Europe

There are four main forces shaping the immediate investment climate and these remain essential unchanged: 1) Fed tapering not expected until late Q1 14. 2) ECB will likely take additional action to ease financial conditions and…

With Ireland and Spain poised to leave Europe’s bailout mechanism, Europe appears to have weathered a very big storm. Yet, the Eurozone is still wracked with joblessness and economic growth remains elusive. What’s more, Europe’s…

Over the past few months, the world’s central banks have turned to forward guidance as a central focus of monetary policy. This tool is untested as a central component of monetary policy and has been thrust into the spotlight only because…

According to an account in the Financial Times last week, the latest rate cut by the ECB created a worrying north-south split, with the German-centered group opposing rate cuts and the southern faction wanting them. Today Austrian and…

Private and public debt in the Eurozone increased since the 2000s, and especially so in certain countries. This column presents evidence that high levels of private and public debt, together with deleveraging of all sectors, are especially…

The German-language media have been voicing concerns over the ECB’s low interest-rate policy and its effect on savings and investment in the euro zone. This makes sense given the state of the economy in Germany and Austria is significantly…

Consumer price inflation in the Eurozone has been below the target of 2% and falling for quite some time. But until now, the ECB has been sitting on its hands. Inflation some distance below target didn't appear to bother it - most likely…

Yesterday the European Central Bank cut the interest rate on its main refinancing operations by 25 basis points to a record low 0.25%. It also cut the rate on the marginal lending facility by 25 basis points to 0.75%. The news was…

Current-account deficits have caused problems in several Eurozone countries, but surpluses are also an issue. This column argues that surpluses are detrimental to the welfare of the population to the extent they are driven by structural…

Martin Wolf has written a column in the FT with which I agree, claiming that Germany is a weight on the world. The essence of his argument is that Germany’s export-led growth model is a ‘beggar-thy-neighbor’ policy in a world short of…