Discover and read the best of Twitter Threads about #Eurozone

Most recents (24)

#Spain manufacturing PMI (Jul) 53.5 v 52.0 exp. (prev 49.0)

#Italy manufacturing PMI (Jul) 51.9 v 51.2 exp. (prev 47.5)

#France manufacturing PMI (Jul F) 52.4 v 52.0 exp. (flash est 52.0, Jun 52.3)

Read 6 tweets
A thread on how to fix the #Eurozone (and the #EU).

With the #RecoveryFund , the #EU has arrived to a pivotal point. Accepting the Fund would take us into a federation, while declining would, very likely, lead to euro-exits.

So, which option to choose? 1/20
The #EU was established to end the wars and create political stability and prosperity across Europe.

Before the creation of the euro, it looked to accomplish just that. Europe started to grow together.

Unfortunately, euro has now reversed basically all that progress. 2/
After the Global Financial Crisis, the euro became, not the symbol of prosperity, but a symbol of poverty and human suffering.

Many member countries are now poorer than before the euro and some, like Finland, have never recovered from the GFC.

Moreover,... 3/
Read 20 tweets
A financial crisis is probably the most feared economic event known to man.

I've done (mostly acad.) research on them for over 10 years.

As we are likely closing in on one, a thread on the anatomy of a financial crisis.

The #coronavirus is just a'trigger'.1/16
Financial crisis are born of some shock (smaller or larger) to the banking system.

The #coronavirus pandemic has been a rather massive trigger for a latent and overdue banking crisis.

If a banking system is sound and robust, it can usually withstand financial and... 2/
...economic shocks. But a banking system may be fragile.

Usually this is due to high leverage levels, where banks have either lent aggressively or carry risky financial investments on their balance sheets—usually both.

Banks can also have a weak financial position,... 3/
Read 16 tweets
I think it's time for this now.

A thread on leaving of the euro.

Over the years, I have turned to a full-blown euro-skeptic. If one figure could be used to describe my transformation, it would be this. 👇

Simply put, euro has been an economic menace. 1/24
But, how to leave from it?

As everything starts with the legal/political arguments, for the euro-exit, there are three:

1. National emergency
2. Other force majeure
3. A change or violation of the Acts of the Treaties and/or principles of the Eurozone.

In the case of a national emergency (wars, epidemics, econ crises), a country may temporarily bypass all treaties and pursue actions needed to overcome the emergency.

Other force majeure refer to events that are abnormal, unforeseeable and beyond the control... 3/
Read 25 tweets
#BREAKING ECB leaves key interest rates unchanged and vows to spend extra 600 bn euro on emergency bond buys
#BREAKING Eurozone economy to shrink 8.7% in 2020 before 2021 rebound: European Central Bank chief
#UPDATE Downgraded growth and inflation forecasts and uncertainty about the course of the #coronavirus pandemic has prompted the ECB to again pump up its support to the #eurozone, with 600 billion euros ($674 billion) more of emergency bond-buying
Read 3 tweets
#BREAKING Eurozone area inflation to drop to 0.1% in May from 0.3% in April: Eurostat
#UPDATE Inflation in the #eurozone single currency area dropped to 0.1% in May from 0.3% in April, the official Eurostat agency said on Friday, as the EU entered the sharpest recession in its history due to #coronavirus lockdowns
#BREAKING Brazil GDP contracted 1.5% in first quarter due to #coronavirus pandemic shutdown: govt
Read 7 tweets
Some initial thoughts on the EU’s recovery plan announced by the Commission today, which will be welcomed by most member states who are in need of short-term funding. First – AGAIN on the figures. 1/ #NextGenerationEU
THE AMOUNT: Commission President Von der Leyen said in her speech today the EU recovery plan totalled a sum of €2.4tn, including €1.85tn in new funds added to the ‘first response package’ of €540bn. Let’s break it down. 2/
The €1.85tn figure consists of €750bn of new funding for member states (MS), to be borrowed through a common instrument by the Commission in financial markets, with €500bn to be disbursed as “grants” and €250bn as loans 3/
Read 28 tweets
A thread, why the breakup of the #Eurozone is a near certainty.

The unfortunate fact is that the EZ has been an ill-conceived political project from the beginning.

And that's why it will fail. 1/21
@CNBCJulianna @iainmartin1 @GnSEconomics…
The key questions, the EZ now faces, are:

1) Will the ECB be able to provide support for sovereign bond markets through QE?
2) Will national authorities accept the terms associated with possible bailout loans?
3) Will national political leaders continue to support the euro?
The decision of Germany's Constitutional Court (CC) basically crushed all hopes of debt monetization and 'helicopter drops' of money in the EZ.

