Foreign News: France and Germany are still miles apart on agreement
I missed yesterday’s links post as I was tied up with other stuff, so today’s links are chock-a-block. My synopses will be a little weak as a result – approximate translations with a little commentary. If you use Google Chrome as a browser, it automatically gives you the choice of translating. So try that too.
- Sarkozy: un acuerdo París-Berlín está lejos · ELPAÍS.com
The accord between Berlin and Paris to save the euro is still “far” from being achieved,Nicolas Sarkozy told his colleagues at the traditional Tuesday lunch. The differences, according to Le Monde, are "profonud", and the French president does not expect a quick solution.
- Umfrage: Deutscher Industrie brechen Aufträge weg – SPIEGEL ONLINE – Nachrichten – Wirtschaft
The weakening economy has now also come to the core of the euro zone. A survey of purchasing managers in November shows contraction in November. Things are worse elsewhere in the euro zone. I think this makes it plain that the euro zone is in a recession.
- Ich werde auch nervös » Spiegelfechter
“When banks can borrow at cheaper rates than governments, this means that their creditworthiness must be higher. Yet everyone knows that practically all the banks would be insolvent if the weren’t for the state guaranteeing their existence. So they can’t possibly be more creditworthy than the states.” Good point. It speaks to a liquidity crisis aka panic, meaning euro area government bond prices do not represent just solvency fears but are the result of a market breakdown that only lenders of last resort can resolve.
- Credit crunch in evidenza con TED Spread e Massa monetaria | IntermarketAndMore
These charts on euro area M3 show contracting money supply. It is a bad sign for the future of credit and real economic activity.
- Gelpolitischer Tsunami: Und was kommt nach der Flut?
Whether the central bank intervention really stops the credit crisis remains to be seen. Blick Log’s scepticism results less from a deep analysis of the new measures and more from the fact that any real economy effects of monetary policy over the last few years have been hardly statistically observable.
- Sådan bor de danske topchefer
This is how Danish top managers live. Pretty nice, but no great shakes – at least by American plutocratic standards!
- La peor situación en la venta de coches desde 1993 – ABC.es
The worst numbers for car purchases in Spain in the last 17 years speaks to a catastrophic fall in aggregate demand. You should expect this drop in demand to have a very negative impact on property prices and therefore on Spanish bank solvency.
- Grecia pierde 14.000 millones en depósitos en dos meses · ELPAÍS.com
Capital flight in Greece continues unabated. The political uncertainty in recent months caused a withdrawal of between 13 and 14 billion euros of deposits in September and October, according to the Bank of Greece. Since January 2010, deposits have fallen 21.3%, representing a loss of 49.8 billion euros.
- Suecia reclama a España e Italia que aceleren las medidas de ajuste fiscal – CincoDías.com
Anders Borg, the Swedish finance minister has appealed to Spain and Italy to accelerate their fiscal adjustments and to "take all of the skeletons out of the closet” because "markets are not going to give them a honeymoon". Essentially, take the deflationary route to crisis resolution one step further.
- Castilla-La Mancha recorta 350 millones más de gasto – CincoDías.com
Castilla-La Mancha will approve 350 million euros more public spending cuts on Friday, with the aim of reducing the regional government deficit. Again, this is the deflationary path that everyone in the euro zone is on. Sheer madness – Spain will almost certainly go into a deflationary spiral.
- Ungarn erhöht in der Schuldenkrise den Leitzins (Wirtschaft, Aktuell, NZZ Online)
Hungary’s central bank increased its policy rate by 50 basis points to 6.5% because of the collapsing currency, the Forint.
- Francia adelanta que el pacto de estabilidad exigirá déficit cero en 2016 – CincoDías.com
I reported on this already. France is going to propose a balanced budget amendment to national constitutions by 2016 to enshrine the fiscal probity that the ECB wants into being. This will require significant cuts. The goal can only be achieved by a combination of equivalent increase in the euro-zone wide external trade balance and decrease in private sector savings. Good luck.
- Acht Milliarden Euro: Euro-Zone gibt Notkredite für Griechenland frei – Nachrichten Wirtschaft – WELT ONLINE
Greece received the 8 billion euros that it wanted. The threat to withhold this money is what caused the government to collapse, the referendum on austerity to be cancelled and a technocratic government which backed austerity measures to be installed.
- Los pilotos de Iberia amenazan con una huelga en Navidad, un año después del caos de los controladores – ABC.es
Spanish airline Iberia’s pilots want to strike over the Christmas holidays.
- El paro de larga duración se extiende a los cabezas de familia y a los titulados medios – CincoDías.com
Adjectives to describe the situation in the Spanish labour market have been exhausted. A study by Manpower reveals that so-called long-term or structural unemployment increasingly affects more heads of families (over 37%) and workers with advanced degrees.
- Las autonomías se aprietan el cinturón y logran congelar su déficit en el 1,19% – ABC.es
10 Spanish regional governments were able to achieve a surplus in the wuarter between July and Spetember. However, Castilla-La Mancha, Murcia and Valencia were at the head of the ranking of those with deficits.