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The news that Germany is drawing up plans for another support package for Greece, suggests that policymakers are gradually resolving some of the problems surrounding Greece’s current bail-out deal. But any new package is likely to leave Greece with an …
3rd February 2014
We doubt that the recent financial market sell-off in parts of the emerging world will be a catalyst for a renewed intensification of the euro-zone crisis. But the events underline the potential external threats to the euro-zone’s fragile recovery as …
The latest euro-zone unemployment and inflation data maintained the pressure on the ECB to do more to ward off deflation risks, perhaps as soon as next week. … Euro-zone Flash CPI (Jan.) & Unemployment …
31st January 2014
With the strong euro maintaining the risk of deflation in the euro-zone and inter-bank interest rates edging higher, the ECB’s Governing Council will need to follow up President Mario Draghi’s dovish words with further policy action very soon. Another …
30th January 2014
Although the risk of a “Grexit” has diminished substantially, we think that the dire financial position of Greek households has the potential to trigger a renewed intensification of the country’s crisis. … Dire household finances pose two risks for …
The rise in the European Commission’s Economic Sentiment Indicator (ESI) in January echoed the message of other closely watched euro-zone survey indicators that the economic recovery is building momentum, but slowly. … Euro-zone EC Survey & ECB Bank …
Today’s Q4 GDP figures indicate that the weak Belgian recovery is gradually taking hold, but we expect growth to remain unspectacular for a while yet. … Belgian GDP …
29th January 2014
Euro-zone bank lending remained very weak in December, suggesting that the banking sector is still a significant drag on the region’s recovery. … Euro-zone Monetary Indicators Monitor …
The latest fiscal data suggest that, last year, the smaller peripheral economies made significantly better fiscal progress than Italy or Spain. … Euro-zone Fiscal Monitor …
Hints from Mario Draghi that the European Central Bank (ECB) may consider purchasing bank loans do not reduce the growing risks of deflation in the euro-zone. … ECB loan buying plan won't dampen deflation …
28th January 2014
January’s Ifo survey supported the message from other recent evidence that the German economy has started the new year with a reasonable amount of momentum. … German Ifo Survey …
27th January 2014
Data released over the last week point to a brightening outlook for euro-zone households, not least because the region’s housing market downturn may be easing. But given the state of households’ finances and employment prospects, any rebound in house …
The Spanish economy may have ended 2013 on a relatively high note. But we would be wary of concluding that all the pieces are now in place for a solid and sustained economic recovery this year. … Is Spain set for a household spending-led …
23rd January 2014
January’s euro-zone flash PMIs suggested that the region’s weak recovery is gathering pace. But pressure will remain on the ECB to ease policy further in the coming months. … Euro-zone Flash PMIs …
January’s ZEW survey confirmed that German investors have started the new year in a reasonably optimistic mood. … German ZEW Survey …
21st January 2014
Not only did November's industrial production figures indicate that euro-zone GDP may have risen more strongly in Q4 than in Q3, but they also suggested that the euro's strength is not overwhelming the export orientated sector. In the near term, we …
20th January 2014
Although financial conditions in the Netherlands are set to improve in 2014, the country’s banking system will weigh on the recovery for a while yet. … Dutch banks still a weight on the …
16th January 2014
The new “responsibility pact” is a step forward for the French economy. Taken together with other planned measures, France is now slowly tackling some of its structural problems. … France gets to grips with its structural problems, …
15th January 2014
The European economy looks set for another year of weak growth in 2014, with the euro-zone likely to do little more than stagnate. Against that background, the European Central Bank (ECB) is likely to take further policy action, perhaps including the …
The latest euro-zone trade data confirm that the external sector continues to struggle against the strong euro. This will add to pressure on the ECB to take further policy action in the coming months. … Euro-zone Trade …
While November’s euro-zone industrial production figures provided hope that the economy regained a bit of momentum towards the end of last year, they don’t negate the need for more policy action from the ECB. … Euro-zone Industrial Production …
14th January 2014
The Norwegian economy will slow more than the consensus expects over the coming years as its two major tailwinds in recent years – booms in the housing and energy sectors – fade out. … Norway set for several years of below-trend …
13th January 2014
Last week’s assertions from Mario Draghi that the ECB stands ready to use all instruments allowed by the EU Treaty looked like a hint that it is finally considering engaging in quantitative easing. But experience elsewhere suggests that it would not solve …
President Draghi’s repeated assertions at today’s press conference that the ECB stands ready to use all instruments allowed by its Treaty suggested that more policy action is on the way. While another small cut in interest rates now looks likely, asset …
9th January 2014
December's European Commission (EC) monthly business and consumer survey suggested that the euro-zone economy may have gained a bit more momentum towards the end of last year. But the outlook is still one of sluggish growth at best. … Euro-zone EC …
