onsdag 30 november 2011

Eurokrisen, uppdatering inför den 9 december

"the people who bullied Europe into adopting a common currency, the people who are bullying both Europe and the United States into austerity — aren’t technocrats. They are, instead, deeply impractical romantics."
Paul Krugman, NYT 20 nov

Den 9 december är det toppmöte igen så det kan vara lönt med ett försök till sammanfattning av vad som hänt sedan sist.

"Mr. González-Páramo even accused investors of cynical self-interest when they pleaded for a European version of quantitative easing, the use of large purchases of securities to encourage economic growth.

“Market participants that call for the E.C.B. to play this role may care only about the nominal value of their assets and the need to avoid losses,” he said in Oxford.

To outsiders, it may seem that the E.C.B., based in Frankfurt and steeped in the conservative culture of the Bundesbank, would rather let the euro go up in smoke than compromise its principles. But policy makers do not see the choice in those terms.

To them, the best way to address the crisis is to stick to principles, the most important of which is preserving price stability. That is set out in the first sentence of the statute that defines the E.C.B.’s tasks. “The primary objective” of the European system of central banks “shall be to maintain price stability,” the statute reads. "
NYT, 25 nov

"the situation in Europe is dire, and two issues crossing my desk this afternoon only add to my angst. First, Karl Smith at Modeled Behavior sees that the ECB is losing all control of monetary policy /.../
Very, very scary - remember that the ECB is the last great hope. But it can't be effective if the European banking system collapses, which looks more likely each day. A signal that the related rush to cash is severe is that the ECB is no longer able to fully sterilize its asset purchases. Stories at the Wall Street Journal and the Financial Times. Recognize the risk that even when the ECB switches to quantitative easing, the resulting cash just sits unused in bank reserves. Sound familiar? Europe has liquidity trap written all over it.

A second point comes from Edward Harrison, who spots a story which claims France and Germany are looking to impose a strict zero (!) percent budget deficit target by 2016."
Tim Duy 29 nov

"It should be painfully evident at this point that any process toward greater fiscal integration will be a years-long process. Financial markets, however, move at something much closer to the speed of light - as fast as traders can hit the "sell" button. /.../
[Merkel] 'The countries who don't keep to the stability pact have to be punished – those who contravene it need to be penalised. We need to make sure this doesn't happen again.'
/.../ It is tough to advise anything other than to sell Europe as long as Germany insists on this morality play."
Tim Duy, 24 nov


"With economic conditions darkening and public benefits rapidly shrinking, next year's social disruptions are likely to make 2011's look like child's play. That, in turn, may make the effort to hold the euro zone together far more difficult."
Ryan Avent, 30 nov

"finance ministers meeting to discuss the future of the European Financial Stability Facility seem to have taken some key decisions regarding the fund. The EFSF will be able to lever its meagre €440 billion in capital (less amounts already committed to rescues for Greece, Ireland, and Portugal) in two different ways. First, by using its resources to guarantee 20% to 30% of the bond issues of struggling peripheral economies and, second, by creating "co-investment funds" that (it is hoped) will attract money from other investors and which can be deployed to buy bonds."
Ryan Avent, 30 nov

Ryan Avent, "Who killed the Eurozone", 28 nov

1 december: ECB-Draghi viktigt tal!

16.57 Analysts at Barclays Capital have this to say about Draghi’s “fiscal compact” comments:

Our interpretation of these remarks is that, subject to a firm agreement on a new fiscal pact at next Friday’s EU summit, and clearly defined plans by the new Italian government to achieve a balanced budget by 2013 (due to be announced next Monday), then the ECB is ready to step up significantly its degree of bond purchases … However, it is by no means certain that the EU Summit will be able to achieve this level of commitment: while we expect developments along these lines, there is considerable uncertainty about the precise outcome.

ur Draghis tal:
A new fiscal compact would be the most important signal from euro area governments for embarking on a path of comprehensive deepening of economic integration. It would also present a clear trajectory for the future evolution of the euro area, thus framing expectations.”

artikel om Draghis tal:

"The Paris plan is for a new fiscal discipline package to be agreed at the euro summit on December 9, paving the way for the ECB to deliver a “Christmas present” of decisive action on the markets, preferably setting ceilings on yields which it will defend at all costs, much as the Bank of Switzerland did in September when it acted to stop the Swiss france rising in value."
Hugn Carnegy på FT:s livekrisblogg 1 december

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