Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘WSJ’

Crises in Ukraine, Greece Test Merkel’s Influence, Stamina

Posted by hkarner - 16. Februar 2015

Date: 16-02-2015
Source: The Wall Street Journal

Twin Challenges Highlight Two Sides of German Chancellor’s Style: Compromise and Toughness
BERLIN—German Chancellor Angela Merkel touched down in seven national capitals on two continents over eight days in a burst of diplomacy that underscored her status as the most influential leader in Europe.
But after a week of fighting fires in Ukraine and Greece, the next few days could show the limits of her power.

In Ukraine, a cease-fire set to start Sunday will offer the first test of whether the peace agreement that Ms. Merkel, along with the French and Ukrainian leaders, wrung from Russian President Vladimir Putin after 17 hours is worth more than the paper it is written on.
In Brussels, officials from the European Union and International Monetary Fund are assessing Greece’s demands to recut its bailout deal, mindful of Ms. Merkel’s insistence that financial aid to the country be paired with tough austerity measures.

Should either crisis spiral out of control, critics will point to her leadership—trying to compromise with Mr. Putin or pushing a tough line against the Greeks—as a primary culprit.

The two very different challenges have accentuated two sides of Ms. Merkel’s leadership style: In dealing with Ukraine, she pushed for a quick agreement in recent weeks even as critics of her approach, from Eastern Europe to the U.S., charged she was conceding too much to Russia. Den Rest des Beitrags lesen »

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Fitch Strips Austria of Triple-A Rating

Posted by hkarner - 14. Februar 2015

Date: 14-02-2015

Source: The Wall Street Journal

Ratings Firm Also Lowers Ukraine Deeper Into Junk

Fitch Ratings stripped Austria of its pristine triple-A credit rating, saying government debt will reach a higher peak than previously thought, while also lowering its ratings on Ukraine. 

The ratings firm, which lowered Austria’s ratings by one notch to double-A-plus, said the general government debt ratio is expected to peak around 89% of gross domestic product this year, higher than all sovereigns in the triple-A category, except for the U.S. and in line with the ratio in the U.K. 

The cut bring Fitch’s ratings in line with those from Standard & Poor’s Ratings Services.

Fitch said Austria’s debt dynamics have deteriorated significantly in a short time, pointing to the impact of bank restructuring on public finances. It added the progress with the restructuring of medium-size banks that fell into serious distress during the economic downturn has been slow. Den Rest des Beitrags lesen »

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Benefit of ECB’s Bond Buying: Fiscal Breathing Room

Posted by hkarner - 13. Februar 2015

Date: 12-02-2015
Source: The Wall Street Journal

Pains turn to gainsCountries, Such as Spain and Italy, Gain Leeway to Stabilize Their Debt Ratios

When the threat of Greek insolvency first erupted in 2010, the worries rapidly spread to the eurozone’s other peripheral economies, sending borrowing costs skyrocketing.

This time around, what’s happened in Greece has stayed in Greece. While yields on Greek bonds hover near 11%, they’re below 2% in Ireland, Spain and Italy—less than what the U.S. Treasury pays to borrow.

This matters for more than just the markets. It is also critical to the eurozone’s most indebted members’ efforts to fix their finances. As European Central Bank President Mario Draghi said last month in unveiling a much-anticipated plan to purchase government bonds: “All monetary-policy measures have some fiscal implications.”

That would be an understatement. By driving rates so low and promising to buy government bonds, the ECB makes it much easier for peripheral economies to stabilize their crushing debts. It obviates the need for added short-term austerity, which could provoke a political backlash that derails the economic reforms essential to bringing down debt in the long run. In other words, monetary policy is central to the success of fiscal policy. Den Rest des Beitrags lesen »

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European States Gorge on Cheap Debt

Posted by hkarner - 13. Februar 2015

Date: 12-02-2015

Source: The Wall Street Journal

Switzerland Secures World’s Cheapest Borrowing Costs for Any 10-Year Government Bonds

ZURICH—Switzerland secured the world’s cheapest borrowing costs for any 10-year government bond on Wednesday, while other European states also locked in shorter-term deals at subzero or very low rates.

The Alpine country sold debt maturing in 2025 with a yield of only 0.011%, meaning investors earn close to nothing, a first for such long-term debt. Switzerland’s previous record was 0.198% in a deal a month ago, just before the Swiss National Bank ’s surprise decision to abandon its upper limit on the country’s currency and to lower interest rates. Den Rest des Beitrags lesen »

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Can Greek Businesses Even Survive?

Posted by hkarner - 12. Februar 2015

Date: 12-02-2015
Source: The Wall Street Journal

Since 2010, the Total Number of Private Businesses in Greece Dropped by More than 20%

ATHENS—After years of struggling through Greece’s financial crisis, Nikos Vasiliou’s Athens-based lighting company finally began to see signs of a turnaround in 2014.

The relief was short-lived.

A radical leftist party that came to power last month vowing to reverse the austerity forced on Greece by its creditors has reignited fears the country could separate from the euro. With Greece running out of money, the country’s new leadership has only a couple of weeks to reach a compromise.

