro members have made it clear that they are unwilling to increase IMF funding without a more substantial increase in the Eurozone’s own rescue fund. Germany holds the key and will make a decision sometime during March. It’s likely that there will be some movement, but it will be reluctant given the disincentive this might give to other countries…
- Date: 27 Feb 2012
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Capitas News Brief
Second thoghts vis a vis Greece
Valentine’s Day failed to soften the hearts of some the northern Eurozone members, led by Germany. Last week they appeared to have second thoughts over making a 130 billion euro commitment to Greece. Indeed, the idea of letting Greece default messily was gaining momentum as the week wore on. The main reason is that with a Greek election due in April and the opposition leading the opinion polls, they fear that a different government will renege on…
- Date: 20 Feb 2012
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Capitas News Brief
Greeks politicians pass austerity package
The 2012 BAFTA best film, The Artist, was set around the time of the Great Depression. This may chime with a Greek population that fears it will suffer something similar as it strives to deal with its debt. But another BAFTA nominee, The Help, seems more relevant right now. Greek politicians passed the austerity package required to secure the help it needs to avoid default. And it’s not before time. Talks have been going on since July. There will…
- Date: 13 Feb 2012
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Capitas News Brief
Policymakers need to push forward with conviction
At the start of the Six Nations rugby tournament many would be hoping that the European policymakers would take a leaf out of the players’ books and just get on with it. Unlike good rugby, when passing the ball leads to success, too many of the European policymakers’ passes have led nowhere. Greece has to find €14bn by 20 March to avoid a default. Without help it won’t have the funds to do this, and this is casting a shadow over the Eurozone…
- Date: 6 Feb 2012
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Capitas News Brief
Annual World Economic Forum
It was never going to be a particularly jolly affair, but the mood at this year’s annual meeting of the World Economic Forum was much gloomier than previous years. The IMF announced a substantial reduction to its 2012 global economic forecast. No surprises about where it laid the blame - Europe. And the Brussels summit this week will address how to improve growth in the Eurozone. Confidence needs to be restored to achieve this, but for this to happen…
- Date: 30 Jan 2012
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Capitas News Brief
Private investors shy away from a haircut
Private investors in Greek government bonds shied away from an agreement to accept just half of the capital they lent in the first place and take a lower interest return on the remaining debt. The haircut alone was less of a trim than a short back and sides, but if Greece defaults these investors risk a scalping, in the form of losing all of their money. Whether Greece will qualify for the bailout it needs is now in question and has unsettled markets…
- Date: 23 Jan 2012
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Capitas News Brief
Rating downgrades turn the heat up
The loss of France’s cherished AAA rating was a particular blow to President Sarkozy in his election year. But there is more to worry about than a politician’s feelings. Eight other Eurozone members, including Austria, Italy, Spain and Portugal, were also downgraded. Standard & Poor’s (S&P) decision froze out hopes that sentiment towards the Eurozone was beginning to thaw after the successful bond issues in Spain and Italy during the week. The…
- Date: 16 Jan 2012
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Capitas News Brief
2012, a year of hope and fear
The optimism at the start of 2011 was founded on strong global economic growth, but developments throughout the year mean that we enter 2012 in a much gloomier mood. Inflation, rising unemployment and much weaker than expected growth outturns in 2011 mean that meeting the austerity challenge is going to be painful in 2012. But there is some good news. The US economy seems to be dragging itself out of the doldrums and global manufacturing surveys have…
- Date: 9 Jan 2012
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Capitas News Brief
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