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AN ECONOMIST FROM the second-largest bank in France, Société Générale, has highlighted what she believes is going to happen next in Europe.
Michala Marcussen set the scene in her note yesterday: There’s hype ahead of the September 6 meeting (of the European Central Bank). There are all kinds of pre-meetings planned. Rumours are flying in the press.
Suspense is mounting ahead of the 6 September ECB meeting where markets hope to see the modalities of the new non-standard measures unveiled. Press is rife with debate on the possibilities and, on Monday, Italian Industry Minister Passera criticised an excess of “incoherent and disruptive communications which have also disturbed markets.” One message is clear and consistent, however, there will be further risk sharing in the euro area, but NOT without conditionality. Conditionality is a political process and will take time, a conclusion that is entirely consistent with steeper peripheral yield curves.Euro-area crisis resolution talks are still ongoing at both the ECB and amongst European leaders. Chancellor Merkel is due to meet President Hollande on 23 August, Prime Minister Samaras on 24 August, Prime Minister Monti on 29 August and Prime Minister Rajoy on 6 September – coincidentally the same day that markets hope the ECB will unveil the modalities of the new non-standard measures announced by President Draghi at the 2 August ECB meeting.
In our opinion, there is today no final blueprint ready. The Bundesbank’s Monthly Report (released Monday) offered some new clues, however. Weighing these along with other available evidence, several points stand out.
Marcussen then lays out 5 points, which we shall summarize:
So the blueprint isn’t there yet, but a lot of hints are coming.
Pay close attention to the upcoming meetings between the various leaders: Monti, Hollande, Rajoy, Merkel. That’s where a lot of political work will happen to grease the wheels for the ECB.
Finally, Marcussen believes that all of this is consistent with the latest “bull steeping” in the European peripheral bond markets, whereby yields are coming down everywhere, but doing so a lot faster at the short end, while still remaining quite elevated at the long end.
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Are we near the end. Is the euro finished. Some really big names think we are. If the euro collapses what was the last 4 years all about. If it is gone the political classes of europe have a lot to answer for including our own.
Not even close to the end! I think Europe has woken up at last! Germany has at long last realised that the Euro has to be saved! Greece should come out of all this with a much greater chance of survival, and Ireland will have its bank debts completely restructured! Hopefully now, we can all look ahead with real optimism!
Yes you are correct but this is just all out panic. Finlands government have said that they are getting ready to depart & would advise strongly that everyone else prepare to do the same. Its not looking good for the euro.
Will you give over, you sound like a boiler room trader trying to whip up needless hysteria over something that is highly unlikely to happen!!
Im not saying its going to happen but the finnish government & opposition have said they are ready & strongly advises everone else does. Ecb says it will do anything to save the euro. Looks like panic to me.
Did you read the same article I did? More importantly, do you know how to punctuate?
No Conor can I look to you.
The idea of unlimited bondbuying has spooked Soros, Rothchilds, Paulson and the Finnish government. Unlimited bondbuying basically means unlimited issuance of Euros- Mugabe economics.
Whatever way the ECB intervenes in the sovereign bond markets the result will be the same. Spain and Italy will become increasingly more dependent on the ECB for funding.
” Printing money to try and stimulate your economy or excessive credit growth is what leads to inflation. Printing money because you are broke and can’t service your debts is what leads to hyperinflation.”
Jordan Roy-Byrne
This is the way all finish politicians speak always prepared for the worst this is either new or out of character.
As for printing euros to buy our way out, The Americans have been printing by the boatload with their QE program for the last few years. the fact that there is/are no strong currencies /economies left the compare one blocs fall too, their all going together ..
“Conditionality” means the Germans, whose banks were central to the crash, decide the budgets of the rest of Europe.
It is their money, after all. You cam’t blame them for wanting to increase the odds of ever seeing it again.
Blame the Germans if we had followed the German model we would not be in this mess.We don’t have the economic discipline or work ethic to match the Germans and to blame the German banks for our problems beggars belief,they did not twist our arm to take the money no we greedily grabbed and blew it.A great Irishism it’s always someone else’s fault.
Yes, it’s always a horrific situation when evil foreigners come in and force you to take their money. I’d feel violated if it ever happened to me. I’m off to join Sinn Fein, they know the truth right enough, and they swear that they can remove unemployment p, increase social welfare and lower taxes in one fell swoop by forcing the 1,000,000 people in Ireland who earn more than €500,000 a month to pay their fair share of taxes. There’s a free T-Shirt for every new member as well!
So the EU leaders are going to have a meeting about meeting and try to come up with a solution.Maybe they should look at the film Ground Hog Day.It’s the same old crap happening over and over again.
Start the printing presses boys,The punt is coming home.
If it does I hope u don’t own a house :(
@ Time to print punts? Then it time to to stockpile another currency. Any other currency. Of all the many pro-new currency commenters I asked time and time agin, none have been able to give a straight answer to my question; what would the initial value of the punt nua be based on. I presume that they haven’t answered because the answer is clear; the idea if a punt nua is ridiculous because it’s value would be too low to be of any practical use. We have a sizable public spending deceit and we re massively in debt. If we default on that debt than no-one will touch our bonds unless we offer a yield so high that we couldn’t honored them. The is possibly the worst time to conceive of creating a new currency, and yet it’s the time when the hoopleheads are shouting most loudly for it.
@Nikolas, Punt Nua is already available and you can exchange €5 for PN£186 on puntnua.bigcartel.com
You can also like Punt Nua on Facebook www,Facebook.com/PuntNUa
Nice gimmick, and I sincerely hope you do well out of it ( if it is your baby ), but it’s not a legitimate currency. The exchange rate sounds about right though. :-)
Oh look, we have a new word for the taking away of sovereignty; conditionality – consequence – equal misery for all. Think it’s time the bankers took some the hit for the reckless lending . . German and French Banks ‘World Tour, which recently found it’s way in to the satellites of Europe now reeks the same havoc (on Chinese money) Again ‘Europe’ will present us with only one solution – theirs – take it or leave it; and so the circus will continue – for a few years more. And what of the last four; well at 92,000+ for five years, plus expenses and guaranteed pension – whose worried!
Martin, I admire your starting a new party, but instead of just complaining, you really need to offer some valid alternatives to be seen as credible. I’m not saying you don’t have any, but if you do, you need to make them public, or people are just going to pass you over.
So another defining moment coming up? We have been hearing about these major steps for the last 4 years. Do not expect anything concrete to come out of these discussions. There will be a lot of talk and aspirations but little else. Same old same old……
nikolas i got an idea lets have areal investigation in to what went on in our banking fiasco plus the blanket gaurantee to the banks this should get give us a little more time in the hangmans noose
A real investigation would be a wonderful thing. I’d have my own pet theories about why the bank debt was taken on, and I’d love to see how off the mark I was with that. The main problem I see with an investigation is who could be trusted to run it. Much as I hate to say it, it couldn’t be run by an Irish investigator or even anyone linked into the EU. I’d say get the Americans back on board. It might sting a bit to ask for their help, but they were invaluable in getting things settled and functioning with the peace process up north.
have your say