With summer over, Italy is back at the forefront of the news – this time not as a holiday destination but in its other capacity, as chief source of market worries. The way things are going, the worries are only just beginning.
This is going to be a crucial year for the European Union. There are more and more voices predicting its disintegration. With the political events that are ahead, it’s not a possibility that should be taken lightly.
A small step for the ECB, a big step for eurozone banks could be one way of looking at a recent announcement by the European Central Bank that it is widening the array of financial instruments that it is accepting as collateral for its monetary operations.
One piece of good news about the eurozone has been overshadowed by the ongoing, Syriza-orchestrated drama on Greece: lending continues to improve, and with it, the prospects for the single currency area.
The financial crisis of 2007-2009 has left a lot of collapsed Spanish castles in its wake, hitting Spanish banks hard.
Pictures of Spain’s ghost towns were splashed across the world’s newspapers at the beginning of the eurozone debt crisis. True, they weren’t as impressive as the Chinese ghost cities, but they show what excess debt and an inflated real estate sector can do to a country – and to its banks.
However, more than five years on since the crisis, the story is slowly changing.
The European Central Bank had no choice but to launch its own quantitative easing programme in the end. The jury is still out on whether it will work – but judging by the first reactions, it could actually mark the return to some sort of normality for the eurozone.