Mario Draghi proved last week that the European Central Bank is the only Eurozone institution catering for the entire single money area and not only for part of it. The announcement last week of the details of the new asset-backed securities purchases and covered bond acquisitions programmes, which include Greece and Cyprus under conditions, proves […]ECB reaches the boundaries of its mandate to revive the entirety of Eurozone
October 6, 2014 by Leave a Comment
Mario Draghi proved last week that the European Central Bank is the only Eurozone institution catering for the entire single money area and not only for part of it. The announcement last week of the details of the new asset-backed securities purchases and covered bond acquisitions programmes, which include Greece and Cyprus under conditions, proves […]There is a way for Eurozone to reach a sustainable growth path
September 22, 2014 by Leave a Comment
Slowly but surely Euro area inflation rate heads for the zero zone, making decision makers nervous and everybody else, especially the unemployed young even more pessimistic and passive about their present situation and the future prospects. And all that is happening in this part of the globe where only a few years ago the Europeans […]ECB: Reaching the limits of its mandate to revive the Eurozone economy
September 8, 2014 by Leave a Comment
Everybody agreed that what the European Central Bank decided last week (to lower its basic interest rate to 0.05% and purchase asset backed securities and covered bonds) came as a surprise. As a result, stock and bond markets throughout Europe celebrated this additional almost zero cost liquidity, which Mario Draghi, ECB’s President, is ready to […]Eurozone: GDP development heads to naught; the expensive euro serves only Germany
August 17, 2014 by Leave a Comment
A new Eurostat wave of data statistically confirmed that Eurozone is utterly moored in economic stagnation, with disturbing signs that this might even turn to recession. Most significantly, last week the EU statistical service issued an estimate that the euro area GDP idled with a zero growth rate during the second quarter. The same source […]ECB’s unconventional monetary measures give first tangible results
August 13, 2014 by Leave a Comment
A strong statement was delivered last week by Mario Draghi, President of the European Central Bank. He ascertained that the monetary measures already taken unanimously by the central bank’s Governing Council, “will enhance our accommodative monetary policy stance”. Those measures have led to an easing of the euro/dollar parity favouring a cheaper single money, a […]Finance for SMEs: Alternative supply mechanisms do exist
July 29, 2014 by Leave a Comment
Indisputably, one of the most crucial barriers to economic growth is the lack of adequate financing for SMEs, across the European Union. Indeed, the problem is more acute in the hardest hit by the financial crisis countries like Italy, Spain, Greece, Portugal and Ireland. In some other member states this setback is chronic. The SMEs […]Europe can easily exit from stagnation if Germany changes perspective
July 22, 2014 by Leave a Comment
If things continue on their present course, there is no indication that in the foreseeable future the Eurozone inflation rate could start performing its desirable role again and could signify, or probably even trigger a new period of economic expansion. If the European Central Bank continues resisting the pressures for substantial monetary quantitative easing, the […]The Peoples are missing from EU’s monetary union
July 14, 2014 by Leave a Comment
The disenchantment of the 28 European Peoples with their Union stems from the special care the EU institutions clearly show for the financial sector aka the banks and not for the unemployed. To put it differently so as the Brussels bureaucrats and the decision makers in Berlin and Paris can understand; the European Economic and […]ECB again to subsidize euro area banks with more than one trillion euro
July 10, 2014 by Leave a Comment
The Governing Council of European Central Bank decided last week to hand out to Eurozone banks additional liquidity of up to €1 trillion at almost zero cost, under its new targeted longer-term refinancing operations (TLTROs). At the same time it also decided to “intensify preparatory work related to outright purchases in the Asset Backed Securities […]Will ECB win against low inflation by not following Quantitave Easing?
June 27, 2014 by Leave a Comment
On the 5th of June, the European Central Bank (ECB) decided not to fully deploy all the tools of Quantitative Easing (QE) programme, which showed that the ECB is not yet ready to risk everything in order to deal with low growth and inflation rates. Christine Lagarde, Managing Director of the International Monetary Fund (IMF) […]Is deflation a real danger for Eurozone?
