Some stagnant stats out of Eurostat on Tuesday….
Euro area unemployment rate at 12.1%
EU27 at 10.9%
Now that austerity-related political risk has reared its unhappy head in the eurozone, it’s worth pondering yet again the fiscal goals that the area aspires — well, sort of — to reach.
Last December, we posted some charts of Eurostat data (via MacroBusiness & Naked Capitalism) highlighting which eurozone countries would have exceeded the limits set in the new European Fiscal Compact – an offense that will be punishable by fines when* the treaty is adopted: Read more
It’s all about stock-flow adjustments, or SFAs — the curious cases when a government’s stock of debt increases without a corresponding change in its deficit to explain it.
Attached to its most recent release on EU debt and deficit numbers, Eurostat has penned quite an interesting note on how these SFAs work (while pointing out that SFAs “have legitimate accounting explanations”). Hat-tip the WSJ’s Charles Forelle. Read more
God, but Ireland must simply hate Eurostat. The pesky statistics agency keeps forcing it to recognise all of those expenses it would otherwise prefer to ignore.
And the agency is at it again. In a report released Monday Eurostat announced that Ireland was the proud owner of the biggest budget deficit in the euro area in 2011 – a deficit inflated by capital injections into the country’s broken banks. Read more
Annual inflation in the Eurozone increased to 3 per cent in September, according to a flash estimate by the European Union’s statistics office, Eurostat. Economists had expected a reading of 2.5 per cent, the same as August, reports Bloomberg. The sudden increase is the fastest acceleration in almost three years. The release from Eurostat also showed that unemployment in the 27-nation block held steady at 10 per cent in August, reports Reuters.
Greece’s currency swaps with Goldman Sachs may have slipped your memory.
Luckily Eurostat, in a just-published review of its methodological visits to Greece in 2010, has a quick reminder. More importantly, it’s kind of the European statistic agency’s final word on the matter: Read more
Fresh from Eurostat, the future of the EFSF.
At least, in terms of the way it’s accounted for in Europe’s national accounts. The statistics body figures that funds raised by the European Financial Stability Facility (EFSF) will have to be recorded in the gross government debt figures of the eurozone states which guarantee it, and according to the size of their guarantee. Read more
If you were honestly shocked that Greece’s legendary — in both senses of the word — 2009 budget deficit was revised higher once again at its final estimate, you probably haven’t been following Greek debt for very long.
Sure, there’s plenty hanging on the new number of 15.4 per cent of GDP (compared to the last estimate of 13.6 per cent), such as the well-known fears that this’ll put the 2010 and 2011 deficit reforms further behind. Read more
The recent sort-of-controversial study by Reinhart and Rogoff, which found that economic growth slows considerably when public debt exceeds 90 per cent of GDP, could soon get an interesting European test case.
BNP Paribas included this factoid in one of their recent credit portfolio strategy notes (emphasis ours): Read more
Painful numbers out from Eurostat on European fiscal deficits on Thursday: the statistics agency revised Greece’s fiscal deficit upwards by a full percentage point and cast doubt on the quality of data provided by the Hellenic Republic.
Not the best mood music for a Greek debt rescue, then. Read more
The cost of insuring Greek and Portuguese bonds against default jumped to new record highs on Thursday, as fears linked to the Hellenic Republic’s use of a potential aid package grew on an upward revision in government deficit data. Greek five-year CDS rose to 518.5 basis points, from a close of 485.7 basis points on Wednesday, while Portugal’s hit 248 basis points, its widest ever. The Greek/German 10-year government bond yield spread, meanwhile, jumped to a fresh 12-year high of 535 basis points. Official European Union statistics showed that the Greek budget deficit rose to 13.6 per cent of GDP in 2009, almost a full percentage more than the government had projected. For more on the story go to FT Alphaville.
As Reuters reported on Wednesday:
The euro zone’s 10 percent jobless rate in February was the highest since August 1998 and in line with market expectations. A month earlier unemployment was at 9.9 percent. The figure pointed to only subdued recovery from the worst economic crisis in decades, with high unemployment curbing consumer spending that is key to reviving economic growth. Sluggish private demand also keeps the lid on price growth.
Goldman’s been getting plenty of heat over the currency swap it arranged for Greece.
But the swap itself is not the only issue here. Securitisation also plays a factor and it seems Titlos — the special purpose vehicle (SPV) created to securitise the swap — is not the only Greek debt-concealing securitisation deal undertaken by the Hellenic Republic. Read more
Eurostat, the European statistical agency, has maintained something of a difficult-to-swallow position regarding its knowledge — or supposed lack thereof — of Greece’s use of Goldman Sachs and the currency swap market to burnish its books.
Various public statements by the agency suggest officials there had absolutely no idea — not even the slightest inkling — of Greece’s actions. Read more
Wall Street’s role in the unfolding Greek debt crisis will be probed by Eurostat, the EU’s statistical office, which has requested information from Athens about currency swaps. The transactions, undertaken from 2001 to 2008, may have allowed the Greek government to conceal billions of euros of new debt from regulators. Goldman Sachs, Morgan Stanley, Deutsche Bank and other investment banks arranged complex transactions that enabled Athens to raise cash for budget spending without having to classify as public debt.
Something tells us the story of Greece’s €1bn currency swap — and particularly the involvement of a bank everyone loves to hate, Goldman Sachs — is going to run and run.