Mr. Vasiliou’s clients, 60% of whom are outside Greece, are nervous again. Den Rest des Beitrags lesen »

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In Denmark, Depositors to Pay Interest to Bank

Posted by hkarner - 11. Februar 2015

Date: 11-02-2015

Source: The Wall Street Journal

Danish Lenders Are Taking Unprecedented Steps to Combat Negative Interest Rates

In Denmark, banks are flipping the tenets of the industry on their head.

After the Danish central bank recently slashed its benchmark interest rate to well below zero, several of the country’s lenders have followed with highly unusual moves of their own. On Friday, FIH Erhvervsbank announced plans to charge retail customers to hold money in their deposit accounts, the first Danish bank to do so. 

“If people want to put their money with us in our deposit bank, we at least don’t want to lose money on it,” said Palle Nordahl, FIH Erhvervsbank’s chief financial officer.

“Paying our customers zero or positive interest is very bad for profitability.”

Meanwhile, at least two other banks have stopped issuing some types of mortgage-backed bonds, saying an industrywide standard is needed for handling negative rates on the debt. In some cases, Danish mortgage holders have seen rates fall to the point that they are only paying lenders because of fees charged on top of regular interest payments. Den Rest des Beitrags lesen »

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Central Banks Move to Drive Down Currencies, Yielding Domino Effect

Posted by hkarner - 10. Februar 2015

Date: 09-02-2015
Source: The Wall Street Journal

Interest-Rate Cuts, Asset Purchases Ricochet Through Foreign-Exchange Markets; ‘Unspoken Currency War Has Broken Out’

The central-bank stimulus spree of 2015 has the look of a global currency war. In quick succession, countries representing about a third of the world’s economic output—from the eurozone to China, Australia and Canada—have taken steps that have driven down the value of their currencies.

But if it’s a war, it’s a gentle one so far.

Half the central banks representing the Group of 20 developed and large emerging economies, whose top monetary and finance officials meet to discuss the global economy this week in Istanbul, have taken easing steps so far this year. Den Rest des Beitrags lesen »

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Greek Leader Tsipras Pledges to Press Ahead on Undoing Austerity Measures

Posted by hkarner - 9. Februar 2015

Date: 08-02-2015
Source: The Wall Street Journal

Syriza-Led Government’s Plans Put Athens on Collision Course With Europe

ATHENS—Greece unveiled plans Sunday to undo several austerity measures that were a condition of its international bailout, ranging from tax cuts to increasing the minimum wage, putting the country firmly on a collision course with its European partners.

In a speech to lawmakers, Prime Minister Alexis Tsipras reiterated that Greece would seek a bridge loan from its international creditors until June, refusing to accept an extension of its current bailout, as demanded by European partners.

“We know very well that talks won’t be easy and that we are facing an uphill path but we believe in our abilities,” he said, presenting his newly-elected government’s policy statement to lawmakers.

“The more our partners want austerity, the more the problem with the debt will get worse,“ he said. Den Rest des Beitrags lesen »

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So they just stopped paying their taxes?

Posted by hkarner - 7. Februar 2015

Date: 07-02-2015
Source: The Wall Street Journal
Subject: Greece Could Run Out of Cash in Weeks

Request by Athens to Raise an Extra $5 Billion in Short-Term Debt Rejected

Greece warned it was on course to run out of money within weeks if it doesn’t gain access to additional funds, effectively daring Germany and its other European creditors to let it fail and stumble out of the euro.

Greek Economy Minister George Stathakis said in an interview with The Wall Street Journal that a recent drop in tax revenue and other government income had pushed the country’s finances to the brink of collapse.

“We will have liquidity problems in March if taxes don’t improve,” Mr. Stathakis said. “Then we’ll see how harsh Europe is.” Den Rest des Beitrags lesen »

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Tsipras Needs More Than Chavez Touch

Posted by hkarner - 2. Februar 2015

Date: 02-02-2015
Source: The Wall Street Journal By SIMON NIXON

Tsipras’s Venezuelan Policies Risky for Greece

Varoufakis dijsselbloemGreek Finance Minister Yanis Varoufakis, right, with Eurogroup Chairman Jeroen Dijsselbloem in Athens on Jan. 30.

Greece’s moment of maximum danger was in March 2012. Eurozone leaders were meeting for the second time in three weeks to decide whether to grant a second bailout. Failure to do so would lead to a disorderly Greek default and exit from the eurozone. Despite frantic efforts by European Central Bank officials to spell out the risks to skeptical governments in Germany and France, the result hung in the balance. When the deal was agreed, the mood at ECB headquarters in Frankfurt was one of apprehension as well as relief.

“What Greece needs isn’t an IMF bailout program but a World Bank-style state-building program,” a senior official warned. “Greece doesn’t have a functioning public administration. We’re going to have to build one.”

Three years on, eurozone officials acknowledge that rebuild is far from complete. The scale of the challenge was laid bare by Greek journalist Yannis Palaiologos in his recently published book, “The Thirteenth Labour of Hercules.” Through a series of case studies, he shows how corruption and clientelism has brought Greece to its knees: competitive businesses are laid low by politically driven unions, major investments are deterred by 20-year planning disputes, energy prices held artificially high by an over-mighty public monopoly. And there on almost every page, siding with the vested interests against those trying to modernize the Greek economy, is the charismatic figure of Alexis Tsipras, Greece’s newly elected prime minister. Den Rest des Beitrags lesen »

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