Recent euro-zone inflation data have provided firmer signs that CPI inflation will remain well below the ECB’s 2% stability ceiling for longer than the Bank itself expects. Admittedly, headline CPI inflation, which fell to 0.8% in December, is still above …
8th January 2014
November’s euro-zone unemployment and retail sales data provided fresh evidence that the outlook for consumers is improving, but only slowly. … Euro-zone Unemployment (Nov.) & Retail Sales …
December's fall in euro-zone CPI inflation will add to concerns that the region could suffer from a bout of deflation and increase the pressure on the ECB to take more action to support the economy. … Euro-zone Flash CPI (Dec.), PPI (Nov.) & Ger. Unemp. …
7th January 2014
December’s drop in Spanish unemployment will bolster hopes that the labour market has reached a turning point and the economic recovery may spread to the household sector. But while we have revised up our growth forecasts for this year, we still expect …
6th January 2014
Although our forecast for euro-zone GDP growth in 2014 of 0.5% is now only a little more downbeat than the consensus estimate, there remain plenty of risks that could yet derail the region's recovery, not least problems in the banking sector and in …
The fall in euro-zone bank lending accelerated in November, suggesting that the banking sector will remain a significant drag on the region’s recovery. … Euro-zone Monetary Indicators Monitor (Nov …
3rd January 2014
The ECB’s Governing Council appears unlikely to make any substantive policy changes at its first policy meeting of the year on 9th January. But the ongoing combination of weak economic growth, a damagingly strong currency and poor liquidity conditions …
2nd January 2014
The latest headline fiscal figures show that Italy and Spain, the periphery's two largest economies, may have struggled to make inroads into their budget deficits in 2013. … Euro-zone Fiscal Monitor (Dec …
Our fears that the euro-zone crisis would re-escalate in 2013 proved to be unfounded, thanks in part to the continued calming influence of the ECB’s OMT backstop. But the region’s fundamental problems have still not been resolved. Against this background, …
23rd December 2013
Ireland’s Q3 GDP figures provided further hope that, having exited its bail-out programme, the economy is robust enough to stand on its own two feet. … Ireland GDP …
19th December 2013
Recent economic data may overstate the threat that the French economy will enter a triple-dip recession in Q4. But they do underline that the country’s recovery in 2014 will be very weak. … Will France fall into a triple-dip …
18th December 2013
December’s Ifo survey was consistent with other evidence pointing to steady but unspectacular growth in the German economy. … German Ifo Survey …
Iceland’s controversial plan for more debt relief for indebted households is, despite some risks, a positive for the economy. But the scope for similar measures in the euro-zone’s periphery is limited. … Iceland's debt write-down plan will support the …
17th December 2013
Although the euro-zone has tentatively emerged from its long and damaging recession, we remain sceptical that it will expand at a fast enough pace to reduce unemployment significantly, lower the periphery’s huge debt burdens and bring the euro-zone crisis …
December’s German ZEW survey suggested that financial market participants have ended the year in a reasonably upbeat mood towards the economic outlook. … German ZEW Survey …
The Swedish Riksbank's decision to reduce interest rates is unlikely to have a major positive impact on the economy. We expect GDP to continue to grow at a lacklustre pace, suggesting that the Riksbank may push back the expected start date of its …
The Swedish Riksbank’s decision to reduce interest rates is unlikely to have a major positive impact on the economy. We expect GDP to continue to grow at a lacklustre pace, suggesting that the Riksbank may push back the expected start date of its …
Iceland’s controversial plan for more debt relief for indebted households is, despite some risks, a positive for the economy. But the scope for similar measures in the euro-zone’s periphery is limited. … Iceland’s debt write-down plan will support the …
The latest euro-zone trade data highlight that the external sector remains too weak to singlehandedly power an economic recovery. … Euro-zone Trade …
16th December 2013
December’s small rise in the euro-zone composite PMI came as a bit of a relief after the previous two monthly falls. But the index still suggests that GDP growth in the region is likely to have been weak in Q4. … Euro-zone Flash PMIs …
Last week, euro-zone policy-makers moved closer to an agreement on the Single Resolution Mechanism responsible for handling failed banks. But while this is certainly a positive step, it will leave the region with an under-capitalised and fragmented …
Q3’s employment data add to evidence that the euro-zone’s labour market is finally stabilising. But a burst of strong job growth is probably a distant prospect. … Euro-zone Employment …
13th December 2013
The situation in Greece has improved dramatically over the past year. But while the second bail-out has ensured that the public finances are in a better position than they were, Greece’s public debt still appears unsustainably high. This suggests that the …
12th December 2013
Slovenia’s new bank recapitalisation plans will help the country avoid a bail-out. But its stress test results might have worrying implications for the euro-zone’s own upcoming evaluation of banks. … Slovenian stress tests boost efforts to avoid …
