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Archive for the ‘Euro Zone’ Category

Financial Markets, Politics and the New Reality

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Financial Markets, Politics and the New Reality is republished with permission of Stratfor.”

By George Friedman

Louis M. Bacon is the head of Moore Capital Management, one of the largest and most influential hedge funds in the world. Last week, he announced that he was returning one quarter of his largest fund, about $2 billion, to his investors. The reason he gave to The New York Times was that he had found it difficult to invest given the impossibility of predicting the European situation. He was quoted as saying, “The political involvement is so extreme — we have not seen this since the postwar era. What they are doing is trying to thwart natural market outcomes. It is amazing how important the decision-making of one person, Angela Merkel, has become to world markets.” Read the rest of this entry »

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Written by Theophyle

August 10, 2012 at 9:14 am

The Washington Post: Germany offers vision of federalism for the European Union

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By Anthony Faiola and Michael Birnbaum

BRUSSELS — Political posters in Rome are comparing her to Hitler. A popular British magazine dubbed her “Europe’s most dangerous leader.” But could German Chancellor Angela Merkel — the frugal physicist foisting tough austerity on the region’s hard-hit economies — really be the most pro-European leader in Europe? Read the rest of this entry »

Written by Theophyle

June 28, 2012 at 9:26 am

WSJ-E: France is Main Obstacle to a Euro Solution

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Two statements last week following the four-way summit in Rome between the German, French, Italian and Spanish leaders capture the essence of the euro crisis and show why a solution is as far away as ever. Responding to the latest demands that euro-zone bailout funds be allowed directly to recapitalize Spanish banks, German Chancellor Angela Merkel replied: “If I give money to Spanish banks, I’m the German chancellor but I can’t say what these banks do.” Later, French president François Hollande was asked about his willingness to accept further political union as the price of greater pooling of debt, he replied: “There can be no transfer of sovereignty if there is not an improvement in solidarity.” Boiled down, this is a debate over whether Germany should write blank checks. Read the rest of this entry »

Written by Theophyle

June 25, 2012 at 8:46 am

The WSJ-E: World Braces For Test of Euro

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By Stephen Fidler

BRUSSELS—Europe, facing a momentous Greek election after a week of mounting financial stresses, is preparing for what some financial analysts are calling its “Lehman moment”: the prospect that Greece could leave the euro currency union following Sunday’s vote. Yet, European officials say that even an election that results in a Greek embrace of the euro and an acceptance of the terms of Europe’s March bailout of the country may only temporarily ease pressure on the euro zone, whose crisis-management strategy many analysts say lies in shreds. Borrowing costs in Spain and Italy rose sharply higher in recent days despite efforts to insulate Spain, the euro zone’s fourth-largest economy, from the effects of Greek uncertainty by lining up a bailout request last weekend for as much as €100 billion to boost the capital of Spanish banks. Read the rest of this entry »

Written by Theophyle

June 16, 2012 at 9:34 am

G8 – An increasing focus on growth, not austerity

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From The Economist Intelligence Unit

The spectre of financial meltdown in the euro zone was a dominant theme at the summit of G8 leaders at Camp David in the US on May 18th-19th. The summit ended with a joint declaration covering a typically sweeping array of topics, from the risks facing the global economy to the crisis in Syria. But there was no mistaking the fact that the emerging growth-vs-austerity debate—fuelled by political developments in France and Greece, and by fears surrounding financial stresses in Europe—was the issue of the moment. The consensus of international opinion is shifting towards the need for growth-focused policies, but it is also clear that fiscal consolidation will remain paramount. Read the rest of this entry »

Euro slumps to 10-year low vs yen as Greece worries mount

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TOKYO | Mon Sep 12, 2011 12:01am EDT

(Reuters) – The euro hit a six-month low against the dollar and a 10-year trough versus the yen, falling below key technical levels and option barriers on worries that the euro zone’s support for Greece is wobbling and the country may be forced to default on its debt.

The Australian dollar, sometimes seen as a barometer of market players’ risk appetite, tumbled more than 1 percent to a three-week low, below its 200-day moving average, as investors fret that the global economy will be dealt a severe blow if the euro zone debt woes deepen.

“The outlook for Greece is almost completely unknown. Support for the country appears to be shaking. The market is starting to think the worst could happen,” said Katsunori Kitakura, chief dealer at Chuo Mitsui Trust and Banking. Read the rest of this entry »

Written by Theophyle

September 12, 2011 at 9:51 am

Goodbye to Berlin

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German business and politics – Business bosses are growing impatient with a drifting government.

“I SUPPORT the euro, but not at any price,” said Wolfgang Reitzle, chief executive of Linde, an industrial-gas producer, in a recent interview. He is not alone. Many German business leaders are wondering if the apparently never-ending euro-zone bail-outs, to which Germany is the biggest contributor, are beginning to outweigh the (considerable) advantages of the single-currency area.

Their concerns are aggravated by what they see as political drift in Berlin. Many German bosses, say those close to them, have lost faith in the ability of Angela Merkel’s government to steer Europe out of trouble. Looking towards Berlin from their fastnesses in the Ruhr and southern Germany, they see only weak leadership, perverse decision-making and poor communication. These days many no longer bother making the trip to the capital. Read the rest of this entry »

Written by Theophyle

August 18, 2011 at 9:10 am