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’Hungary — “the Commission remains preoccupied…”
Making an extraordinary story of bailout conditionality even more extraordinary…
The European Commission warned the Hungarian government on Wednesday that it’s ready to go to the European Court of Justice to argue that a new constitution violates EU law.
A sub-optimal solution to the Euromess [updated]
Policy changes the ECB announced last week will help banks directly and governments indirectly. But the EU fell short on every element of a comprehensive deal. On Friday, investors reacted positively to what was sold to them as a “fiscal compact”.
The gap between summit rhetoric and reality
Judging by markets’ immediate responses to the EU summit, Gavyn Davies’ summary of the new reality seems spot on:
My initial take on the deal is that it will be sufficient to dampen the acute phase of the crisis,
Quotes du jour – Eurofudge edition
For those of us of a certain age, the fiscal language looks to be copied and pasted from the original Stability and Growth Pact with a few bells and whistles added to imply that ‘this time we mean it.’ - Steven Englander,
A fresh (IMF) sovereign contingent liability
Here’s a story that seems to have sneaked past undetected last Friday (albeit understandably).
It’s the final ratification of the IMF’s New Borrowing Arrangements (NAB) deal, complete with fresh details of exactly who is participating and on what terms.
An update on NAMA
The National Asset Management Agency update from the Irish government is out and…
Well, we wouldn’t want to deprive you of the gory details so here they are (our emphasis):
The Chairman of the National Asset Management Agency [NAMA],
Irish exposure, charted
Courtesy of BNP Paribas, just who is exposed to Ireland and by how much:
Something which might come in handy as conditions for this weekend’s €80-90bn bailout are eked out.
Thou shalt not bluff
As all eyes focus on what should be done about the Irish banking crisis, perhaps it’s time for the European Union, IMF and other related parties to take a closer look at some of the factors that may have exacerbated the problem.
Just what is Hungary up to?
Adventures in debt management, Hungarian change-the-rules edition.
The Hungarian economic ministry made this odd little statement on Tuesday (translated from the Hungarian via Google, so be warned):
So what happened to Switzerland’s Greek bonds?
Beady-eyed readers have pointed out that the Speigel chart we posted earlier does not accurately reflect Swiss holdings of Greek bonds — which dropped significantly over the course of 2009 according to SNB data.
CDS report: European (dis)Union
British europhobes love to portray the European Union as an evil bureaucracy, intent on creating a voracious super-state. There is no denying the club has expanded in recent years. The total membership is now 27 countries and,
FT Alphaville’s Greekbailout-o-meter says…
Ah-ugh! (click for sound effect.)
An unnerving glitch appears to have sprung up in FT Alphaville’s newly-launched Greekbailout-0-meter.
Thursday’s reading below read decidedly upwards towards ‘IMF,
Quote du jour, Greek huff edition
From Greek Prime Minister George Papandreou on Thursday, via Reuters:
GREEK PM SAYS WE WILL NOT ASK FOR FINANCIAL HELP FROM EU OR IMF
Or rather: “Fine then! We’ll just do it ourselves.”
Related links:
Fawlty Europe
As a well known European (anglo-centric) joke goes:
Heaven is a place where the police are English; the chefs are Italian; the car mechanics are German; the lovers are French and it’s all organized by the Swiss.
Germany’s export decision
Following news on Thursday that the European Union will support Greece in its fiscal hour of need, it’s still the case that the cost of euro-peripheral bailouts will have to be borne by someone.
For the time being in Europe that means the community’s most productive members,
Does Europe need a carbon central bank?
The annual Lord Mayor’s City Debate took place in London’s Mansion House on Monday evening, with FT Alphaville in attendance. (Many thanks to the Chicago Mercantile Exchange for the invitation.)
The motion put forward to financiers:
How do you say ‘Notice’ in Greek?
Mark Wednesday in your European Sovereign Struggle calendars.
For that’s the day, February 3, that the European Commission is expected to publish its review of Greece’s Stability Programme. EU members are required to submit these programmes to the Commission every January for review,
The trials of Papaconstantinou
While Greece may have side-stepped immediate funding catastrophe with its successfully placed five-year bond issue, that’s not to say there aren’t further trials for the sovereign issuer down the road.
That lack of Greek contagion
Courtesy of Deutsche Bank’s fixed income team, a reminder of the extent to which risk is being priced into Greek government debt, as measured by the spread between Hellenic Republic bonds and German bunds:
Sprεαding…
Dramatic developments in the European government bond market, where the spread between the Greek 10-year and German bunds widened to over 300bps on Thursday — the highest level since the Hellenic Republic joined the eurozone:
Dear EU, your invoice is in the post
A message from the Greek Finance Minister (via Reuters):
GREEK FINMIN SAYS STATS SERVICE WILL BE MADE FULLY INDEPENDENT, BILL SENT TO EU
Related links:
Greece condemned for falsifying data – FT
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A drachma-tization
Could Greece be forced out of the euro zone – or for that matter the EU – as a result of its fiscal delinquency?
As we reported last week, it’s a matter recently taken up in an EU paper entitled “Withdrawal and Expulsion from the EU and EMU:
A secessionist recession for EU peripherals?
This paper examines the issues of secession and expulsion from the European Union (EU) and Economic and Monetary Union (EMU). It concludes that negotiated withdrawal from the EU would not be legally impossible even prior to the ratification of the Lisbon Treaty .
Latvia preparing for devaluation?
On Tuesday, we reported that Latvia’s government was taking legislative steps to change the sums lenders could collect on outstanding mortgages to better reflect the current market value of the properties.
Defcon Latvia, Swedish krona edition
Another day, another Latvia development.
Although, as Danske Bank note, it’s getting harder to determine what’s really going on the ground. From their report on Tuesday:
Most recently, it seems Latvia’s prime minister has decided to change the sums lenders can collect on outstanding mortgages to better reflect the current market value of the properties.