Markets stabilise after Italian referendum

5-12-2016
BBC

The euro was hit after Mr Renzi announced his intention to resign. At one stage the euro hit $1.0505, its lowest level against the US currency since March 2015.
But it rebounded from that low to stand at $1.0634, a fall of just 0.3%.
Shares in Italian banks opened lower before recovering ground.
The troubled Monte dei Paschi was down by more than 5% in the first few minutes of trade, but then rebounded and had edged into positive territory. Shares in Unicredit and Intesa also fell sharply at first before recovering.

Greece sees final solution on debt crisis amid euro uncertainty

Sun Dec 4, 2016 | 12:22pm EST

Reuters

Political uncertainty in Europe has created fresh momentum for a "comprehensive and permanent" solution to the Greek debt crisis before the year ends, a government spokesman said on Sunday.

Euro zone finance ministers will meet in Brussels on Monday to discuss short-term debt relief for Greece, and Germany's Wolfgang Schaeuble said it must implement reforms instead of hoping for further debt forgiveness.

Greece remained optimistic for a final debt deal, however, just as Italians are voting on a constitutional referendum on Sunday and a victory for the opposition 'No' camp may push the euro zone toward fresh crisis.

Greece and Its Creditors Get Back on a Collision Course

Greece’s woes oblige the eurozone to do something it has rarely appeared capable of doing: take a collective political decision, Simon Nixon writes.

The Wall Street Journal

By SIMON NIXON
Updated Dec. 4, 2016 1:44 p.m. ET
9 COMMENTS
In a continent beset by multiple crises, Greece remains the cradle of European dysfunction. The country may have dropped out of the headlines in recent months, its multiple challenges seemingly buried under a tide of bailout cash. Yet it still presents the greatest risk to the survival of the eurozone. That is because Greece’s circumstances oblige the eurozone to do something it has so far appeared incapable of doing, except under conditions of extreme financial stress: take a collective political decision.

WHY THE FRAGILE STABILITY IN GREECE MAY NOT LAST MUCH LONGER

A crunch summit with creditors begins Monday.
BY JOSH LOWE ON 12/3/16 AT 2:59 PM

Newsweek

It was late November in Athens, and the city felt empty. A string of surprise thunderstorms kept people imprisoned indoors and outside the Greek parliament in Syntagma Square—where anti-austerity protests raged throughout the summer of 2015—was bare but for a few brave tourists and one quizzical-looking stray dog watching the Evzones guards perform their distinctive, shuffling shift change routine, complete with pom-pom shoes and kilts. With so much unrest elsewhere in Europe, it would be easy to think Greece is heading toward relative quietude.

The coming weeks could change all that. On December 5, the finance ministers of the Eurozone will meet in Brussels for their last scheduled summit of the year. On the agenda is the ongoing second review of Greece’s bailout program, which since 2015 has allowed the country to receive financial assistance from European creditors that will eventually total €86 billion ($91.7 billion) in exchange for carrying out reforms including shrinking the public sector, reining in government spending and raising taxes.

Greece needs reforms, not debt relief: Germany's Schaeuble

 Sat Dec 3, 2016 | 6:30pm EST

Reuters

Structural reforms rather than debt relief will help Greece to achieve sustainable growth and stay in the euro zone because rates and repayment are putting hardly any burden on its budget, Gerany's finance minister was quoted as saying on Sunday.

Euro zone finance ministers will meet in Brussels on Monday to discuss short-term measures to lighten Greece's debt burden and to assess Athens' progress in reforms required within its third bailout program.

Asked in an interview by Bild am Sonntag newspaper whether it might be time to tell German voters that a debt cut for Greece was inevitable, Finance Minister Wolfgang Schaeuble said: "That would not help Greece."

Eurozone Bailout Fund Proposes Short-Term Debt Relief for Greece

ESM proposes extension on some maturities and locking in the interest on some loans to ease Greece’s debt load

The Wall Street Journal

By VIKTORIA DENDRINOU
Updated Nov. 30, 2016 7:57 a.m. ET
2 COMMENTS
BRUSSELS—Confidential proposals drawn up by the eurozone’s bailout fund could reduce Greece’s debt load by about a fifth in 2060.

A six-page document, dated Nov. 25 and seen by The Wall Street Journal, was produced by the European Stability Mechanism, the Luxembourg-based eurozone bailout fund. It outlines measures that could be taken in the near future to reduce Greece’s large debt load.

The paper proposes to ease Greece’s debt load by extending some maturities and locking in the interest on some of Greece’s loans to shield it from future interest-rate increases.

