Currencies

Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

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Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

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Banks

Barclays: life in the old dog yet

Barclays, a former basket case of British banking, is beginning to look inspiringly mediocre. The bank has failed Bank of England stress tests less resoundingly than Royal Bank of Scotland. Investors believe its assets are worth only 10 per cent less than their book value, judging from the share price. Although Barclays’s legal team have […]

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Currencies, Equities

Scary movie sequel beckons for eurozone markets

Just as horror movies can spook fright nerds more than they expect, so political risk is sparking heightened levels of anxiety among seasoned investors. Investors caught out by Brexit and Donald Trump are making better preparations for political risk in Europe, plotting a route to the exit door if the unfolding story of French, German […]

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Currencies

Dollar rises as markets turn eyes to Opec

European bourses are mirroring a tentative Asia session as the dollar continues to be supported by better US economic data and investors turn their attention to a meeting between Opec members. Sentiment is underpinned by US index futures suggesting the S&P 500 will gain 3 points to 2,207.3 when trading gets under way later in […]

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Categorized | Economy

Eurozone ready to flesh out Greek debt relief options – Dijsselbloem


Posted on November 29, 2016

Eurozone finance ministers are ready to further flesh out possible debt relief options for Greece once further progress in made in the latest review of its bailout programme, the president of Eurogroup has said.

Speaking in Brussels on Tuesday, Jeroen Dijsselbloem said he hoped a “staff level agreement” on the review would be completed by finance ministers’ next meeting on December 5.

“This would allow the Eurogroup to have a further discussion on the
short, medium, and long term debt measures needed,” he said.

Should the agreement on the review be reached in time,
December’s meeting will see ministers engage in intense negotiations
between the euro area and International Monetary Fund on whether the
IMF will join the €86bn bailout of Greece – a decision with major
implications when it comes to parliamentary support for the Greek
programme in Germany and some other euro area nations.

A key point to be resolved in those talks will be how long Greece will be expected to maintain the 3.5 per cent primary budget surplus target that the country is scheduled to hit in 2018.

“It will be one of the key debates,” said the Dutch finance minister, adding:

The IMF has argued that you cannot ask Greek to maintain that for a very long time, and others have said that, `well, it’s going to be necessary given the fact that Greece has to comply with the Stability and Growth Pact’.

So, in between those two we will need to find a realistic path forward, and I’m saying realistic because I think the IMF has a point that running a primary surplus of 3.5 for a very long time is a huge thing to ask.

A primary surplus measures the budget excluding debt repayments. The Eurogroup president added that he hoped the IMF would become “fully involved again” in the programme.

Mr Dijsselbloem also took a veiled swipe at a recommendation from the
European Commission that the euro area should aim for a fiscal stimulus equivalent to 0.5 per cent of GDP next year, pointing out that it runs counter to budget plans that governments have already agreed on with the EU.

The Commission made the recommendation earlier this month, as a way of putting pressure on countries in a strong budgetary position, such as Germany and the Netherlands, to do more to boost demand and stimulate growth.

“Some would argue that given the position where we are in the economic
cycle, where the output gap is closing, that in some countries it
would not be wise to stimulate further with fiscal policy,” he said.

Commission officials “need to realise” that governments are put in a
complicated situation if the institution’s guidance on the broader
fiscal stance clashes with EU budget rules intended to make sure
nations do not overspend, he said.