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Category Archives: eurozone

Government debt continues to rise in the EU

The government debt to GDP ratio in the euro area rose from 92.3% at the end of the first quarter of 2013, to 93.4% at the end of the second quarter of 2013, according to figures released yesterday by Eurostat. When we look at the whole of the EU, the EU28, the figures rose from 85.9% to 86.8% over the … Continue reading

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Prospects for growth worsen

The Confederation of British Industry (CBI) has slashed its forecasts for growth in the UK. It had previously predicted that we would see growth of 1.3% this year and 2.2% in 2012, but these have now been reduced to only 0.9% this year and 1.2% next year. The CBI does not believe that we will slip back into recession this … Continue reading

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And so the contagion spreads

Italy has become the latest country to have its sovereign debt rating cut. Standard and Poor’s (S&P), the debt rating agency, has reduced Italy’s rating down one level from A+ to A. The debt rating is meant to give a signal as to how reliable the country will be in repaying its debt. Italy has a debt to GDP ratio … Continue reading

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Will Greece bring the eurozone down?

There is a crisis in Europe at the moment as a result of the possibility of Greece defaulting on its debts. The euro has fallen in value and stock markets have dropped around the world during the last few days. Even the Chinese have expressed concern, because Europe is such an important market for them. Greece is a basket case, … Continue reading

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The Irish crisis: Is it too late to cancel Christmas?

Thank goodness the UK is not in the eurozone. Ireland is on the verge of another banking crisis due to an ill-advised lending policy, which fuelled a property boom which turned to bust during the recession. Although the Irish government initially said that it did not need any help, the EU has sent the ‘heavies’ in, with the European Central … Continue reading

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Oh no, it’s started already.

Following my blog yesterday on the dangers of austerity packages, Ireland’s actions are coming home to roost. Ireland had been praised in some quarters for its savage austerity measures which have led to rising unemployment. But it has just been announced that the Irish Republic saw shrinkage of its economy by 1.2% in the second quarter. The fact that government’s … Continue reading

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Do falling markets and tighter liquidity signal a new Great Depression?

This seems a surprising prospect at the moment, but according to Telegraph.co.uk this morning, Andrew Roberts, head of European rates strategy at RBS, said: “Great Depression II” could now be approaching; adding: “It now has the potential to speed toward its conclusion; a European $1 trillion package which does little and political panic tells you we are about to reach … Continue reading

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We shall defend the euro whatever it takes

These are the words of Ollie Rehn, the EU Economic Affairs Commissioner over the weekend after EU finance ministers were involved in eleven hours of talks. The result of the emergency meeting which was brought together to deal with the fiasco in Greece, will have far-reaching implications throughout the eurozone. The agreement means that the 16 countries in the euro … Continue reading

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Avoiding a forest fire in the EU

“It is absolutely essential to contain the bushfire in Greece so that it will not become a forest fire and a threat to financial stability for the European Union and its economy as a whole.” So said Ollie Rehn, the EU economic and monetary affairs commissioner at a news conference in Brussels. From forest fire to deadly disease: Dominique Strauss-Kahn, … Continue reading

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Benefits and costs from monetary union

At the end of last week, Francesco Paolo Mongelli, Professor at the University of Frankfurt, published a brief article entitled “Some benefits and costs from participating in a monetary union.” In his conclusion he says that: “There is a broad range of benefits and costs in sharing a currency. Contrary to conventional wisdom, the macroeconomic costs of losing influence over … Continue reading

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