Browsing all articles tagged with Nick Matthews

Record Unemployment Low Inflation Highlight Europe’s Pain

Unemployment has reached a new high in the euro zone and inflation remains well beneath the European Central Bank’s target, pacing pressure on EU leaders and the ECB for action to stimulate the bloc’s sickly economy.

Joblessness in the 17 nation currency area climbed to 12.2 percent in April, EU statistics office Eurostat stated on Friday spoting a new record since the data series began in 1995.

With the euro zone in its greatest recession since its creation in 1999, consumer price inflation was far lower the ECB’s target of just below 2 percent, coming in at 1.4 percent in May slightly higher then April’s 1.2 percent rate.

That augment may quieten concerns regarding deflation, however the deepening unemployment crisis is a threat to the social fabric of the euro zone. Almost two-thirds of young Greeks are not capable to find work exemplifying southern Europe’s lost generation.

Policymakers and economists including Germany’s finance minister Wolfgang Schaeuble have stated the greatest menace to the unity of the euro zone is now social collapse from the crisis, rather than market-driven factors.

In France, Europe’s second biggest economy, the number of jobless rose to a record in April while in Italy the unemployment rate hit its highest level in at least 36 years, with 40 percent of young people out of work.

Thousands of demonstrators from the anti-capitalist Blockupy movement cut off access to the ECB in Frankfurt on Friday to protest against policymakers handling of Europe’s debt crisis.

Some economists suppose the ECB, which meets on June 6 will have to go beyond an additional interest rate cut and consider a US style money printing program to breathe life into the economy.

Nick Matthews, a senior economist at Nomura International in London said we do not expect a strong recovery in the euro zone. It puts pressure on the ECB to deliver even more conventional and non conventional measures.


European Central Bank State Banks To Repay Less Than Forecast of Second Loan

ECB stated banks will pay back only half the quantity of emergency loans economists predicted, signifying financial institutions remains cautious of lending to each other.

Central bank stated in today’s statement that total 356 banks will return 61.1 billion euros which is equal to $80.5 billion of the ECB’s second three year loan on Feb. 27, the first chance for early refund.

Jan von Gerich, chief fixed income analyst at Nordea Bank AB in Helsinki said that expectations following the initial repayment of the first loan became inflated, the current number illustrates much improved how the banking sector is doing. They are seeing improvements however it is a slow procedure.

Ewald Nowotny, committee member told reporters in Riga that today ECB expected quite a substantial number, Executive Board member Benoit Coeure, remarks following the number was published.

The ECB stated nine banks will pay back a additional 1.7 billion euros from the first three year Longer Term Refinancing Operation subsequent week. That takes the total quantity of funds pay off early to 212.3 billion euros, or 21 percent of the generally amount lent. Banks can persist to repay the loans over next weeks.

Nick Matthews, senior economist at Nomura International Plc in London said that ECB will appropriate the repayment as long as banks make it for the right reasons. If banks are comfortable that they do not require the money anymore or can get funding in the market, it’s alright. The final thing you desire, while, is to observe banks rushing to repay only to get into trouble as they don’t have their funding in place.