The €100bn rescue package agreed for Spanish banks over the weekend is credible and, to that extent, should be welcomed. But it is not enough, by itself, to stabilize markets on a sustained basis. (more…)
A credible recapitalization of the Spanish banks is now a necessary, though not sufficient, condition to stabilize markets. But there is disagreement about how to achieve this—increasing the risk of a damaging standoff and further volatility in European sovereign-debt markets. (more…)
A surprising amount of common ground was reached at last week’s informal meeting of European Union leaders—but there wasn’t agreement on joint issuance of Eurobonds. (more…)
With party leaders failing to set aside their differences, Greece is set to hold another general election on June 17. The outcome is hard to predict, but one thing is clear: a Greek exit from the euro area is now a possibility that investors need to take very seriously. (more…)
Yields on 10-year Spanish government bonds have risen by 100 basis points since the beginning of March. With attention now switching back to Spain, it seems the brief hope provided by the European Central Bank’s massive liquidity injections has proved to be a false dawn. Why has confidence evaporated so quickly?
Euro-area data have surprised on the upside in the opening weeks of 2012. This is particularly true in Germany, where there has been a strong bounce in key cyclical indicators and genuine signs of expansion. But could Germany be getting too much of a good thing? (more…)