Italy’s populist government appears determined to drive EU economy and markets into recession

The Italian budget plan has recently created turbulences and serious concerns in the EU economy as the third largest economy of the bloc cuts growth forecasts and increases spending. The European Commission together with the International Monetary Fund (IMF) have urged the Italian government to restate its budget and comply with the EU fiscal rules […]

Draghi to lay his print on long term ECB policies prior to exiting next year

Mario Draghi, the President of the European Central Bank, was criticized by major global financial media for insisting to end the easy money policy this December. The argument is that, after ECB’s Governing Council decided at the end of the prosperous 2017 to end its extraordinary monetary policy, the world has become a riskier place. […]

IMF: All you want to know about Argentina

This article is brought to you in association with the International Monetary Fund Written by IMF staff Frequently asked questions about Argentina, June 7, 2018 How much money will be disbursed to Argentina to support the new economic plan? Argentina and IMF staff have reached an agreement on an economic plan that can be supported by […]

Draghi to hold on zero interest rates until he leaves ECB

The announcement of the end of the monthly money injections into Eurozone by Mario Draghi, the President of the European Central Bank was not received in the capital markets as a hawkish toughening of monetary policy, as it theoretically should have been. The reasons are many. On the contrary, the euro lost more ground with […]

‘Safe Eurobonds’: a new trick to betray the south euro area countries

All along the years after the 2008-2010 financial crisis, which in the European Union took the form banking/government debt breakdowns starting with Greece, there were cries for the creation of a solid Eurozone. In every respect, these calls amounted to demands that super prosperous Germany accepts some degree of risk-sharing with the rest of the […]

Draghi keeps the euro cheap, helps debt refinancing, recapitalization of banks and growth

Last Thursday, the European Central Bank decided to keep flooding the Eurozone with hundreds of billions, despite strong objections coming from the frugal German-Dutch duo. Mario Draghi was adamant about that. It’s interesting to follow his response to a journalist’s remark, who reminded him that the “Dutch Central Bank President Klaas Knot said in a […]

Why is Grexit again in the news? Who is to pay for Eurozone’s banking problems?

Grexit, Greece’s exit from the euro area, is back in the news – for the wrong reasons. During this past week, the country’s creditors, the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund, finally agreed amongst themselves to set even tougher conditions in order to continue refinancing the […]

Will Eurozone be able to repay its debts? Is a bubble forming there?

This newspaper has been very reluctant in endorsing the widely accepted view that Eurozone has left behind its stagnation if not recession phase. The reason is that despite the GDP increases by a few decimal points – not more than three – of a percentage unit, inflation kept falling for more than twelve months until […]

ECB with an iron hand disciplines the smaller Eurozone member states; latest victim: Greece

Last Monday the President of the European Central Bank, Mario Draghi reacted strongly while answering a MEP’s question in the European legislature. He was asked if the ECB is “blackmailing” and financially “suffocating” Greece. As expected, he denied the accusations. Was he right though? Rather not. Only some hours afterwards the central bank ordered the […]

France breaks budget promises once again and the EU’s finance offices are shaking

Last Wednesday, just two days before Eurozone’s finance ministers met for informal talks in Milan, the news had come in: France will not achieve a 3% EU budget deficit target this year. During a conference in Paris, the French finance minister Michel Sapin said that the country’s budget deficit will be around 4.4% of GDP in 2014 […]

Can the banking union help Eurozone counter its imminent threats?

The completion of European Banking Union project last month, the most important undertaking of the EU after the introduction of the common euro currency, is undoubtedly the result of a long negotiated compromise, and as such it has many drawbacks. Firstly, it doesn’t recognize the fact that Eurozone’s mega-banks were the main culpable party for […]

IMF’s Lagarde indirectly cautioned Eurozone on deflation

Weak growth is threatened by deflation in the developed world, while emerging markets have to overcome the financial turbulences that lie ahead, due to forthcoming restrictive monetary policy by the US central bank, the Fed. This is what IMF Managing Director Christine Lagarde said yesterday, speaking at the National Press Club in the U.S. capital. […]

The Commission tells Berlin it is legally obliged to help Eurozone out of stagnation

The time has come and the European Commission gave to Germany in writing, what has been so far aired orally. In this respect, Brussels tells Berlin that it is legally obliged to abandon its egotistic austere and protective policies and help itself and the entire Eurozone enter again in a sustainable growth path. Let’s take […]

EU economic governance: More exploitation for the weaker countries

Last Tuesday 15 October was the last day the 28 EU member states, and more so the 18 Eurozone countries, had to submit to the Commission for approval their draft budgets for 2014. It is the first time that the European Union member states and more particularly the euro area countries, before presenting their state […]

Why capital markets have no more reservetions about Eurozone

Borrowing on international markets is not at all a straightforward activity. Things are even more complicated when it comes to long-term debt paper with maturities spanning to decades. This little theory tells a lot about Eurozone’s creditworthiness. As a matter of fact, during the last few weeks the European Financial Stability Facility (EFSF) borrowed from […]

Eurozone: Statistics don’t tell the whole story

  Government sector deficits in Eurozone after having peaked in 2009-2010 are now not only levelling out but actually decreasing. According to Eurostat, the EU statistical service, in the first quarter of 2013 “ the seasonally adjusted general government deficit to GDP ratio was -3.5 % in the euro area (EA-17) and -3.8 % in […]

IMF: Sorry Greece it was a mistake of 11% of your GDP

IMF’s country report on Greece which was published yesterday, recognises that the Fund’s initial programme underestimated by almost 11% of GDP the impact of the draconian austerity measures imposed on the country. As a result recession proved much greater than expected reaching 22% of the GDP. The relevant part of the report says that, “Fiscal […]

Eurozone: New data show recession and debt closer to explosion

Yesterday the world was informed that Eurozone is stuck into recession, after the Eurostat, the EU statistical service, announced that the euro area GDP receded once more during the first quarter of this year. However, this was not news for those who follow closely what is happening in the single euro money zone. Only some […]