Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘Euro’

The EU Should Issue Perpetual Bonds

Posted by hkarner - 21. April 2020

Date: 20‑04‑2020

Source: Project Syndicate by George Soros

George Soros is Chairman of Soros Fund Management and the Open Society Foundations. A pioneer of the hedge‑fund industry, he is the author of many books, including The Alchemy of Finance, The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What it Means, and The Tragedy of the European Union: Disintegration or Revival? His most recent book is In Defense of Open Society (Public Affairs, 2019). 

The disruption in the European Union caused by the COVID‑19 pandemic should be temporary, but only if EU leaders take the extraordinary measures needed to avoid long‑term damage. Fortunately, there is an easy, fast and low‑cost way to finance the proposed €1 trillion European Recovery Fund.

NEW YORK – European Commission President Ursula von der Leyen has announced that Europe will need about €1 trillion ($1.1 trillion) to fight the COVID‑19 pandemic. This money could be used to establish a European Recovery Fund. But where will the money come from? 

I propose that the European Union should raise the money needed for the Recovery Fund by selling “perpetual bonds,” on which the principal does not have to be repaid (although they can be repurchased or redeemed at the issuer’s discretion). Authorizing this issue should be the first priority for the forthcoming European Council summit on April 23. Den Rest des Beitrags lesen »

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Will Eurozone Policymakers Take the Long View?

Posted by hkarner - 8. Januar 2020

Daniel Gros is Director of the Centre for European Policy Studies.

The 2010s were an exceptional decade that called for unprecedented economic policies. Now, however, the eurozone’s fiscal and monetary policymakers must think more long-term and accept that continued stimulus measures are unlikely to offset the effects of Europe’s demographic decline.

BRUSSELS – The beginning of a new year, and the start of a new decade, is a good time for longer-term reflection on economic policy. In the 2010s, a decade dominated by the aftermath of a once-in-a-lifetime financial crisis, a strong monetary and fiscal stimulus was clearly justified. In fact, there is now general agreement that large fiscal expansions by governments almost everywhere, followed by unconventional monetary policies, were instrumental in preventing the Great Recession from turning into a repeat of the Great Depression of the 1930s.

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Revisiting the euro’s north-south rift

Posted by hkarner - 9. November 2019

Date: 07-11-2019
Source: The Economist

Income gaps remain, but cross-border flows are more balanced

Since the euro zone was first engulfed by a sovereign-debt crisis a decade ago, northern member states have dished out plenty of strictures. “Greece, but also Spain and Portugal, have to understand that hard work…comes before the siesta,” advised Bild, a German tabloid, in 2015. Two years later, even as the crisis receded, Jeroen Dijsselbloem, then the Dutch finance minister, told southerners: “You cannot spend all the money on drinks and women and then ask for help.”

Northerners’ constant fear of underwriting southern irresponsibility has led politicians from Amsterdam to Helsinki to put the brake on banking reforms and fiscal integration across the zone. It has caused numerous fights over monetary policy, the latest of which is in full swing. On November 1st the European Central Bank (ecb) resumed quantitative easing (qe), the purchase of bonds using newly created money. The decision to do so, made in September, was roundly attacked by newspapers—and even former and current central bankers—in northern countries including Germany and the Netherlands. The complaints reflect savers’ dread of negative interest rates and a suspicion that easing lets indebted southern countries off the hook. Together this can make monetary policy seem like a source of transfers. Den Rest des Beitrags lesen »

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Rom verteidigt seine neue Schuldenpolitik

Posted by hkarner - 25. Oktober 2019

Finanzminister Gualtieri will mit expansiven Maßnahmen das Wirtschaftswachstum in Italien ankurbeln, heißt es im Brief nach Brüssel

Erhoffen von der neuen EU-Kommission in Brüssel Verständnis für ihre Wachstumspolitik auf Pump: Premier Guiseppe Conte und sein Finanzminister Roberto Gualtieri.

Rom/Brüssel – Die italienische Regierung von Giuseppe Conte hat mit einem Brief an die EU-Kommission auf die Bedenken Brüssels zu ihrem Haushaltsentwurf geantwortet. „Wir vertrauen darauf, dass unsere Bemühungen in Sachen Haushaltskonsolidierung und strukturelle Reformen zu einer weiteren Defizitsenkung führen werden“, schrieb der italienische Wirtschafts- und Finanzminister Roberto Gualtieri darin.

In dem Schreiben an EU-Wirtschaftskommissar Pierre Moscovici und an Kommissions-Vizepräsident Valdis Dombrovskis, das auszugsweise am Donnerstag veröffentlicht wurde, betonte Gualtieri, dass Italien Einsparungen in der öffentlichen Verwaltung in der Größenordnung von einer Milliarde Euro 2020 und von 1,2 Milliarden Euro in den Jahren 2021 und 2022 plane. Italien bemühe sich auch um eine Vereinfachung des Steuersystems.

Italien verlangt Flexibilität

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The Eurozone’s 2% Fixation

Posted by hkarner - 8. Oktober 2019

Daniel Gros is Director of the Centre for European Policy Studies.

The European Central Bank’s inflation target of “below, but close to, 2%” currently dominates economic policymaking in the eurozone. Moreover, the idea that this target supersedes the bloc’s fiscal rules seems to be gaining ground – with potentially worrying implications for financial stability.

