It now looks as if there will be a bi-partisan deal later today in the US Senate,which extends the debt ceiling to early February and secures funding for the federal government until mid January. The Senate bill will need to be approved in the House before the deadline for the debt ceiling, so this will be a gun to the head of the House Republicans. – Danske Bank
Mrs Le Pen’s EMU withdrawal plan is based on a study by economists from l’École des Hautes Études in Paris led by Professor Jacques Sapir. It concludes that France, Italy, and Spain would all benefit from EMU-exit, restoring lost labour competitiveness at a stroke without years of depression. Their working assumption is that the eurozone’s North-South imbalances have already gone beyond the point of no return. Attempts to reverse this by deflation and wage cuts must entail mass unemployment and loss of the industrial core. – The Telegraph
Starting last Monday, I am posting only once per day. I will also skip
the “regular” link section, but you can access them from my Links-page. I want
to have more time to read what I link to – and write as well.
Previously on
MoreLiver’s:
EUROPE
Time to take bets on
Frexit and the French franc? – The
Telegraph
Ambrose Evans-Pritchard: A party committed to withdrawal from the euro,
the restoration of French franc, and the complete destruction of monetary union
has just defeated the establishment in the Brignoles run-off election.
As Nigel Farage
Warned: "In Two Months Of EU Membership, Croatian Exports Fall 11%" – ZH
“EU accession has exposed Croatia to greater international competition,
and the loss of privileges associated with the Central European Free Trade
Agreement (CEFTA).”
Analysis: Italy's
reform list reflects tough test for euro zone – Reuters
From its high labour taxes to its low literacy scores, Italy's
entrenched obstacles to growth point up the enduring failure of some euro zone
economies to adapt to the demands of life with no currency flexibility.
The IMF and the
legacy of the euro crisis – voxeu.org
Susan Schadler: The IMF loans to Greece, Ireland and Portugal are considered
controversial by some analysts. This column argues that these loans – granted
without having agreed on convincing paths to manageable debt levels –
constituted a substantial departure from IMF principles. The situation is
costly for Europe and, having now permanently changed the principles
guiding large IMF loans, it will be costly for crises to come. A serious
rethink of the management and decision-making structure of the IMF is needed.
BANKS
Europe prepares to
come clean on hidden bank losses – Reuters
Euro zone countries will consider on Monday how to pay for the repair of
their broken banks after health checks next year that are expected to uncover
problems that have festered since the financial crisis.
Euro zone countries are trying to find a way to pay for the repair of
their broken banks, testing governments' resolve to come clean on the problems
that have festered since the global financial crisis.
Spanish banks fear
new capital hit in European review – Reuters
Spanish banks are considering ways to boost their capital amid fears the
euro zone's imminent review of their balance sheets will force them to set
aside even more cash for potential losses on restructured loans, banking
sources in Madrid said.
Franco-German
divisions cloud efforts to fix broken banks – Reuters
The euro zone debated on Monday how to prop up banks likely to be
declared unstable next year, but France's blunt criticism of Germany before the
meeting laid bare the tensions surrounding the far-reaching financial reform.
Eurozone’s financial institutions more
fragmented than ever – FT
The intrinsic (intractable?) bank bid for
sovereign debt – alphaville
/ FT
Europe’s financial
institutions are more exposed to their domestic government bonds than at any
time since the eurozone crisis started. It has yet to be decided exactly how
the European Banking Authority’s stress test of about 150 banks next summer
will treat sovereign bond holdings. (Financial Times)
UNITED STATES
SHUTDOWN / DEBT CEILING
The Agreement: What
I'd like to see – The
Calculated Risk
It is sad, but predictable, that this shutdown and threat to not
"pay-the-bills" is happening now…In another year, the House will have
lost the short term deficit as an argument (actually for those paying
attention, the short term deficit is no longer a serious concern).
U.S. Default a Road
to Catastrophe – WSJ
Hitting the debt
ceiling would be terrible even if we didn’t default – WaPo
Market distortions in
the short end of the curve – Sober
Look
The Five Scenarios Of
A Debt Ceiling Breach – ZH
Senators Near Fiscal
Deal, but the House Is Uncertain – NYT
FED
Regional Fed Bosses
Struggle With Communication Issue – WSJ