Portugal - not the biggest problem in the Eurozone. Italy's all my fault!
Saymon Nikson, the chief of department of European observers Wall Street Journal, says that the Portuguese economy - not so gentle castle in the air, what may seem. This castle will stand in the face of problems with BSE.
But what should really worry investors - so it is slowing the recovery of major economies of the Eurozone. Adapted translation of his article, I bring to your attention.
Not so bad in Portugal
A few days
last week showed solid
deja vu on all fronts. Sword of Damocles,
hanging over the Portuguese bank,
I scared the whole European market. fell
stocks, bonds spreads
peripheral countries widened and
Spreads for the major European economies
- on the contrary, suzilis.Prizraki that
more recently we wandered through Europe,
again began to frighten investors it
the fragility of the European banking system and
risks of its instant infection
in the case of local problems.
It would seem,
Many argued that the fluctuations of the market
expected for a long time. Flows of money that
wide rivers flowing to Europe for
this year, was simply extraordinary.
market doors were wide open for
each government, each
bank. Own bonds issued
even Cyprus, and its largest bank steady
It stands in the way of rise in price of shares. European
high-yield bond market is
in full blossom. All this clearly
signals: investors underestimate
risks that still teem with dark
corners of the eurozone, but in the meantime the regulator
has adopted a policy that
more and more encouraging investors
to take these risks.
A heavy blow,
which overtook Banco Espirito Santo,
perhaps prompted many investors
take the money off the table and stop
game. Portuguese bank controlled
through a cascade of family holding
companies, and it has come under a lot of pressure,
when financial problems were revealed
not so much from him, how much
his "pope" - the company Espirito
Santo International, a giant with a variety of
interests around the world.
The situation in
BES now!
It looks much better than all of fright
It appeared last week. his contributions
other "parent" units
Holding up 1.1 billion euros. And this
in the context of the 100 billion balance and
shares at € 7 billion (up 2.1 billion
exceeds the regulator
minimum). Even if the worst develop
scenario - BES
comes under pressure
to comply with the guarantees given by the holder
its controlling interest to buyers
shares, the amount of liabilities increased
to 700 million euros (up 1.8 billion) - that no one,
certainly not be pleased, but the bank will stand.
Of course, this confusion and vacillation
will be painful for shareholders,
who now lull their toll on
newly bought shares. However,
Government has an additional 6 billion euros
anti-crisis reserve, designed
to recapitalize the banks, and that,
in principle, able to fill any
shortages.
With all of this
experts still see no reason,
on which problems in BES
should cause long-term
difficulties for Portugal. The country has
sees profits and benefits from a long-term
reform program. Economic growth in this
year, is expected to be above average
in the euro area by 1.2%, and the next year
It will rise to 1.5%. unemployment smoothly
It moves from its peak of 17.5% down, and
three past quarter went down to 14.3%, which,
in turn, stimulates recovery
households.
bank
system of the country is not confined to one
BES - and believe me, there is also
all in relative order. The second
largest credit institution
Portugal, Millenium BCP, earned
recent Euro 2.25 billion in the production of new
shares. The Portuguese banking system
becomes also the new beneficiary
long-term low-yield bonds
ECB.
In short, on the
Portugal should not worry.
But all is not well in Italy
market experts
consider that BES - not the main
threat to stability even finansovovoy
individual Portugal, not to mention
It mentions the European community as a whole. there are
other risks, which should have been
serious worry investors - and
They may have played a role in the sell-off
last week. What really needs to
excite investors - the fact that,
It seems to stop the growth of the largest
Eurozone economies.
recent releases
indicate a decrease in production
in June in Germany, France and Italy.
Some of these problems can be attributed to
non-systemic factors, including vacation
time and adverse weather
conditions. The crisis in Ukraine could also
impact on German exports. And here
real disappointment due to the
unstable state of the new "sick":
France and Italy. Both of these countries are not
very slow to ensure the reform,
which improves performance
and competitiveness of the economy in
European community. Significantly,
J.P.Morgan that raised the forecast
Spain's growth of 1.5%, reflecting the success of its
structural reforms, and at the same time
Italy reduced the forecast to 0%.
Signor Renzi, get busy!
Given the size of
Italy's economy and its scale
public debt (133% of GDP) -
lack of growth remains a major
threatened European stability
Community. To everyone's concern
many influential politicians and large
investors, the Italian prime minister Matteo
Renzi seems to spend most of
his enthusiasm for lobbying
changes in the rules of the euro area economy,
which would allow Italy to receive
all large loans. Although its direct
the challenge is very different - in
promoting reforms that could
would increase the country's growth prospects.
Took office
in February this year, Signor Renzi very
loudly announced an ambitious 100-day
program that "Italy will change."
The result was rather modest. reaching
not a single of these goals, the period
the program has been increased
ten times - up to 1000 days. The only
significant reform, which is now
It seems more or less achievable to
end of this year - restructuring
rules for selecting members of the National
Parliament. Here, it is clear even
layman: this is not the reform that
will lead the some economic
effects.
We have been promised
far-reaching reform of the state
administration, the judiciary,
government spending, labor market
- but the details have not yet been made public,
and the feeling that Signor Renzi still
He has not fully understand where exactly
he had to move. And while the rhetoric
Italian leader so much at odds
with its activities - investors should
preparing to attack much more
shaky times than it was yesterday, or even
Today.
Simon Nixon. Translation - Odillia.
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