BRUSSELS – Economic policy discussions in Europe used to be dominated by the number three, namely the 3%-of-GDP upper limit on national fiscal deficits. Although the fiscal rules enshrined in the Maastricht Treaty were in fact much more complex, public debate tended to focus on the 3% figure, especially when deficits ballooned during the euro crisis nearly a decade ago.

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Europe’s Banks Warn About Prospects

Posted by hkarner - 9. August 2019

Date: 08-08-2019
Source: The Wall Street Journal

Continent’s lenders are grappling with lower interest rates and geopolitical tensions

For Europe’s lenders, the hits keep on coming.

Banks in Germany, Italy and the Netherlands warned Wednesday that making money and improving their operations are becoming more challenging as already-low interest rates look set to tick lower.

Shares of Commerzbank AG , UniCredit SpA and ABN Amro Bank NV fell sharply as they struck a gloomy tone about their outlook in reporting second-quarter earnings.

A low-rate environment that has lasted longer than many expected has already taken a toll on the profitability of banks in the region. They are also grappling with a slowing economy, the impact of trade tensions between the U.S. and China and the possibility that the U.K. drops out of the European Union with no agreement.

“Banks will have to find ways to make money in a more challenging environment,” said Vincenzo Longo, a Milan-based strategist at IG Group . He also said that banks clearly had further to go in restructuring and that they would likely take a hit from the slowdown in manufacturing, particularly in Germany.

‘As client rates are close to zero, it will be increasingly difficult to offset the decline,’ said ABN AMRO Chief Executive Kees van Dijkhuizen.

Tumbling U.S. yields also took a toll on U.S. banks shares. The KBW Nasdaq Bank Index was down 3.1% Wednesday, bringing its drop in the past week to nearly 9.5% in another sign of unease about the health of the U.S. economy. Den Rest des Beitrags lesen »

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The Money’s More Than Free. Why Won’t Europeans Borrow?

Posted by hkarner - 24. Juli 2019

Date: 22-07-2019
Source: The Wall Street Journal

Which explanation you prefer determines whether you think the European Central Bank is right to be considering another cut

It is plausible that negative rates have worked, as eurozone investment since rates went negative in June 2014 has been slightly ahead of the U.S.

When it comes to interest rates, the U.S. and Europe are upside down.

A big worry about the expected interest-rate cut in the U.S. is that it will encourage too much borrowing, inflating bubbles in debt and equity markets. A big worry about the expected interest-rate cut in Europe is that it will discourage borrowing, with many companies, households and governments paying down debt even with negative central-bank rates. Den Rest des Beitrags lesen »

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The Central Banker Europe Needs

Posted by hkarner - 10. Juli 2019

Barry Eichengreen is Professor of Economics at the University of California, Berkeley, and a former senior policy adviser at the International Monetary Fund. His latest book is The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era.

While having a president with specialized training as a monetary economist would benefit the European Central Bank, such training is not essential. If Christine Lagarde is confirmed for the position, Europe will learn that other attributes matter much more.

CAMBRIDGE – The selection of the International Monetary Fund’s managing director, Christine Lagarde, to succeed Mario Draghi as the next president of the European Central Bank caught most observers by surprise. Now the critics are making up for lost time. Some commentators object that Lagarde lacks experience as a central banker. Others complain that she lacks an advanced degree in economics.

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For Europe, There’s an Upside to Germany’s Slowdown

Posted by hkarner - 8. Juli 2019

Date: 07-07-2019
Source: The Wall Street Journal

Loss of momentum could coax the government in Berlin to open its wallet

Germany has emerged as a major victim of global uncertainties because of its heavy reliance on exports, which account for 47% of its economic output. Employees at a BMW factory in Leipzig.

Germany’s economic slowdown, though no doubt bad for Europe in the short term, could be helpful over a longer period by easing a rift between the region’s economically stronger north and weaker south over pro-growth policies.

The country accounts for nearly a third of all economic activity in the eurozone, but no European Union economy grew more slowly in the year through March, aside from Italy. That puts Germans more in sync with the rest of the region as global growth cools, Brexit drags on and trade tensions linger between the U.S. and China. Den Rest des Beitrags lesen »

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Lagarde Is the Right Choice

Posted by hkarner - 5. Juli 2019

Philippe Legrain

Philippe Legrain, a former economic adviser to the president of the European Commission, is a visiting senior fellow at the London School of Economics’ European Institute and the founder of Open Political Economy Network (OPEN), an international think-tank whose mission is to advance open, liberal societies. His most recent book is European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right.

The nomination of Christine Lagarde to be the next president of the European Central Bank is a breath of fresh air for the stale, male-dominated institution. Incumbent President Mario Draghi may seem like a hard act to follow, but Lagarde has what it takes to succeed. She needs to be bold.

LONDON – The choice of Christine Lagarde, the managing director of the International Monetary Fund and a former French finance minister, to succeed Mario Draghi as president of the European Central Bank, is controversial. It should not be.

To be sure, the political horse-trading through which top European Union positions are allocated is unedifying. Lagarde was selected not in an open, merit-based appointment process, but rather as part of a backroom deal that also involved the nomination of Ursula von der Leyen, the German defense minister, to be the next president of the European Commission.But despite the opacity of the appointment process, and although she was chosen in part because she is a woman, French, and from the center-right European People’s Party, Lagarde would bring formidable qualities to the role. Den Rest des Beitrags lesen »

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