Filtered by Region: Europe Use setting Europe
Despite much confusion on this point, there does not appear to be any insurmountable legal barrier to a country leaving the euro and remaining within the European Union (EU), even without the prior agreement of other member states. Nor is it absolutely …
22nd May 2012
GDP data for Q1 this year showed Norway’s economy expanding at a very healthy pace. But on balance, we think the adverse effects of the euro-zone debt crisis will prompt Norges Bank to cut its key policy rate further this year. … Norwegian GDP …
Calls for jointly issued “euro-bonds” are growing louder again. But they are unlikely to be implemented quickly or effectively enough to prevent some form of euro-zone fragmentation. … Euro-bonds can't keep the euro-zone …
In a worst case scenario, over the next five years, some €36bn worth of European property assets could be liquidated by German open-ended property funds (GOEFs). Our downbeat views on the European economic outlook suggest that investment demand will be …
21st May 2012
Markets have come around to our long-held view that some form of euro-zone break-up is likely, but opinion remains divided on the likely economic and financial fall-out. While even a limited and well managed break-up will have some nasty short-term …
Developments last week shed more light on the course of events which could culminate in the exit of Greece from the euro-zone. The failure of the political parties to form a coalition or even appoint another technocratic government has increased the risk …
The direct exposure of Latin American banks to the deepening crisis in Spain is not as great as it seems at first sight. Even so, there are at least three ways in which the region’s banks could be hit by financial contagion from the euro-zone’s debt …
18th May 2012
Our view that the euro-zone needs to break up has become more widely accepted, but many commentators still argue that, in practical terms, it simply can’t happen. In this Focus, we outline the mechanics of how a country could leave the euro. While the …
17th May 2012
The recent rapid decline in Greek bank deposits underlines our warnings that it could be pressures on the banking system which provide the primary trigger for some form of euro-zone break-up. … Will falling bank deposits force Greece …
One often advanced reason why Greece and other countries simply could not leave the euro-zone is the potential damage to the institution at the core of the currency union, the European Central Bank. But this might not be as big an obstacle as it looks. …
Domestically, Portugal’s economy suffers from a broader range of factors dragging on medium-term growth prospects than its peripheral European peers. And externally, an imminent euro-zone exit by Greece threatens to push Portuguese bond yields still …
16th May 2012
The euro-zone economy narrowly avoided falling back into a technical recession in Q1. But GDP merely stagnated and survey evidence point to renewed falls to come. In any event, the economic slowdown seen over the past year now seems to be negatively …
A victory for Greece’s anti-bail-out parties in the June election would not necessarily mark the end of the bail-out deal. But any agreement which is reached between the Government and the troika is unlikely to last and we still think it is only a matter …
The crisis in the euro-zone has exacted a heavy toll on regional stock markets. The sharp falls in equity prices have driven valuations down to attractive levels in many Member States, both relative to countries outside the single currency area and from a …
Recent developments in the euro-zone have supported our view that a limited form of break-up will commence this year with the exit of Greece. But there are clear risks of a bigger break-up. … Why and how will the euro-zone break …
15th May 2012
With a few notable exceptions, Emerging Europe’s direct exposure to Greece is small. But the contagion from a disorderly Greek exit from the euro-zone would have disastrous consequences for the region. … Greek exit risks …
Our central forecasts for industrial commodity prices already reflect some of the potential fall-out from a Greek euro exit. In particular, the economic and financial uncertainty is one of several factors behind our low end-2012 forecasts for copper …
The direct economic and financial effects of a Greek exit from the euro-zone need not be catastrophic. The key question remains whether the policymakers can prevent contagion effects from prompting a bigger and much more damaging break-up of the currency …
The provisional Q1 euro-zone GDP figures revealed that the economy has narrowly avoided a technical recession – temporarily. But the region remains worryingly reliant on growth in Germany and a renewed contraction seems almost inevitable this year. … …
Slovenia’s debt problems are not as severe as those of other Southern European economies, but its public debt is nonetheless on an unsustainable footing. Moreover, given the backdrop of private sector deleveraging at home and recession in key export …
14th May 2012
Suggestions that higher German inflation will allow the euro-zone’s peripheral economies to regain lost competitiveness look hopelessly optimistic. Those countries still face deep and prolonged wage and price adjustments if they are to improve their …
March’s euro-zone industrial production data confirm the weak underlying health of the sector and support the view that the outlook for the wider economy remains pretty bleak. … Euro-zone Industrial Production …
Political deadlock in Greece has reignited fears it could be on cusp of a euro-zone exit. The most likely outcome of another election is a victory for the pro-bail-out New Democracy and PASOK parties. But neither are natural bedfellows and with voters’ …
Last week’s Q1 2012 RICS Global Survey revealed a divergence in surveyors’ expectations for commercial property rental growth in Emerging Europe. We agree that the outlook is brightest in Russia and worst in Hungary and Romania. But the message from the …
10th May 2012
Euro-zone capital values suffered a fall in Q1. Although the decline was small, it was pretty widely based. As a result, it does nothing to alter our view that euro-zone commercial property markets face a double-dip this year and next. … Is the Q1 fall …
8th May 2012