But, it did do more than that. In its statement, the CC ruled that: 3/…
Read 24 tweets
1/11: Before #Covid19 the #geopolitical system was shifting from globalism & multilateralism towards a big power stand-off between #US & #China. The pandemic is accelerating this trend, as all major players struggle to cope. A thread on this, with input from @AlexWhite1812..
2/11: #China, source of the outbreak, has taken a big hit. It suppressed information & numbers. The lockdown apparently worked but was harsh. China is now struggling to reverse a backlash in world opinion through propaganda, exploiting “first recoverer” status & US disarray..
3/11: The early #US federal response was incoherent & failed any test of international leadership. Trump has been awful. But the Fed moved far and fast & some states & cities have done well. Disproportionately high fatalities would damage American prestige...
Read 11 tweets
1/ Jahrhundert- Pandemie oder Jahrhundert-Evidenz-Fiasko?

Wir erleben drakonische Maßnahmen die in ihrer Reichweite einzigartig in der Geschichte sind.

In diesem Thread fasse ich Meinungen und Studien zusammen, die ein differenziertes Bild zeichnen sollen

2/ Disclaimer:
Ich bin weder Mediziner, Virologe noch Epidemiologe.
Ich übernehme keinerlei Garantie für die Richtigkeit der hier vorgestellten Meinungen und Einschätzungen.

Ich stelle lediglich Fragen, die zu selten gestellt werden.
3/ Die in diesem Thread zusammengefassten Meinungen stehen extrem konträr zu den Meinungen unserer Politiker.
Gegenstimme: @TiloJung Interview mit @Karl_Lauterbach

Beides anhören und eigene Meinung bilden! 😊

Read 80 tweets
@ecb Amount is very big. However the #ECB is very wishy-washy on what is currently crucial:
“For the purchases of public sector securities, the benchmark allocation across jurisdictions will continue to be the capital key of the national central banks” 1/
@ecb Meaning that they will continue to buy mainly German bonds, which is not needed, while not buying massively, over the 33% limit, Italian and Greek bonds, which are going astray since the misstep of #Lagarde last week
@ecb But at the same time:
“To the extent that some self-imposed limits might hamper action that the #ECB is required to take in order to fulfil its mandate, the Governing Council will consider revising them (etc)”
Meaning that they can change mind and focus on Italian & Greek bonds
Read 5 tweets
What does Lagarde’s comment that “We are not here to close spreads, there are other tools and other actors to deal with these issues” mean? Why are economists up in arms? A quick thread. #ECB #Eurozone #Covid_19 1/
These comments are seen to refer to the Outright Monetary Transactions Programme (OMT), which was part of former ECB President Mario Draghi’s pledge to do ‘whatever it takes’ to save the Eurozone. Under the #OMT, it was possible to purchase debt securities on the market. 2/
OMT would involve outright transactions in secondary sovereign bond markets aiming at “safeguarding an appropriate monetary policy transmission and the singleness of the monetary policy”. “Strict and effective conditionality” was required. 3/
Read 9 tweets
1/11 A thread on the #euro and why I think its existence is about to be tested.
2/11 #Europe is about to face a simultaneous endogenous & exogenous economic shock. The #COVID19 is creating multi-level disruptions, and the #EU will need to act swiftly to address them. However, history has shown that #EU's decision-making process is very rigid. #euro
3/11 Yesterday, the European Commission pledged 25bn to tackle the economic crisis caused by the #coronavirus outbreak. This amount is equal to ~0.15% of #EU's GDP. Hence, bolder moves will be needed to address the upcoming economic disruption. #euro…
Read 11 tweets
It seems like a good time to remind everyone, why we are heading into an economic crisis.

A thread on the fragility of the global #economy.

There, naturally, is no other place to start than this.👇 1/
@CNBCJulianna @KellyCNBC @SaraEisen @GeoffCutmore
Yet, everything begins from the GFC.

Like we noted in a blog published on the 10th anniversary of the failure of Lehman Brothers, very little has actually been fixed in the global financial system.👇 2/…
While the US banks are now bigger than before 2008 crisis, the biggest problems lay in Europe.

The European banks remained under-capitalized and filled with toxic assets, and the policies of the #ECB made everything worse. 👇 3/…
Read 14 tweets
🇰🇷 #SouthKorea's president calls for 'all possible measures' to help virus-hit economy - Reuters…
🇪🇺 #Eurozone ministers discuss fiscal boost options as virus worries weigh - Reuters…
Read 5 tweets
There are still stubborn misconceptions on the role of #China in the global #economy , especially what comes to 2019.

It should be acknowledged that China leveraging/deleveraging has been the single most important driver of the global business cycle. 👇

Thread. 1/
#China leveraging/deleveraging drives the #Eurozone and global economies with a lag of 3-4 mo.

In Q1 2019 China broke all previous records in the growth of debt, and the same occurred in Q3 (and likely also in Q4).

Thus, 2019 marked the end of the "China deleveraging". 👇
It's noteworthy that, when Beijing tried to deleverage in Q2 and in October, the economy tanked. This was quickly countered with another round of record-breaking stimulus.

Yet, economic growth has been sub-par all through the 2019 regardless of the massive stimulus. 3/
Read 10 tweets
I don't get, why many analysts and economists seem to think that the worse (#recession) might have been avoided.

