The first thing that jumps out at me is the interview with Marco Buti, who says point blank that austerity must end as it is “pointless”. That’s huge because he is Olli Rehn’s right hand man. And Rehn has just confirmed that the EC is relaxing timetables for France along with the Netherlands, Slovenia, and Poland. After the Draghi presser yesterday, in which, Draghi repeatedly pointed only to medium-term consolidation, the relaxed timetable on France and the Netherlands and Macro Buti’s upcoming comments make it clear that we have entered a new era of EU policy, as I remarked yesterday.
The Dutch-language press in Belgium is reporting that belgium experienced a 3.1% decline in apartment prices nationwide, largely because of weakness in the Dutch-speaking region of Flanders.
My view is that the euro zone sovereign debt crisis will end in a combination of monetisation, breakup or default. Let’s review why.
“The German government has, for the first time, released hundreds of pages of documents from 1994 to 1998 on the introduction of the euro and the inclusion of Italy in the euro zone.”
The rump Dexia now owned by the Belgian government is a structurally loss-making enterprise that will cost the Belgian government 2 billion in deficits every year from 2014.
What is becoming clearer to almost everyone is that this is now no longer simply a Euro periphery sovereign debt crisis. It has become a full blown crisis of confidence in the Euro itself.
There have been several important developments over the weekend which are likely to support the euro at the start of the week, after falling for the past four consecutive weeks and recording a 7-week low before the weekend. However, I continue to expect corrective gains in the euro will be short-lived and subject to headline risks. I still think that the $1.29 year end target for the euro is reasonable.
Foreign news: Belgium gets austerity, EU prepares for Eurobonds, Netherlands says breakup inevitable, Spain to get IMF bailout
Foreign-language economic and finance links for 26 November
Here is the second version of this foreign news links post that I am starting. The feedback yesterday was good. You all said it makes sense to see what the press in country are saying in Europe since that is the locus of the sovereign debt crisis, so I will continue this.
Downgrade watch begins as debt panel concedes defeat – The Hill’s On The Money Credit rating agencies reiterated Monday that the U.S. is at risk of a downgrade following the announcement that the supercommittee has failed. Standard & Poor’s warned lawmakers not to try and roll back the $1.2 trillion in automatic cuts set to begin in 2013. The rater […]
And the crisis continues in Belgium … The acting Belgian Prime Minister Elio Di Rupo officially resigned on Monday night. He has been trying to form a government. But after a serious step forward in October, stalled negotiations have led him to go to King Albert II this afternoon
Belgian newspaper De Standarad reports that the folks at twice bailed out Franco-Belgian bank Dexia are looking for a new name for the company. Apparently, the Dexia brand has been tarnished.
Dexia is Belgium’s version of NCNB, now Bank of America, a small bank that grew enormously through expansion and acquisition.