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Wednesday, September 12

12th Sep - US Close: Eurozone 2.0

Posting early, updating after US Close. What a day: German court gives thumbs up to the "Eurozone 2.0", while Barroso gives a speech on moving towards a full union. This is explicitly and implicitly something we were promised would never happen. Inch by inch, slowly, but surely.

Germany's policy seems to be avoiding doing things in open, in order not to alienate voters. The bad thing is that the solutions become less open for criticism and control. Soon everyone will be unelected, immune from prosecution and perhaps later fully anonymous.

Oh well...


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Previously on MoreLiver’s:

Roundups and Commentary
Markets – Between The Hedges
The Closer – alphaville / FT

German Court Decision and Data Extend Risk-On Rally – Marc to Market
European Summary – ZH
  European Stocks End Green (But Leaking) As Sovereigns Stagnate
US Summary – ZH
Tomorrow’s Tape – MarketBeat / WSJ
  Conclusion of the Fed's two-day meeting, QE to follow
Morning Briefing (Asia): What is the Fed to do? – BNY Mellon
  Euro-area crisis? Tomorrow’s FOMC meeting is the market’s bellwether

Reference
TV: Bloomberg, BBC
Debt crisis: live – The Telegraph
The Euro Crisis Blog – WSJ
Tracking Europe’s Debt Crisis – NYT
FX Options Analytics – Saxo Bank
European 10yr Yields and Spreads – MTS indices

EUROPE
The Evolving Euro – EconoMonitor
it is clear that Eurozone 2.0 will not be launched for several more years. The president of the European Commission in his recent State of the Union address admitted that completion of the new design would require changes in the EU treaties.

Eurozone building blocks are falling into place – Gavyn Davies / FT
The ESM and the fiscal compact can now be safely launched, and any immediate obstacle to Mario Draghi’s bond buying plan at the ECB has disappeared…there may be limits to the willingness of the German political system to make the cross-border transfers which are inherent in the ESM/ECB support operations, especially if the troubled economies, following the example of Greece, fail to stick to the necessary policy conditions

Let’s not be afraid of… banking union – alphaville / FT
JPMorgan’s Alex White has taken a stab at some of the current problems:
 
State of the Union 2012 Address – europa.eu
Barroso, President of the European Commission 12-Sep (Finnish version here)

EU treaty change: Nowhere to run, nowhere to hide… – Open Europe
Barroso was explicit: this crisis is the perfect time to take the next great leap towards a federal Europe.

Catalan region renews call for independence – euobserver
One and a half million people gathered in Barcelona on Tuesday demanding independence from Spain. It was the biggest self-rule rally ever in Catalonia.

Ray Dalio: Southern Europe Is About to Enter a ‘Lost Decade’ – MarketBeat / WSJ
Southern European countries are in the early stages of a major deleveraging that will produce a Depression-like environment, Dalio said.

GERMAN COURT APPROVES ESM
German court approves new plan to save Europe. But is it a good plan? – Wonkblog / WP
So, instead, Europe’s leaders have devised a compromise plan that’s supposed to quell the immediate financial panic, bring down leaping bond yields, and at the same time placate German voters who are tired of bailing out their neighbors.

Burying a banking licence – alphaville / FT
the court adds more legal flesh to the argument against the ESM tapping the ECB — interestingly through delving into the ESM treaty text itself. Most interestingly of all, it does so in a way that suggests the treaty really is badly drafted ambiguous to interpet on key points.

German ruling could be turning point for debt crisis – Danske Bank (pdf)
The ball is now in Spain’s and Italy’s courts. If they deliver the planned fiscal tightening and structural reforms, the debt crisis could end in a couple of years. At that stage we might look back at the late summer of 2012 and conclude that this was turning point.

Karlsruhe plays it safe – presseurop
The verdict came as no surprise: Germany's constitutional court has green-lighted the European Stability Mechanism (the ESM) and so given the euro a future. But the condition attached is that any increase to the bailout fund must meet with German approval. Initial reactions from the German press.

What will the German Constitutional Court ruling mean for the eurozone? – Open Europe
This decision merely referred to the question of whether to grant a temporary injunction against the ESM. The full ruling on the complaints is expected in early 2013. However, since the law can now be finalised, and as an international treaty may be difficult to reverse, many expect the final ruling to be along the same lines.

Text Of German Constitutional Court Judgment – ZH

In Victory for Merkel, German Court Backs Euro Rescue Fund – NYT
 
Sighs of relief as German court approves bailout fund – euobserver

Eurozone | Karlsruhe plays it safe – presseurop

German Court Approves ESM While Ruling "No Unlimited Liability, Parliament Must Approve Changes in Ceiling"; Sigh of Relief Reaction – Mish’s

USA
More Fed QE: done deal or Pavlovian response? – MacroScope / Reuters

Great Graphic: Euro, Yen and S&P with QE – Marc to Market

Don't expect much from the Fed tomorrow – Free exchange / The Economist
 
IN FINNISH
Euro & talous 4/2012: Rahapolitiikka ja taloudellinen tilanne – Suomen Pankki
Pääjohtaja Liikanen: Kansainvälisen talouden näkymät vaisut, rahapolitiikan välittyminen turvattava * Hanna Freystätter: Asuntojen hintakuplan puhkeaminen ja Espanjan talouspoliittiset haasteet * Juha Kilponen: Finanssipolitiikan syklisyys ja valtionlainojen riskilisä * Heli Simola: Miten nousevat taloudet ovat muuttaneet globaaleja hintatrendejä?

1 800 000 000 €:n hanke: Tämä on Suomen ja Viron ero – Uusi Suomi
Kun terveydenhoitopiirit etenevät asiassa eri tahtiin, eikö vaarana ole, että Suomeen syntyy jälleen useita rinnakkaisia, erilaisia järjestelmiä, Antti Kivelä? –Kyllä se riski on olemassa ja se on jopa todennäköistä, jos kunnat eivät tee yhteenliittymiä. Maanlaajuinen hankintarinki ei ole todennäköinen, Kivelä sanoo.

Apotti-hanke saa maksaa tietotekniikan vanhoista synneistä – HS
Epäonnistumisten lista on lähes loputon...Ja usein julkisen sektorin kumppanina on tanssahdellut sama veljeskolmikko: Tieto, Logica ja Accenture.

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