Predicting two more years of economic stagnation

Yesterday, as expected, the European Central Bank kept its basic interest rate unchanged at 0.25%. As usually, the decision was taken in the meeting of the bank’s Governing Council, the first of 2014. At this almost zero interest rate cost commercial banks get ample liquidity from the ECB and then lend this money to the […]

The financial sector cripples Eurozone growth prospects

According to a European Central Bank Press release published on 3 January 2014, Eurozone banks further reduced their overall outstanding balance of loans to the private sector during November 2013. Given that industrial multinationals and big services firms do not rely on bank loans for their financing, it’s mainly the SMEs that have been deprived […]

The EU Commission lets money market funds continue the unholy game of banks

The European Commission adopted yesterday a proposal for measures on shadow banking introducing new but quite loose and thus ineffective rules and controls for money market funds (MMFs). This is a parallel financial system created by the major banks in order to avoid even the few controls and restrictions that the official banking system has […]

An EU Summit without purpose

The most important news from the first day of the 27+1 EU leaders’ gathering (European Council) yesterday was that the Ecofin council of the 27 ministers of Finance managed to come up with an agreement over the bank resolution and recovery, and also that the EU Parliament agreed with the Commission on the Union budgets […]

Whose interests are protected by the new Mortgage Directive?

At a time when very few European consumers decide to look for a mortgage to buy a new home and the European lenders very sparingly grant such loans, the European Commission found the opportunity to launch its new initiative on a Mortgage Directive, supposedly to better protect consumers. Under the experience of the past four […]

Can Eurozone stand economic and financial fragmentation?

Eurozone unemployment rate peaked in February 2013 at 12% but this number says nothing about the real structural problems of the single money zone. The burning issue is the fast growing divergence of unemployment opportunities between the surplus countries in the North and the over indebted member states in the South, plus Ireland. According to […]

South Eurozone needs some…inflation and liquidity

As it was expected, Eurostat proved to be right in its last week’s estimate that February yearly inflation was less than 2% on the average in the 17 member states Eurozone. As a matter of fact yesterday’s announcement of the EU’s statistical service revealed that February inflation was 1.8%. Inflation rates diverged wildly between the […]