Author Archive

European cars at a crossroad

Last weekend’s G7 summit in Canada ended badly, with President Trump withdrawing his support for the summit’s final statement. Heightening tensions between Europe and the US are Trump’s hints that the White House is considering import tariffs on cars and car parts. German firms would be the most impacted if such tariffs were introduced. According […]

Europe chart of the week – Spanish growth

This week saw the final release of Spanish GDP growth for Q1. The economy again managed to post robust growth, the highest among the four largest euro area economies (+0.7% q-o-q versus 0.4% q-o-q for the euro area). The breakdown of figures showed that domestic demand was once again the main growth driver. The carryover […]

Italian politics: habemus deal

Following a spectacular U-turn, the Five Star Movement (MS5) and the League reached a deal to form a government under their original candidate for prime minister, Giuseppe Conte. Both parties agreed on a new finance minister, Giovanni Tria, while Paolo Savona, who was blocked by President Sergio Mattarella last Sunday, will be minister for EU […]

Winter Olympics in South Korea boosts Swiss growth

According to the State Secretariat for Economic Affairs (SECO) quarterly estimates, Swiss real GDP grew by 0.6% q-o-q in Q1 (2.3% q-o-q annualised, 2.2% y-o-y), closely in line with the previous quarter and above consensus expectations (0.5% q-o-q). Several aspects of the report are worth mentioning. First, growth was underpinned by domestic demand, in particular […]

Spain snap elections in sight

Political instability in Spain has added to turmoil in peripheral euro area countries. The situation is not comparable with Italy’s, but since it comes at the same time as a political crisis in the latter, it is increasing market volatility. Last Friday, Spain’s main opposition party, the Socialist party (PSOE) filed a no confidence vote […]

Italy heads towards new elections

This weekend, the Five Star Movement and the League decided to pull the plug on their attempt to form a coalition government after the President of the Republic Sergio Mattarella vetoed the appointment of anti-euro professor Paolo Savona as minister of finance. Mattarella has granted ex-International Monetary Fund official, Carlo Cottarelli, a mandate to form […]

Spaniards back in the mood to borrow

Before the financial crisis, the real estate bubble and the parallel growth in borrowing meant that the indebtedness of Spanish households spiralled ever higher, reaching a peak of 84.7% of GDP in Q2 2010. Since then, Spanish households have tightened their belts, with indebtedness falling to 61.3% of GDP in Q4 2017. However, recent data […]

Switzerland: ‘Sovereign money’ initiative

SWITZERLAND: A TEST BED FOR RADICAL IDEAS The ‘Sovereign money’ initiative, to be voted on in June, aims at a fundamental reform of the Swiss monetary system. In a nutshell, the initiative asks that the creation of money and the granting of loans be separated by barring commercial banks from creating deposits through lending. According […]

Switzerland, still on the monitoring list

The US Department of Treasury has just published its semi-annual report on International Economic and Exchange Rate Policies. The main news was the inclusion of India on the department’s monitoring list, together with five other countries (China, Japan, Korea, Germany and Switzerland). The Treasury has established three criteria for a country to be deemed a […]

Hard data proves soft in the euro area

Euro area industrial production (excluding construction) was weak in February (-0.8% m-o-m) and follows the recent release of other disappointing pieces of hard data such as retail sales, German factory orders and trade. Based on available ‘hard’ data, real GDP growth rate in the euro area is projected to be 0.1-0.2% q-o-q in Q1 2018, […]

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