Today, Parliament Street’s Director of Financial Services, Tim Focas was once again interviewed by the Daily Express, this time on the fundamentals of the Eurozone.
The interview can be found here.
Or alternatively you can read it below:
Eurozone WARNING: GDP ‘not resilient enough to ride next economic downturn’
Eurozone WARNING: GDP ‘not resilient enough to ride next economic downturn’
AN ECONOMIC downturn triggered by eurozone money supply issues could create a major headache for the European Central Bank, the leader of a top Westminster think tank has warned.
But the end of central banks buying or selling government bonds could have major repercussions for the maintenance of Italy’s debt as she heads for the polls.
Bond markets are facing an uncertain period as Italy, the main beneficiary of quantitative easing, could well elect an anti-euro alliance of the radical Five Star Movement and the Right-wing Lega Nord, after the Five Star took at 27 percent lead in the polls.
EU bank chief: It’s PAINFUL to lose UK who are strong partners
“Greater European centralised money-creation and political integration has left national governments weaker over the past decade.
“At the height of the 2011 Eurozone meltdown, the risk of defaults pushed government borrowing costs through the roof and added greatly to the financial stress of nations.”
The Daily Telegraph reported the sudden sell-off on Wall Street and across global bourses over recent days suggests that a liquidity squeeze is already underway.
Tim Congdon, from the Institute of International Monetary Research, told the newspaper “everybody knows that the nation being bailed out by QE is Italy, so this is a fundamental problem for the ECB”.
He said: “We are undoubtedly going to see a tapering of global growth in 2018 because of the actions already taken by central banks to reverse QE.
“I don’t expect a recession because central banks will have to change course once they see the numbers weakening.”
Mr Focas sounds a further warning to the EU’s continuing pursuit of full economic and political integration.
He said: “The ECB’s response has been to take a painkiller approach of cutting interest rates to near zero and the buying up of government bonds.
“The problem with this approach across a monetary blog is that it requires full alignment between economic and political institutions.
“If President Macron’s dream of a euro-area style government comes true, then event greater political and economic integration could be just around the corner.”