June 17, 2014 by Leave a Comment
There are rare times in the economic chronicle, and here they are now, when the merry going economies like Austria and Luxembourg have decent inflation rates around 1.5%, while the unlucky and miserable ones like Greece, Bulgaria and Portugal are being haunted by negative inflation records of up to -2.1%. Let’s get the full and […]ECB bets billions on Eurozone’s economic recovery
June 9, 2014 by Leave a Comment
Last Wednesday, one day ahead of the regular monthly meeting of European Central Bank’s Governing Council, Eurostat, the EU statistical service, published a Press release on Eurozone’s near zero economic growth. The relevant passage of that text went like this, “Seasonally adjusted GDP rose by 0.2% in the euro area (EA18) and by 0.3% in […]Falling inflation urges ECB to introduce growth measures today
June 5, 2014 by Leave a Comment
Eurostat, the EU statistical service, announced yesterday its flash estimate for May inflation at 0.5%, down from 0.7% in April, thus raising concerns that Eurozone is irreversibly heading to deflation area and confirms fears that the single money zone is threatened by a too low inflation for a too long period of time. Falling […]Quantitative easing: how Mario can tackle low inflation in Eurozone
May 30, 2014 by Leave a Comment
One of the major issues that the European Central Bank (ECB) struggles to solve is low inflation. It seems that it is not even close to the target that has been set; a rate of below but close to 2% over the medium term. April’s inflation data indicated a 0.7% inflation rate, a percentage not far away […]The EU Commission by serving the banks offers poor support to European mainstream political parties
May 17, 2014 by Leave a Comment
The 2008-2012 financial aka banking crisis and its devastating repercussions on the European Union, with deep recession and skyrocketing unemployment, are the main reasons why the EU political and economic establishment shivers ahead of the 22-25 May elections fearing a possible disastrous result. Eurosceptic extremists, nationalists and harlequins may occupy an increased part of the […]Draghi’s ‘quasi’ announcement of a new era of more and cheaper money
May 12, 2014 by Leave a Comment
Mario Draghi, the ECB President, was more than explicit last week, that the European Central Bank will live up to its duty and do in June whatever it takes to help the Eurozone economy grow again and push inflation a bit upwards, back in line with the institutional target, which is below but close to […]Eurozone: Negative statistics bring deflation and recession closer
May 1, 2014 by Leave a Comment
An avalanche of disappointing statistics on Eurozone was released during the last two days, supporting the view that the single money zone is stuck in economic stagnation. The Business Climate Indicator (BCI), Economic Sentiment Indicator (ESI), the annual inflation and a euro area bank lending survey, all those statistics for April show that the euro […]Half of Eurozone in deflation expecting salvation from monetary measures
April 17, 2014 by Leave a Comment
Five Eurozone countries posted negative inflation rate in March (Greece (-1.5%), Cyprus (-0.9%), Portugal (-0.4%), Spain and Slovakia (both -0.2%), while the rate of change of consumer prices ranged between 0.1% and 0.3% in another four euro area members states during the same month. In almost all the rest euro area countries, March inflation appeared […]The completion of the European Banking Union attracts billions of new capital for Eurozone banks
April 16, 2014 by 1 Comment
The European Parliament adopted yesterday with large majorities three legal texts completing the European Banking Union, two years after the initial decision to create a common system, at least in the euro area, of regular bank supervision and resolution of failing lenders. In two separate votes and an approval at second reading without a new […]The ECB will do whatever it takes to set the Eurozone economy again in motion
April 15, 2014 by Leave a Comment
Benoît Cœuré, Member of the Executive Board of the ECB, speaking at the high-level conference on “Monetary Policy in the New Normal” organised by the IMF in Washington D.C., on 13 April 2014, described in detail the unconventional monetary policy tools the Eurozone’s central bank is about to use, in order to affect (reduce) interest […]ECB: A revolutionary idea to revitalize the European economy with cheap loans to SMEs
April 14, 2014 by Leave a Comment
IMF and World Bank’s spring meetings in Washington DC last weekend gave the opportunity to the European Central Bank (ECB), supported by the Bank of England (BoE), to launch a new monetary policy ‘offensive’ in order to revive the stagnant European economy. Mario Draghi, President of ECB clearly stated that the Eurozone’s central bank will […]The IMF overstates the risks for Eurozone and downgrades the threats for the US economy
April 9, 2014 by Leave a Comment