The failure of the Greek election to produce a new government provides some support to our view that Greece could leave the euro-zone as soon as the end of this year. … Greek election deadlock raises euro exit …
March’s sharp rise in German industrial production reduces the risk that the economy is already in recession. But the underlying picture is still one of a sharp slowdown in the sector which will leave GDP growth muted at best this year. … German …
Despite weaker survey data, the ECB is in no hurry to sanction further measures to boost euro-zone growth. It feels the existing accommodative policy stance is providing the region with the basic tools it needs for sustainable recovery. But national …
7th May 2012
Business surveys for April suggest the global economy began the second quarter at a steady but subdued growth rate of around 3%. They also suggest the divergence between moderate growth in the US and recession in the euro-zone is likely to persist. … …
4th May 2012
The ECB held its main refinancing rate at 1% today but perhaps more interestingly, appears to have favoured the path of ‘austerity’ in the euro-zone region. Developments on inflation were deemed to be in line with price stability over the medium term, …
3rd May 2012
Banks’ purchases of sovereign debt have helped to lower some euro-zone governments’ borrowing costs. But they cannot solve the broader debt crisis and may even deepen it by further increasing the inter-reliance of governments and their domestic banking …
2nd May 2012
Non-euro-zone European economies will not be immune to a fresh recession in the euro-zone. We expect all economies in the region to undergo a sharp slowdown in growth or worse. Barring perhaps Poland, Russia and Turkey, we do not think that occupier …
Over the past few months we have seen little reason to alter in either direction our euro-zone commercial property forecasts. With no resolution in sight to the region’s debt crisis, we think that all member states will slip back into recession in 2012 …
The growing calls for euro-zone policymakers to shift their emphasis from austerity to growth have been fuelled by the continued deterioration in the outlook for the economy. Key forward-looking activity indicators have now fully reversed the modest …
The latest data on the state of the euro-zone labour market and manufacturing sector underline the enormity of the challenge facing policymakers to respond the growing calls for growth across the region. … Euro-zone Unemp. & Final Man. PMI …
Peripheral euro-zone economies continue to struggle to make further inroads into their budget deficits. Although this partly reflects temporary factors, the deteriorating growth outlook suggests that these economies may fail to meet their fiscal goals for …
1st May 2012
A fragile banking sector is one factor threatening to put further upward pressure on Spanish government bond yields. And with the economy back in recession and labour market conditions continuing to deteriorate, the chances that Spain will require an …
François Hollande’s promises of a pro-growth strategy and a stronger leadership role in Europe have raised hopes about France’s economic outlook. But his bold words have so far been backed by few firm plans and we think that a Hollande victory would carry …
Greece’s general election should result in the formation of a new Government that is, on paper at least, committed to the terms of the recently agreed second bail-out deal. But with the economy still in freefall and public debt unsustainably high, the …
30th April 2012
The latest monetary data revealed a further pick-up in broad money supply growth following generous ECB lending. But while banks seem to be using some of the money to buy government bonds, they are still reducing their lending to the private sector. … …
April’s euro-zone CPI inflation data confirmed that inflation remains stubbornly high. Over the coming months, we expect inflation to fall, but only gradually, ensuring that the squeeze on households’ real incomes continues. … Euro-zone Flash CPI (Apr.) …
The euro-zone economy is heading back into recession. And if we are right that the euro-zone is not sustainable in its current form, the downturn will extend into 2013 and eventually encompass all member states. Contracting output in the euro-zone will …
Last week saw what appeared to be an encouraging outbreak of unity amongst euro-zone policymakers on the need to supplement fiscal austerity with bigger efforts to boost economic growth. But talk is cheap and it is far from clear that effective action to …
The results of the KOF survey released this morning did little to change our view that office rents will decline this year. Subdued economic growth is likely to trigger fresh weakness in the labour market with the result that office rental values fall by …
27th April 2012
We think tougher times lie ahead for risky assets. Enthusiasm for equities is likely to be curbed by a turn in the US profit cycle, an absence of additional unconventional monetary stimulus from the Fed and a renewed flare-up of the crisis in the …
26th April 2012
At its forthcoming policy meeting, the ECB will resist pressure for it to take bolder action to solve the euro-zone’s problems. Despite acknowledging that the economic outlook has deteriorated, President Mario Draghi seems set to argue that the ECB has …
April’s EC business and consumer survey confirmed the downbeat picture painted by other recent indicators and dashed any lingering hopes that the euro-zone economy may escape a double-dip recession. … Euro-zone EC Survey …
We expect world GDP to grow by around 3% both this year and next. The US economy is set to recover steadily but the euro-zone recession will deepen, causing the sovereign debt crisis to flare up again and the euro-zone itself to begin breaking apart. …
24th April 2012
The backlash against austerity in the euro-zone could improve the region’s growth outlook. But it brings new dangers too, not least by putting dissenting countries on a collision course with Germany. … Austerity backlash brings new …
The pace of decline within both euro-zone manufacturing and services quickened during the month. The composite euro-zone flash PMI supports our view that the region will experience recessionary conditions during the course of this year. … Euro-zone …
23rd April 2012
