Latest posts
Get ready for the Spanish bailout
No one can pretend to know whether Spain is illiquid or insolvent without gauging the size of the black hole that is the country’s banking sector. The Spanish government is finally starting to do this: Bankia and other banks are reportedly set to r...
Greek Politics: A Step Towards the Exit
All eyes were on France going into the weekend of May 6th, but it turns out the Greek elections have much bigger potential implications for the future of the eurozone (EZ). Last Sunday marked a seismic shift in Greek politics, in which the two main p...
Spain Following in Ireland’s Footsteps
Watching developments in Spain since the beginning of April has been source of non-stop déjà vu for anyone who spent 2010 watching events unfold in Ireland. There are a number of striking similarities between the position in which the Spanish gover...
Why Spain Won’t Regain Market Confidence
Spain is back in the limelight in the EZ crisis, where it has always belonged based on its fiscal, financial and economic fundamentals. Throughout this crisis, the liquidity or solvency of various sovereigns has been determined to a large degree by m...
EZ break-up stands to benefit the core
I’ve argued elsewhere on this blog that the weaker countries in the EZ stand to benefit from abandoning the euro. Rather than undergo an endless process of retrenchment inside the single currency, they could grow much faster following a nominal dev...
Media round-up: March 2012
March 1, 2012, Foreign Policy, Is Greece a Failed State March 11, 2012, Bloomberg, Greece Will Suffer Less If It Leaves Euro Now March 12, 2012, Bloomberg Business Week, Spain’s Lost Generation Looks Abroad March 13, 2012, 4:30pm, RTE Radio 1,...
Eurozone Crisis: In the Eye of the Storm
The Eurozone crisis has been in retreat since the introduction of the European Central Bank’s (ECB) three-year long-term refinancing operations (LTROs) in late December 2011. At the European Council Meeting in early March, journalists who cover the...
Why Greece could be better off outside the EZ
Last week I wrote about the difficulty of doing business in Greece, and the role that the government plays in perpetuating the bureaucracy. Does all of this mean that Greece is doomed? Not necessarily. Returning to the drachma would be ignominious fo...
Media round-up: February 2012
2 February, 2012, Linkiesta, No time for Mr Monti: Italy will have to restructure its debt 9 February, 2012, BBC Radio 4, Greek PSI 9 February, 2012, Barclays Capital, Investing in Turbulent Times Seminar (Presenter) 11 February, 2012, Barron’...
Note from Athens: Feeling on the ground has palpably changed
I travel to Athens about once every six months and speak with as many contacts as I can, including top policymakers, bankers, journalists, economists and academics. On my most recent trip in mid-February, the feeling on the ground had palpably change...
Media round-up: January 2012
January 5, 2012, 6pm, RTE Six One, Ireland second bailout January 5, 2012, 1pm, RTE News at One, Ireland second bailout January 9, 2012, 4pm, RTE Radio 1, Drivetime, Merkel-Sarkozy press conference January 15, 2012, Sunday Irish Independent, Ireland...
Has the 3-year LTRO changed the path forward for the EZ crisis?
There has been relative calm in the EZ crisis since December last year, when the ECB announced a three-year long term refinancing operation (LTRO) and a sharp widening of its collateral requirements. Government bond yields fell in the periphery and d...
German proposal for Greece’s compliance: accelerating eurozone exit
At the top of my list of to do’s for the past few weeks has been to update the post on Greek PSI that I wrote just before Christmas to include some more recent developments, such as the prospect of ECB participation. Last night, Peter Spiegel from...
Media round-up: December 2011
December 1, 2011, 10pm, BBC Radio 4, The World Tonight, Eurozone Crisis December 1, 2011, 9pm, NPR Marketplace, US decoupling from eurozone December 4, 2011, Irish Daily Mail on Sunday, Euro is a doomed project, so why bother with it? December 5, 201...
3yr LTRO: Breaking or strengthening the banking/sovereign feedback loop?
The 3-year LTRO was announced by ECB president Mario Draghi following the December governing council meeting, alongside (among other things) a drop in collateral requirements at the ECB. These measures were designed to short circuit the endless feedb...
Remember Greek PSI?
Leading up to the October EU summit, there was a lot of speculation about the size and nature of the haircut that would be involved in a private sector involvement (PSI) deal for private bondholders of Greek government debt. The speculation was partl...
EU Summit Dec 8-9th: Kicking the Can Some More
At the very best, the recent EU summit served to do what eurozone leaders do best: buy time. But as with the last summit, what was announced was as important in some ways as what wasn’t announced: a number of details were not agreed and the ECB did...
ESM loses all its teeth
Following German Chancellor Angela Merkel and Sarkozy’s press conference on December 5th, most of the focus has been on the treaty changes proposed, including not-quite-automatic sanctions for profligate countries that miss their budget targets and...
Media round-up: November 2011
November 1, 2011, Today FM Ireland, The Last Word, Greece November 2, 2011, BBC News, Greece November 2, 2011, CBC News, Greece November 7 2011, BBC World Business Report, Italy November 8, 2011, BBC Radio 4, Today Programme, ECB lender of last resor...
Why treaty changes won’t help
Merkonti (Merkel, Sarkozy and Monti) announced at the press conference following their mini-summit today that they are in favour of small treaty changes to take steps towards fiscal integration. We don’t know exactly what these treaty changes will...