Their view seems to be based on handful of 'leading' and/or backward looking indicators that have "stabilized".

This angle misses the point completely. 1/
Many seem to forget that #China, not the #Fed or the #ECB, has driven this global expansion.

China has accounted around 60% of all new money (debt) created and majority of capital investments produced since 2009. 👇

What is China doing now? 2/
If there's just one article an investor can read this fall, it's definitely this. 👇

It explains, why there's not going to be a similar reflation trade, like in 2015/2016, this time around.

China simply does not have the room to stimulate as much. 3/…
Read 8 tweets
Is the World on the brink of a new #Recession? Apparently it is.

With today's #DowJones Industrial Average fall of 800+ points, the market flashed a warning sign about a possible recession for the first time since 2007. Follows @jchatterleyCNN assessment.
Banks are paying people to borrow money. That’s alarming news for the global #economy.

A must read @washingtonpost article that explains in plain english and in detail the storm/tsunami ahead.… #recession2019
With Europe's main economic engine - #Germany, fully contracted, the #Eurozone industrial production continues to declined sharply raising tangible fears of a new #recession. #EuropeanUnion #recession2019…
Read 5 tweets
By the end of 2019, the #Eurozone Benchmark interest rates, i.e. the overnight #EONIA rate and the #EURIBOR family (with maturities from 1 week up to 12 months), will either be replaced or their calculation methodology will be radically reformed.
The benchmark rates calculation methodology is not compliant with the #EU Benchmarks Regulation (BMR), applied from Jan. 1st, 2018, which emerged in the aftermath of the #LIBOR & #EURIBOR market manipulation scandals & the #2008_financial_crisis.… @BIS_org
On September 14th, 2018, the working group on euro risk-free rates (#WG_EuroRFR), set up by the @ECB, the @FSMA_info , @ESMAComms & the @EU_Commission, proposed the ECB’s #€STR as the replacement of #EONIA
Read 12 tweets
For almost two years now, I've been randomly but constantly been drawn into discussions about the benefits of the euro.

The simple fact is that at the macro level, there are basically none. In the firm-level, especially in the SME -level, there are few. But, 1/
The question is, which should weigh more? The larger single-currency financial markets or a floating exchange rate that corresponds to the macroeconomic and political conditions of each country.

I think that answer, undeniably, is that the latter is more important. 2/
This is because global financial markets are very open and developed nowadays. Funding and hedging is widely available.

However, cutting wages and prices in a #recession has proven very difficult as it has been since the end of the 'liberal era' in early 1900's. 3/
Read 6 tweets
Today, @CDU and @CSU - still the most important veto player on #Eurozone reform - published their election manifesto for the EP elections. On EMU, no surprises:
1/ Lots of nos: No EZ finance minister. No unemployment insurance. No mutualization of debt nor, interestingly, of risks. No more bank bailouts. No tempering with @ecb independence. Interestingly, one explicit no is missing: Deposit insurance is not mentioned.
2/ On reform needs, it's rather slim: ESM should become an EMF, but unclear what that means in practice. Fiscal rules should become less discretionary and there should be a sovereign insolvency mechanism. Sovereign debt should get the same regulatory treatment as other assets.
Read 5 tweets
Today we release our annual @wiiw_news Autumn #Forecast Report, with macroeconomic projections for #CESEE out to 2020. Below, a thread on the highlights 1/13
#Growth still looks quite good for most, notable upgrades this time for #Poland, #Serbia, #Hungary. But downgrades for several #EU members, plus #Turkey, #Macedonia and #Belarus. 2/13
Over the #forecast period we expect best growth performance in #EUCEE and #WesternBalkans, although both will slow by 2020. Outlook for #CIS & #Ukraine weaker. 3/13
Read 14 tweets
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
*NBS spokesman Mao Shengyong said that the international situation was bringing “downward pressure” on China.
🇫🇷 🇪🇺 🇨🇳 French tire maker Michelin warned of declining sales in Europe and #China in the second half of the year, dragging down shares of its competitors in the U.S. and Europe - Bloomberg
🇺🇸🇨🇳🇪🇺 In a volley of filings, the EU, #China and the U.S. this week escalated disputes over new U.S. metals tariffs, the European response to those levies, and Chinese intellectual property practices - Bloomberg…
Read 634 tweets
#demographics #militaries #economies #currencies
- Best demographics
- Largest military
- Largest economy
- Most used currency
- Liquid financial markets
- Open capital account
- Rule of law
- Best geography
- Can be self sufficient if required
- Not trade dependent
Top trade partners as of 30 June 2018:
- China: 15.2% (strategic competitor)
- Canada: 15.1%
- Mexico: 14.6%
- Japan: 5.1%
- Germany: 4.4%

The next 10 years could result in the below:
- Mexico (25%)
- Canada (20%
- Japan (7%)
- South Korea (5%)
- Great Britain (4%)
Bring the manufacturing (jobs) home while negatively impacting China's economy.………
Read 338 tweets

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