European financial values on the rise

Participation of Michel Barnier, Member of the EC in charge of Internal Market and Services at the 'Financial Stability and the Single Market - The Keys to Growth in Europe' conference. (EC Audiovisual Services).

Participation of Michel Barnier, Member of the EC in charge of Internal Market and Services at the ‘Financial Stability and the Single Market – The Keys to Growth in Europe’ conference. (EC Audiovisual Services).

No doubt the screams, mainly coming from English language media, economists and commentators about the possible dissolution of Eurozone have now subsided and only some late comers in the league of those who have bet on Eurozone’s destruction still try to salvage their wrecks, by predicting catastrophe.

On the other side of the fence those who have bet on Europe’s ability to counter its credit and fiscal crisis have made lucrative gains, profiting even from Greek bonds.Overall the outlook for Eurozone is much more stable this year than at the beginning of 2012.

As the President of the European Central Bank Mario Draghi stated yesterday, in his monthly press conference which usually follows ECB’s governing council’s regular convention: “Later in 2013 economic activity should gradually recover. In particular, our accommodative monetary policy stance, together with significantly improved financial market confidence and reduced fragmentation, should work its way through to the economy, and global demand should strengthen”. Of course ECB still predicts that Eurozone’s economy will overall contract this year, counting however GDP changes as from 1 January till 31 December 2013.

There is good news now even from sources that have being shaking financial markets and the political structures for many months. For example the first Spanish bond issue of the year was greeted yesterday very positively by investors. The country’s exchequer raised €5.82 billion, €820 million more than the target, at very favourable interest rates by selling 2, 5 end 13 year bonds.

Ireland’s success

By the same token Ireland, holding for the first half of 2013 the rolling EU Council Presidency, is planning to get out from the Memorandum of Understanding agreed with the troika of EU, ECB and the IMF. At this point it must be reminded that Ireland as from January 2011 is under the “protection” of the troika, in order to avoid bankruptcy. Dublin however has managed to overcome the difficulties much more effectively than Greece and Portugal.

Now the Enda Kenny government is negotiating with the EU, ECB and the IMF an agreement to rid itself from at least from a part of the debts its commercial banks accumulated in the great crunch of 2008 – 2009 and the Republic forcefully agreed to honour. Yesterday Ireland launched a five-year bond and the government said it will resume its monthly debt issues, pondering that markets believe in its ability to abandon soon the bailout programme.

As for Greece the country is still striving to stand on its feet, after the troika released a new huge package of loans and aid amounting to €51.5 billion. Most of it however will be used to pay old debts and recapitalise its four major banks. Only a single digit amount will finance current expenses.

In Italy the appearance of Mario Monti in the main political arena of his country, has triggered a reshuffle of positions of the main political parties from left to right, vis-a-vis the austerity programme applied by Professor’s government over the past twelve months. The question is now if this programme will continue or become more severe after the February elections.

Financial markets

Summing up the broad economic prospects for Eurozone this year they appear at least better than in 2012. The problem is however that still in the South, mainly Greece and Spain are plagued by always growing unemployment, which in both countries menaces their social tissue. Yesterday the Greek Statistical Service announced that unemployment reached 26.8% in October, with 57.6% of young people under 25 without a job.

Greece and Spain however are not threatened by visible political risks that could derail their efforts to cut down fiscal deficits. Actually both have succeeded to close their 2012 government accounts having attained all targets. In the case of Greece the 2012 budget deficit was even less than the troika had predicted it will be.

Given all that European capital markets in both their facets, bonds and stocks, have had a very good start this year. The same is true for the euro parity with the dollar, which reached yesterday its highest level for months at 1.32. With the prospect of a further reduction of ECB’s interest rates appearing now more distant than in December, after some relevant comments by Mario Draghi yesterday, the euro will remain at those high levels with the US currency for the at least the coming weeks. European stock markets will predictably continue on the upwards path they have taken as from the beginning of 2013. All in all European values are now on the rise.

