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By David Marsh, MarketWatch MADRID (MarketWatch) — The major German concessions (above all, over the use of ESM European rescue funds directly for Spanish banking recapitalization) agreed at the euro summit are unlikely to enter into force. The compromises announced on Friday between creditors and debtors will fall apart because they are mutually contradictory. The good news (of sorts) is that the European Central Bank is out of the firing [...] Martin Hutchinson: According to financial consultant David Marsh, writing in CBS Marketwatch, the Bundesbank’s net Target-2 assets ballooned to 615 billion euros ($800 billion) in March, while the Banco de Espana’s net liabilities rose to 252 billion euros and the Banca d’Italia’s to 270 billion euros. Don’t forget: the Italian and Spanish central banks can no longer print money to satisfy their obligations; that is the function of the European Central Bank. Thus the [...] By David Marsh, MarketWatch LONDON (MarketWatch) — It’s been a black weekend for economic and monetary union (EMU). The first round of the French presidential elections has torpedoed German Chancellor Angela Merkel’s strategy for guiding cash-strapped EMU members out of trouble. The euro area’s No. 2 creditor country after Germany, the Netherlands, is without a functioning administration after the government fell on Saturday in another row over shoring up the [...] By David Marsh, MarketWatch LONDON — In the high pressure looking-glass world of the euro, nothing is quite what is seems. Good old Isaac Newton’s third law of physics comes into play. Every action brings an equal and opposite reaction. The much-approved long-term €489 billion bank liquidity assistance of the European Central Bank (ECB) implemented before Christmas — with another money auction due on Feb. 29 — has made the [...] By David Marsh, MarketWatch LONDON — A nightmare for France, Italy and Spain. A godsend for far-right nationalist parties across Europe. As the result of the Friday the 13th downgrades, everything gets much more difficult. The slow-motion train crash of economic and monetary union (EMU) has suddenly speeded up. The place in the film where the track breaks up and the railcars spill into the ravine cannot be far away.
By David Marsh, MarketWatch LONDON — “With its exorbitant interest rates and over-valued exchange rate, the monetary policy of the 1990s penalized investment, lowered the competitiveness of French products and French labor, led to an explosion in unemployment and provoked recession. If France had practiced the same monetary policies as England at the beginning of the 1990s, then our public debt would not be much more than theirs.” If you [...] By David Marsh LONDON (MarketWatch) — The extraordinary statement questioning Britain’s credit rating by Christian Noyer, the mild-mannered but highly experienced governor of the Banque de France, has quickly become a cause celebre in the U.K. Indeed his interview in the obscure Le Telegramme newspaper in Brittany could become the monetary equivalent of the celebrated Daily Telegraph affair before the First World War when Kaiser Wilhelm in 1908 gave [...] By David Marsh, MarketWatch LONDON — The world’s greatest macroeconomic imbalances are not between the U.S. and China, as many believe, but within the not-so-united states of Europe. This is just one result of the currency and competitive distortions caused by what German Chancellor Angela Merkel calls the “common destiny” of economic and monetary union. Destabilizing European current-account imbalances will need to be eliminated, sooner [...] |
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