The reports of the death of the European Union have been greatly exaggerated – to quote Mark Twain — a few times already in the bloc’s tumultuous life.
This time, however, the European Central Bank (ECB) cannot be the only one to do “whatever it takes” to save the eurozone – and implicitly the wider EU — from the economic consequences of the Covid-19 crisis.
Speeches and releases from various European Central Bank officials don’t make the best summer reading, that’s for sure. But it might be a good idea to go through a couple of recent ones, which give a hint of what the future might bring.
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.
As more and more people fret about imminent interest rate increases by the Federal Reserve and the Bank of England, a report release by the Bank for International Settlements (BIS) shows that companies and households in the UK would be able to cope relatively well with a rate increase.
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.
Inflation has been on a break for a while, and worries about deflation mount. But rather than worrying, perhaps it would be better to see this new face of the crisis as an extraordinary opportunity: that of doing away with debt as the main driver of growth.
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.