The Latest, Greatest Threat to the Euro: Populism

Elections and referendums in the year ahead pose a far different challenge from the financial crisis of recent years

The Wall Street Journal

By GREG IP
Updated Nov. 30, 2016 11:32 a.m. ET


The euro has survived sovereign default, recessions, banking crises and bailouts. It may not survive populism.

In the coming year, the eurozone will host at least five elections or referendums that could bring a populist, euroskeptic party to power. In effect, the common currency is about to play multiple rounds of Russian roulette.

The populist threat is qualitatively different from the financial crisis that first erupted in Greece in 2009 and eventually engulfed half the region. In that case, what worried private investors was that a country, or its banks, would default on its debt and be forced to leave the euro. Investors fled, driving interest rates sky-high and plunging the continent into recession.

Tired of Syriza, Greece embraces a mainstream party

The centre-right New Democracy party is dull, technocratic and leading the polls
Dec 3rd 2016 | ATHENS


The Economist

THE headquarters of New Democracy, a centre-right political party, is in an unexpected part of Athens. The building, surrounded by warehouses, housed a branch of a Japanese technology firm before standing derelict for years. Few other political types are nearby. The rent, at €9,800 ($10,400) a month, is a tenth of what the party’s old office used to cost. Yet the relocation, which happened in August, is also symbolic. As the opposition party has moved to a cheaper part of town, so too does it hope that it can present itself to the public as a new, improved alternative to the Greek government. With Alexis Tsipras, the prime minister (pictured, on the left), growing less popular, New Democracy may well have a chance.

Eurogroup should be 'realistic' on Greece fiscal targets: Dijsselbloem

Tue Nov 29, 2016 | 4:45am EST

Reuters

The chair of the Eurogroup of euro zone finance ministers said on Tuesday that European lenders should be "realistic" in the fiscal targets they set for Greece after 2018, when a program of financial aid will end.

"We need to be realistic," Jeroen Dijsselbloem told the economic affairs committee of the European Parliament, saying that the International Monetary Fund has a point when it says "running a primary surplus of 3.5 percent for a very long time is a huge thing to ask".

Greece can meet 2017 primary surplus, must conclude bailout review- cenbanker

Tue Nov 29, 2016 | 3:25am EST

Reuters
Nov 29 Greece can achieve a primary budget surplus of 2 percent next year, the head of the country's central bank said on Tuesday, warning that the main risk for the economy would be a failure to conclude a crucial bailout review.

"Despite the positive projections ... serious risks remain," Yannis Stournaras told a conference in Athens. "The main risk would be the eventuality of failing to reach agreement on the second bailout review and any delays in implementing the programme or backtracking."

Trump nominates two prominent GOP women: DeVos as education secretary, Haley as U.N. ambassador

The Washington Post

By Jerry Markon, Robert Costa and Emma Brown November 23 at 4:08 PM

President-elect Donald Trump on Wednesday selected two prominent Republican women for Cabinet-level positions, adding diversity to an inner circle that was already coming under fire for being composed mostly of white men.

In a potentially controversial choice, Trump intends to nominate billionaire philanthropist Betsy DeVos for education secretary, turning to a conservative activist who has forcefully pushed for private school voucher programs. Her nomination is expected to face strong opposition from public school advocates, who oppose her efforts to funnel taxpayer dollars from public to private and religious schools.

Weak Tea After Brexit

The May government’s additional spending won’t spur growth.

The Wall Street Journal

Nov. 23, 2016 8:47 p.m. ET


Theresa May’s government delivered another budget statement Wednesday, and we’re pleased to report that not all of the proposals are bad. But whether not-so-bad is good enough to give the economy the boost it will need to power through Britain’s exit from the European Union is another question.

Regarding the good, the best headline to come out of Chancellor Philip Hammond’s Autumn Statement is that the government intends to stick to its schedule for corporate tax cuts, with rates falling to 17% in 2020 from 20% today. That’s down from 28% under Labour Prime Minister Gordon Brown and would be roughly half the rate paid by companies in France and Germany. Mrs. May has also indicated she’s prepared to come down below 15% if necessary.

Turkey and E.U. Near Breaking Point in Membership Talks

By ROD NORDLAND and JAMES KANTERNOV. 23, 2016

The New York Times

ISTANBUL — The European Parliament is likely to vote on Thursday to suspend negotiations to bring Turkey into the European Union, infuriating Ankara and possibly hastening the end of a long and troubled process.

