fiscal

  • 30 Mar @ 15:34

    Spain’s new government has announced spending cuts and tax increases worth an estimated EUR 27bn in an endeavour to reduce the gaping fiscal shortfall from 8.5% of GDP at the end of last year to 5.3% by December 31st. Most of the pain is being absorbed by departmental spending – all ministries are to reduce…

  • 27 Mar @ 10:55

    Or: ‘Do as I say, not as I do’. Just six months ago, Dutch Prime Minister Rutte and Finance Minister de Jager were espousing the necessity for exclusion from the eurozone of those sovereigns who flouted Europe’s fiscal rules . In addition, both argued that those that systematically infringe should face tougher sanctions and the…

  • 26 Mar @ 13:25

    Evident over the course of the first quarter of 2012 is growing concern that China’s soft landing might be rather more turbulent than expected. Unsurprisingly, commodity-related investments have started to under-perform, with resource stocks losing favour and high-beta currencies like the Aussie under-performing. Attracting rather less attention is the deteriorating financial predicament in the world’s…

  • 16 Mar @ 21:58

    Increasingly apparent over recent weeks is that some national parliaments at balking at ratifying Europe’s fiscal compact. In France, Socialist opposition leader Hollande has already promised that he will seek to renegotiate the pact should he be elected in the upcoming Presidential election; he currently leads Nicolas Sarkozy in the polls by a comfortable margin…

  • 06 Mar @ 13:29

    Spanish Prime Minister Rajoy deserves considerable credit for his defiant stance against Europe’s fiscal hawks. After Spain recorded a worse-than-expected budget deficit last year of 8.5% of GDP, Brussels had refused to countenance any adjustment to the 4.4% target it had laid out for the current year, despite various attempts by the new Spanish government…

  • 20 Feb @ 17:44

    Adding to the recent woes of the previously impregnable Japanese yen was the announcement overnight that Japan registered a record trade deficit last month. The seasonally-adjusted trade shortfall reached JPY 0.61trln in January, extending a run of deficits that commenced in April last year. Over this period, the cumulative trade deficit is JPY 4trln, or…

  • 16 Feb @ 18:57

    Increasingly apparent is China’s preparedness to reduce its exposure to the dollar and the obligations of the US government. In the year to December, foreign exchange reserves in China rose by USD 330bln to USD 3.18trln. Over the same period, Chinese holdings of US treasuries fell by USD 60bln to USD 1.1 trln. China’s political…

  • 03 Feb @ 12:41

    In sharp contrast to Greece, it is difficult to be too critical of the intentions of politicians on the Iberian Peninsula. Portuguese Prime Minister Pedro Passos Coelho has implemented significant austerity measures designed to lower the budget deficit to 4% of GDP this year, against the headwind of another deep recession, and debt-to-GDP is expected…

  • 24 Jan @ 22:31

    Britain’s net debt has exceeded, for the first time in late 2011, the symbolic threshold of 1,000 billion pounds (1.200 billion euros), according to official statistics released Tuesday. The public sector net borrowing, the government’s preferred measure for evaluating its budgetary performance, amounted to 13.7 billion pounds in December, against 15.9 billion a year earlier….

  • 23 Jan @ 12:38

    According to a Bloomberg story today, European lawmakers have strengthened the latest draft of the fiscal compact to reflect many of the criticisms made earlier this week by the ECB. EU finance ministers will discuss this latest draft at their next meeting on January 23rd. Should the structural budget deficit deviate “significantly” from the target…

  • 10 Jan @ 07:09

    Monday saw so many competing forces at work in the single currency that at times it was difficult to know where to look. For the euro bears, there was the revelation that ECB funding to Italian banks reached an astonishing EUR210bn last month (up EUR57 bn from November), the news that Greek industrial production collapsed…

  • 09 Jan @ 16:33

    With the spotlight very much on the euro over the last few months, the pound has been under the radar for some time now. It quietly attained a fresh 16m high against the single currency overnight; it has attracted some capital inflow from the Continent into both gilts and London property from investors keen to…

  • 09 Jan @ 16:32

    Despite some serious reservations expressed last month when the eurozone fiscal compact was first announced, it appears that it actually does has some teeth. Last week the European Commission rejected the draft 2012 budget submitted by the new Belgium government, claiming that the growth assumptions on which it was based were too optimistic. Olli Rehn,…

  • 14 Nov @ 11:53

    Since its inception over a decade ago, one of the major structural shortcomings of the single currency has been the lack of a fiscal union. Despite the best endeavours of the Stability and Growth Pact (SGP), fiscal monitoring without proper enforceable punitive measures was always going to be a recipe for serious slippage. In 2010,…