Once more, the International Monetary Fund, with its latest issue of World Economic Outlook, comes back to criticizing Eurozone’s low inflation rate calling it, a ‘key downside risk’ to global growth. Last week IMF’s managing director Christine Lagarde had also singled out Eurozone as the dark growth spot in the developed world threatened by super […]The ECB proposes a swift solution for SMEs’ financing
April 8, 2014 by 1 Comment
The European Central Bank is deeply worried about the ability of Eurozone’s SMEs to access bank financing at a reasonable cost and under competitive terms. The present business loan stalemate has already bitten into the growth prospects of the euro area, mirrored in the dangerous fall of inflation rate towards the deflation zone and the […]The ECB ‘accidentally’ followed IMF‘s policy advice for growth and job creation by printing more money
April 7, 2014 by Leave a Comment
Christine Lagarde, Managing Director of the International Monetary Fund, speaking in Washington DC last Wednesday 2 April stressed that the world economy, in the aftermath of the Great Recession of 2008-2012, faces a long period of slow and sub-par growth, “well below the solid, sustainable growth that is needed to create enough jobs and improve […]Eurozone set to abandon monetary and incomes austerity and adopt growth friendly policies
April 4, 2014 by Leave a Comment
Finally, the European Central Bank’s Governing Council unanimously agreed yesterday to use extraordinary monetary measures to support growth in Eurozone and to counter a possible further fall of inflation rate towards the negative deflation region. To this effect, the ECB stopped just one step short from taking unconventional monetary measures, but the fact that its […]Is Eurozone preparing to abandon austerity and stagnation?
April 3, 2014 by Leave a Comment
Two unrelated at first reading, but in reality very closely connected developments, materialised this week. On the one side it’s the new fall of industrial producer prices in February 2014 (deflation), while on the other, Germany surprised everybody by adopting, for the first time in its economic history, a compulsory minimum wage, expected to be […]Eurozone closer to a deflation – stagnation trap
March 31, 2014 by Leave a Comment
In a six line and few words Press release, Eurostat, the EU statistical service, announced its flash estimate for March Eurozone inflation at 0.5% further down from 0.7% in February, setting wide open the deflation (negative inflation rates) trap for the 18 countries euro area. This fast disinflation (falling inflation rates) course started last October, […]European Banking Union: no one is perfect
March 27, 2014 by 1 Comment
Europe came to an agreement last Thursday 20 March to complete the second pillar of the European Banking Union with the establishment of the Single Resolution Mechanism (SRM). After months and months of negotiations between the European Parliament and the member states, Europe will have as of now the relevant legislation and the mechanisms to function a banking […]Why Eurozone needs a bit more inflation
March 18, 2014 by Leave a Comment
It has become a bad joke to hear the European Central Bank’s Governing Council repeating monotonously that the inflation target for the euro area is below, but close to 2%. Most of the time, the same or the next day the EU’s statistical service (Eurostat) releases data confirming that Eurozone’s inflation is below 1% and […]168 hours left for MEPs – ECOFIN Council to deliver a Banking Union
March 13, 2014 by Leave a Comment
Contradicting messages are emitted from a statement issued yesterday by the lead MEPs currently negotiating the details of the legislation on the Single Resolution Mechanism and Fund for Eurozone banks with the ECOFIN council. This legislation is set to complete the legal and structural background of the European Banking Union. The other pillar of the […]The ECB still protects the banks at the expense of the EU taxpayers
March 10, 2014 by Leave a Comment
In a courageous decision, Emily O’Reilly, the European Ombudsman, condemned the decision of the European Central Bank not to disclose a letter the central bank’s then President, Jean-Claude Trichet, wrote to the Irish Finance Minister in November 2010. O’Reilly stated: “I regret that the Governing Council of the ECB has wasted an opportunity to apply […]A week to decide if the EU is to have a Banking Union
March 8, 2014 by Leave a Comment
This Monday and Tuesday, 10 and 11 March during the Eurogroup and the ECOFIN meetings respectively, the member states will show their willingness to compromise with the Parliament, in order to finalise the legal base of the European Banking Union. This would be the most important EU project after the common currency. The Banking Union […]ECB ready to counter the rise of the euro?
March 7, 2014 by Leave a Comment
As expected by many, the European Central Bank left its basic interest rate unchanged at 0.25%. However, Mario Draghi, the President of ECB, raised the tone of the central bank’s readiness to confront possible unfavorable developments in the money markets. Presumably he has in mind the risks which may arise in international money markets, from […]