While the vote is advisory rather than binding, the government of President Recep Tayyip Erdogan is smarting from European criticism of its crackdown on opponents and on the news media after a failed coup attempt in July. So it has suggested that, in any event, it may pull out of the process altogether if there is no progress by the end of the year. Such progress now seems improbable.

RPT-INSIGHT-Euro zone nations turn to hedge funds to meet borrowing needs

Tue Nov 22, 2016 | 2:00am EST

Reuters

(Repeats story published on Monday)

* Belgium, Italy and Spain see spike in hedge fund take-up

* Bankers warn trend could exacerbate market volatility

* Risks stir memories of euro zone's sovereign debt crisis

* Long-dated bonds sustain heavy losses in recent sell-off

By Abhinav Ramnarayan and Helen Reid

Greece to continue bailout talks, aiming to finish before December 5

Tue Nov 22, 2016 | 1:42pm EST

Reuters

Greece will continue talks with international creditors on fiscal and labor reforms, aiming to wrap up the second review of its bailout program by early next month ahead of a euro zone finance ministers' meeting, government officials said on Tuesday.

Mission chiefs of the creditor institutions overseeing the program's implementation - the euro zone's ESM rescue fund, the European Central Bank, the International Monetary Fund and the European Commission - left Athens on Tuesday, leaving remaining issues to be resolved by technical staff and via teleconference.

Euro, Dollar Flirt With Parity

Trump outlook and Fed’s likely move are strengthening dollar, and ECB may not help stop euro’s fall

The Wall Street Journal

By MIKE BIRD and  IRA IOSEBASHVILI
Updated Nov. 20, 2016 10:00 p.m. ET

A 10-day losing streak for the euro against the U.S. dollar is rekindling an old debate: Will the common currency reach parity with the dollar?

In the last two weeks, the euro has fallen 4% against the dollar, hitting $1.06, a level last seen 12 months ago.

The sharp shift in expectations for U.S. interest rates and economic growth since the American presidential election has refueled the euro’s fall against the greenback. If the Federal Reserve increases rates, expectations are the dollar would rise further by drawing money to the U.S. looking for higher returns.

Here's When the Dollar and the Euro Are Expected to Hit Parity

Forbes

by  Lucinda Shen  @ShenLucinda  NOVEMBER 21, 2016, 10:59 AM EST

Good news for dollar bulls. Bad news for the global economy.
The euro and the U.S. dollar could be trading one-for-one next year as Europe struggles with political uncertainty and the U.S. is expected to go on a fiscal splurge.

In a note late last week, a team of analysts from Goldman Sachs predicted the two currencies will reach parity by the fourth quarter of 2017. The dollar has risen 4.4% against the euro, and 2% against a basket of world currencies since Donald Trump won the U.S. presidential election Nov. 8. The euro is currently trading at $1.06.

EU’s position in Brexit negotiations does not make sense, Philip Hammond says

The Chancellor accepted that negotiations could create uncertainty for the British economy
The Independent
Jon Stone Political Correspondent

The EU’s hardline stance against the UK in the upcoming Brexit negotiations “doesn’t make a lot of sense”, the Chancellor has said, as he warned that the talks will bring uncertainty to the British economy

A Falling Euro Is Neither A Collapse Nor A Disaster - It's The Solution

NOV 20, 2016 @ 05:35 AM
Forbes

Tim Worstall ,   CONTRIBUTOR
I have opinions about economics, finance and public policy.

Opinions expressed by Forbes Contributors are their own.

The Express is getting rather overeager to tell us that a falling euro/dollar exchange rate is a collapse, an imminent disaster. When, of course, a change in exchange rates is the cure for what ails economies. That’s rather the point of having them in the first place rather than just the one world currency. So that if one economic area is doing differently than some other we can let the exchange rate take the strain of adjustment, rather than having to do that internal devaluation. You know, as the euro itself has forced Greece and Finland to do?

EU Sees ‘Smooth Sailing’ If Greece Implements Needed Reforms

 Richard Bravo

 Matthew Miller

November 18, 2016 — 11:15 AM EET Updated on November 18, 2016 — 11:35 AM EET

Greece and the institutions managing its bailout, currently negotiating policy reforms in Athens, could clear the way for discussions next month to ease the terms of the nation’s debt burden, which could presage a successful resolution of its rescue program, according to the head of the euro area’s Economic and Financial Committee of finance deputies.
“You need to do the reforms and that will bring back growth and that will then unlock those measures which in reality we’ve already agreed on,” Thomas Wieser, head of the Euro Working Group, said in an interview with Bloomberg Television. “I’m very positive by the end of this year we’ll be there then it should be comparatively smooth sailing for the rest of the program.”