 

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

After COVID-19, we must rethink how we find and produce new drugs

Using the quarantine to your advantage

Journey of my life

What you need to know about the European Green Deal – and what comes next

What the Amazon rain forest tells us about globalization

Financing the 2030 Agenda: What is it and why is it important?

UNICEF warns of ‘lost generation’ of Rohingya youth, one year after Myanmar exodus

Is the ECB enforcing the will of the big Eurozone member states on the small? Can the euro area live with that?

European Development Days 2021: driving the global debate on green action ahead of Kunming and Glasgow Summits

New UN-Syrian Action Plan signals an ‘important day’ for child protection, says UN envoy

Stop cooperation with and funding to the Libyan coastguard, MEPs ask

This is how climate science went mainstream

Air pollution: How to end the deaths of 7 million people per year?

As coronavirus spreads to poorer countries, here’s how the world can help

EU Commission spends billions without achieving targets

For resilient, sustainable city mobility after COVID-19, these trends must continue

Coronavirus: Commission proposes update to coordinated approach on free movement restrictions

‘Deteriorating’ human rights in Belarus amounts to ‘wholescale oppression’: UN expert

UN chief hails Libyan leaders’ agreement to hold general election

Women in leadership: shattering the glass ceiling

Coronavirus: Commission adopts package of measures to further support the agri-food sector

Is continuous sanctioning the way to resolve the Ukrainian crisis?

DR Congo: ‘No time to lose’ says newly appointed UN Ebola response coordinator

This crisis cannot be confronted with statistics

A sterilised EMU may lead to a break up of Eurozone

Tackle ‘unacceptable inequalities’ in cancer care, saving up to seven million lives, WHO urges

The next generation is key for a European renaissance

Eurozone officials play with people’s deposits and minds

Free and secure access needed in DR Congo conflict zone to tackle Ebola – WHO

Ending harmful fisheries subsidies would improve the health of our ocean. This is why

In Tokyo, UN chief expresses full support for US-Japan dialogue with North Korea

Russia: MEPs deplore military build-up, attack in Czechia and jailing of Navalny

European Citizens’ Initiative: Commission decides to register 2 new initiatives

Coronavirus: Chinese aid to the EU delivered to Italy

How to make our cities greener, healthier, wilder and fairer

Tackle ‘tsunami of hatred’ across the world urges Guterres, to counter anti-Semitism, racism and intolerance

European Commission issues first emission of EU SURE social bonds

European Youth Forum welcomes adoption of Sustainable Development Goals and calls on European countries to not ignore them!

UN chief laments ending of Cold War-era disarmament treaty

How insect hotels and honey highways are helping bee populations in the Netherlands

‘Historic’ new Syria talks should focus on relief for war-weary civilians, says UN negotiator

A Sting Exclusive: “Delivering on the Environmental Dimension of the new Sustainable Development Agenda”, Ulf Björnholm underscores from UNEP Brussels

The challenge of palliative care in universal health coverage

Microplastic and nanoplastic pollution threatens our enviroment. How should we respond?

Who threatens the lives and livelihoods of Ukrainians?

Ten reasons to be optimistic in 2019

How electrification will make the world more inclusive

Ecocraft: take gaming to another level by greening Minecraft

Will CETA be implemented after eight long years or it will be vetoed by the EU citizen?

To build back better, we must reinvent capitalism. Here’s how

5 reasons why biodiversity matters – to human health, the economy and your wellbeing

E-energy declaration: will energy digitalization be beneficial to the climate?

New EU farm to fork strategy to make our food healthier and more sustainable

The cuts on 2014 Budget will divide deeply the EU

UN chief ‘deeply saddened’ by Ethiopia plane crash which killed 157, including at least 21 UN workers

The future of work ‘with social justice for all’ tops agenda of centenary UN Labour conference

Brain Drain remains a crucial and unresolved issue

Africa is creating its own Great Wall – and it’s green

What does ‘excess deaths’ mean – and can it give a clearer picture of the number of coronavirus fatalities?

State aid: Commission approves Luxembourg guarantee measure to further support economy in coronavirus outbreak

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: