News
Daily Morning Newsbriefing
Austerity programmes are now the main driver of the crisis – as S&P; cuts Spain’s rating
Agency cuts Spanish sovereign rating from AA to AA- with negative outlook; says a weakened economic outlook would prolong the Spanish debt crisis; FT has the story that Spain is very likely to miss its deficits targets for 2011 and 2012; and some bad news from Portugal, and some real trouble trouble from Greece; for registered users only.
Discussion focus on Greek haircut of 30-50%
Eurozone officials confirm that pre-summit talks focus on an increase in the size of the Greek haircut from 21% to a range of 30-50%; there are increasing doubts about whether the Greek parliament will endorse the latest set of reforms; European banks threaten to cut lending rather than raise new capital to meet any new capital adequacy requirements;for registered users only.
Comment
An agreement that will accelerate the breakup of Belgium
It looks like there will be a Belgian government soon, 16 months after elections. The underlying agreement was welcomed by all regions, though fundamentally nothing was solved. Tensions are likely to continue.
Economic Stall Speed
Why Barroso has to go
Analysis
Policy Brief: The debate about Eurozone bonds
The European financial crisis is about to get a lot worse. As Germany has started the difficult discussion about the pros and cons of eurobonds, the downturn in the eurozone economy is casting doubs on the EU's and national crisis resolution strategy. In Italy, Silvio Berlusconi’s austerity programme is based almost entirely on tax increases. We expect that it will throw the Italian economy back on the verge of recession. It will have the opposite effect of what it intended to do, and may even end up increasing the deficit. Sooner or later international investors are bound to...
