Italy is crying for attention. And it should get it.
The sick man of Europe – France – is all over the economic papers for almost a year now. But while the critique focused on Holland and his companions, the biggest economic nonsense competitor walked quietly in the shadow – Italy.
Over the past two weeks, two events drew the attention to the south of the Alps. First, leaving President of the Commission Barosso sent a secret letter to the governments of France and Italy (via Vice-President Katainen). In that, the Commission expressed disappointment at the presented budgets of both countries and requested an explanation on how, actually, they plan to achieve compliance with the Stability and Growth Pact. The rejection of both budgets was at stake.
Viac o All Troubles on Italian Front – Fiat Euro! 45/2014
What are the outcomes of hearings?
The interrogation of new EU Commissioners is almost over. And believe me, it was anything but boring. Lord Hill caused a huge deal of discussion, as the one to supervise the financial markets and defending the interests of the City, according to many. Great Britain is with one foot out of the Union and the ejection of its Commissioner could be the push for the second one. Therefore, the MPs tried to scale back his portfolio, but even this attempt has failed.
Viac o An Obsolete Idea – Fiat Euro! 41/2014
Forget about Scotland, we move on
The big change in the EU did not take a place and Scotland remains the part of the United Kingdom. Even though the largest city – Glasgow – voted for independence, NO won 55:45. But this is not the end of the game for Scotland. Prime Minister Cameron has already appointed Lord Smith to carry out the promises that were given to Scots. Already relatively autonomous country will be given wide powers regarding taxes, spending and social system.
On the southern part of the continent though, the game is just about to start. President of the Autonomous Region of Catalonia, Artur Mas announced that he will prepare the referendum on independence on November 9. But unlike London, in Madrid no one want to accept this and referendum is deemed illegal.
Viac o Back to Business As Usual – Fiat Euro! 39/2014
Women are problem for the Commission. And not the only one.
Donald Tusk became our president. No, Andrej Kiska did not resign – former Polish prime minister became president of the European Council, familiarly called “EU President”. If you have problem remembering who the leaving president is I will help you. His name is Herman van Rompuy. The most exciting moment of his 5-year presidency was being called a damp rug by Nigel Farage publicly in European parliament. His obscureness does not have to be a bad thing. Politician doing nothing is often better than politician full of initiative. And this is especially true for politicians in Brussels.
Viac o We gotta nominate women – Fiat Euro! 36/2014
The economy is stagnating. Once again.
Whistleblowers from among analysts and economists reported total collapse of economy ever since 2007, with a periodicity of a radio traffic service.
Many did not realize though, that the „disaster“ may still be the better case. Some bankruptcies, some lost savings, people will cry a bit and we can move on. However, we are moving closer to the second alternative – long-term economic stagnation.
But after a brief enthusiasm from tenth-ish growths in 2013, complete sobering comes now. The growth in the euro area got to the freezing point. The third biggest economy in a club – Italy – entered its third recession since 2008. Maybe we should write that it actually got stuck in one big recession, with couple of short exhalations. The second largest one – France – is reporting leaving its deficit goal for 2014. Although it was already clear to all of us, the government now officially admits that 3% budget deficit of the state’s budget will not happen this year either. Neither the famous fiscal compact helped to European politicians to adhere to agreed rules. Eurozone debt grows nicely and in the first quarter reached 93.9% of GDP. In June we even noted the new member in the „trillion club“, when Spanish debt exceeded one trillion euros (98.4% of Spanish GDP).
Viac o Freezing Point – Fiat Euro! 33/2014
Good news from the European economy cannot be bad!
The topic of the day concerns sanctions against Russia. We will omit this political-security-international topic with the notion that mutual trade restriction always ends with two losers and no winner. Thus, let’s see what surprise will this bring and rather start on the other side of the planet.
In the end of July, Argentina brought the excitement to the world. This country went bankrupt in 2001 and made a deal with 92% creditors to write off part of its debt. The problem is that part of the rest of creditors decided to go to the court to ask for not part, but everything. And since the bonds were under American law (they would not be much of the interest under Argentinian one), American court decided the case with the result that Argentina has to pay everything. Although only $1.5 billion is in question, such a decision may cause an avalanche of further actions and put Argentina in dilemma how to return borrowed $20 billion which have been spent long ago. As the local government failed in negotiations with creditor about compromise solutions, the country declared bankruptcy this week. Argentinians are probably facing hard times.
Viac o Better Times – Fiat Euro! 31/2014
Except for few unfortunate, high schoolers have already finished their key exams. European banks have not.
Large part of 1600-member crew of ECB officials, 6000 officials in member states and plenty of hired external consultants have occupied 128 key banks in euro area for some time now. They are working on asset quality review. For example, evaluating how the banks assess the risk of loans defaults. The second phase will begin in early August. ECB is supposed to disclose then more details about how gained data are going to be used in the upcoming stress test. In the second half of October, its results are supposed to show us the health of European banking system. Problematic banks must then present their plan to raise additional capital – whether via market or public bailout.
Viac o Final exams – Fiat Euro! 30/2014
Who is heading to the Commission?
With a score of 422:250 votes, it was almost unexpectedly easy for Jean-Claude Juncker to conquer the chair of the head of the European Commission. He is a politician at its best – joining the political party at the age of 20, he started his career as the secretary in the Luxembourg parliament right after graduation, and gradually worked his way up to the quadruple Prime Minister of Luxembourg. As the head of the Euro group, he was one of the most important creators of European anti-crisis measures.
Brussels sighed. No French socialist made it to the top, and neither did German conservative what would only mean bigger conflict between those two countries. Juncker is perfectly easygoing, without any strong opinion – and without any ideas. In his opening speech, he announced the need to prepare 300 billion investment plan to redeem the EU from seven years lasting economic crisis, he talked about securities for young people and deepening of integration. So actually everything what did not work out well yet.
Viac o Everything for Growth – Fiat Euro! 29/2014
Since July, Italy is holding a half a year presidency of the Council of the European Union. The agenda is clear.
J.C. Juncker has secured a major victory when he was nominated as a new President of the European Commission by 26 of 28 MS, on the last Friday of July. The only ones against were Hungary and the U.K., though it was David Cameron who initiated Friday’s vote. Surprising unity of the European politicians caused Cameron the German media title „the loneliest man of Europe“. Juncker will still have to pass a vote in Euro parliament.
Viac o Led by Italians – Fiat euro! 27/2014
Trust, illusions, disappointment, again and again. Romantic songwriters use the story of love to describe such a cycle but honestly – if they would want to be consistent, they would sing about politics. The Game of the European Throne degenerates into a struggle for a new Europe and many naive expectations can expect a cold shower.
Nigel Farage finally managed to form (or rather remake from EFD) his own fraction. EFDD has 48 members from seven countries, 41 of which are either coming from UKIP or the Five Star Movement of Italian comedian Beppe Grillo. In fact, this information did not get much of the attention. The fight for the seat of the President of the Commission is gaining ever greater momentum though, but among „traditional parties“. Temporarily subdued conflict between the „South“ and the „core“ is again at the forefront, as it was in the old days.
Viac o Slap to illusions – Fiat Euro! 26/2014