One of the big issues being debated among European leaders lately is whether political power – principally over fiscal policy – should be further centralised in order to save the eurozone from collapse. ‘Eurocrats’ seem to favour centralisation, but many national governments, not to mention their electorates, oppose this. They fear, not unreasonably, that a… [Read more]
An Assessment Of Political Risks There is a widespread belief that the eurozone will survive, because “there’s no way that German Chancellor Angela Merkel, French President Nicolas Sarkozy, and other European leaders will let 60 years of European integration efforts collapse during their watch”. These leaders will take decisive action at the last minute to… [Read more]
The EU-wide bank stress test results released on July 15 offered little reprieve for financial markets as concerns over the eurozone sovereign debt crisis continue to dominate. At the heart of the stress test scenario is the ‘adverse scenario’, in which the euro-area economy contracts 0.5% in 2011 and equity markets fall 15%, while banks… [Read more]
The Portuguese government finally caved in on April 6 and requested a European Union (EU) bailout. This was effectively a non-event, however. My colleagues and I had long expected the Portuguese to seek external assistance in Q2 2011, and judging by the muted reaction in the euro and bond spreads, the market had already priced… [Read more]
At the last European Council meeting, EU leaders covered a number of strategic energy-related questions, including market liberalisation, energy efficiency and infrastructure, external relations, renewable, and sustainable low carbon technologies. BMI believes that the considerations on infrastructure are by far the most significant and anticipates that both the greenfield and brownfield projects will generate substantial… [Read more]
On November 21, the Irish government formally requested financial support from the European Union, taking the first step in accessing the European Financial Stability Facility (EFSF). The move was largely expected, with visits to Dublin from EU, ECB and IMF officials earlier in the month signaling to markets to price in a bail-out (see Business… [Read more]
Looking at recent economic data and leading indicators, such as the Ifo Business Climate Index, I get the impression that the economic recovery of Europe’s largest economy knows no bounds. Indeed, after posting its fastest economic growth rate since re-unification (at 2.2%), my colleagues at Business Monitor International have upgraded their real GDP growth forecast… [Read more]
