An EU without a UK?
“We would be substantially better off not being in the EU because the opportunity cost of us not being able to make our own trade deals with the emerging economies of the world is holding back British business. In terms...
A Weak Euro Begins the Week as European Manufacturing Data Disappoints
The week begins with a narrowly mixed US dollar. Both Tokyo and London markets are closed today making for somewhat lighter turnover. The dollar has been trading a quarter of a yen above JPY120.00. The euro stands out. It has...
The Euro Reaches a Buying Opportunity, European Bonds Continue to Sell Off on Mixed Data
The euro pullback spurred by the Federal Reserve statement that continued to regard the slowdown as having to been partly caused by transitory factors, was seized upon in Europe as a new buying opportunity. Support is seen near previous resistance...
‘Economic-Only’ vs. ‘Economic-Plus-Political’ EU Membership
Norway is often held aloft as an example that the UK could follow in discussions about a potential British exit from the EU (the so-called Brexit). The Norwegian experience with the EU is unique. It shows it is possible for a...
Where is Greece on Germany’s Priority List?
After several months of tense and often antagonistic negotiations, Greece and its creditors appear to be at a stalemate. In order to receive a further bail-out funds, the Syriza government has proposed a set of reforms that in the view...
Understanding the Divide Between the German Workers and Elite
The differences between Eurozone members tend to be a key focus for investors and policy makers. There is another fissure which is typically is under-appreciated. It is within Germany itself and not discussed in polite company. It is the divide...
Preserving the EU through Compromise with Greece
As the hard talks on Greece’s bailout start again, there is no time to lose. A compromise is possible. Before the weekend, Euro group president Jeroen Djisselbloem said that “Greece wants a lot but has very little money to do that....
Will the OMT Program Turn the Eurozone into a ‘Transfer Union’?
The European Central Bank (ECB) symbolises the strange mix of politics and technocracy that marks EU governance. The bank was pushed to centre stage by the Eurozone debt crisis and the unwillingness or inability of Europe’s national governments to come...
The Impact of the ECB’s Decisions Regarding Greek Debt Largely Confined to Greece
The main story today is not that the ECB will no longer (as of February 11) accept Greek government bonds as collateral and that Greek banks can have access to the national central bank via the Emergency Lending Assistance. That...
Is Europe Stuck with the EMU?
A jacket or shirt may be reversible. Time is unidirectional, we are taught and some things simply cannot be reversed, like a hard-boiled egg.However, science has once again pulled the rug out beneath our feet. Earlier this week, ABC reported...
Implications of the the ECJ Decision for the ECB
The most important development today was the preliminary indications by the European Court of Justice that the ECB's Outright Monetary Transaction initiative was "in principle" consistent with the ECB mandate. Even though the opinion by the Advocate General Villalon is...
Saving the Euro and Greece Should be Europe’s Top Priority
Greece is again making headlines, and markets are concerned the euro crisis is back. Actually, the crisis never left. It is just that for a little while both the authorities and the markets chose to cherish the delusion that policies...
Are Euro Area Deflation Fears Well-Founded?
Oil prices have continued to slide. Brent briefly traded below $50. WTI is below $48. Both have fallen about 10% this week. Prices are stabilizing in late morning in Europe. However, unlike yesterday, the fall in oil prices is not...
The Potential for a ‘Grexit’ – or Not?
After Greek elections, Brussels and Berlin can no longer shun the issue of debt relief. Before the New Year, the Hellenic parliament rejected the nominee of Prime Minister Antonis Samaras for president. In accordance with the Greek constitution, a general election...
Is the Falling Euro Merkel and Draghi’s Fault?
In very early Asian markets, participants responded to Draghi's sovereign bond buying hints, and Merkel's seeming willingness to let Greece leave EMU by sending the euro to a low of $1.1865, according to Bloomberg. The thin conditions exacerbated the move,...