Well Sweden has just put the cat among the pigeons. Taking advantage of its ability to apply an independent monetary policy, the Riksbank has decided to cut its base lending rate from 2.0% to 1.5%. The reason why is not hard to discern, apart from the reduced growth forecast for this year, the inflation [...]

Italy is in recession. There is nothing extraordinary about this, as Donald Rumsfeld notoriously said ’stuff happens’, and economies do have their ups and downs. But this recession is a little different, since it is structural and not cyclical. For the Italian economy to return to a better trajectory something has to be done, but [...]

There is a very interesting article in todays Financial Times. For the first time an executive board member of the ECB - Lucas Papademos - has spoken openly about the difficulties presented by having a single monetary policy for such a diverse set of economies. In fact these comments take on more significance in the [...]

I don’t like saying ‘I told you so’, but if you can spare the time to go through some of my posts, the ‘reading the tealeaves’ rate hasn’t been too bad lately. First there is the question of ECB rates, they need to come down. I started indicating this at the time [...]

I think one of the topics for next years election in Italy is just being decided. Romano Prodi (former President of the EU Commission) has just spoken out against Sinascalco. He is in favour of making cuts. Prodi is quoted as saying that:

“Credit downgrades will follow if there is not quick action in fixing the [...]

Roberto Maroni is back in the Italian press again today, and with another interview. This interview is in ilResto del Carlino. (Interestingly enough they are running an online poll, and the result was running at 51.7% euro to 48.3% lira). Unfortunately the interview is in Italian. I have translated a few extracts under the [...]

Well this clears up one niggling little doubt about last weeks ECB meeting. Remember my post - when no means maybe - about how Trichet saying ?I am not telling you anything that could be interpreted as preparing a rate cut,? was actually double talk, and what he meant was I am not telling you [...]

Many readers have been asking about the mechanics of any hypothetical ‘euro’ break-up, or indeed of what might happen if one country were to leave. Up to now, we have been told this is impossible, but clearly it is possible, and, however remote the possibility may seem (the order of 5% risk is the topical [...]

The euro. Hamish McRae talks a lot of sense in the Independent today:
“So was the euro a terrible mistake? Will Germany, Italy and France go back to the mark, the lira and the franc? A string of stories have hit the streets hinting that this may be the outcome following the failure of France and [...]

Here’s the FT’s reading of the situation.
Note this extract: “As financial markets digested the remarks of Roberto Maroni, Italy’s welfare minister, the interest rate differential between Italian and German bonds rose to 23 basis points, the widest spread since November 2002.”
These are the numbers we will be following at Afoe moving forward. Maroni is [...]