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Market-testing the euro area recovery

03 February 2016

Chris Scicluna
  • While the euro area economic recovery continues for now, heightened global financial market turmoil risks denting business and consumer confidence and hitting GDP growth.
  • Given the weakened inflation outlook the ECB will ease policy again in March. But whatever is announced seems unlikely to be transformative.

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Greece's threat of euro exit has cheated it of a recovery

04 June 2015

Grant Lewis
  • As the money runs out in Athens, signs are that the Greek Government is inching towards a last-minute deal.
  • But the damage done to the Greek economy during the negotiations has been immense.

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Grexit: Avoiding the slippery slope

30 April 2015

Robert Kuenzel
, 
Chris Scicluna
  • The Greek government’s reshuffle of its bailout negotiating team has raised hopes that a deal will be reached to avoid default and euro exit. And that remains our baseline scenario.
  • But not least due to difficult domestic politics and the amateurish nature of the government, the risk of a disorderly end to Greece’s membership of the euro remains significant.

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UK election: Political risks rising

24 April 2015

Grant Lewis
  • The fragmentation of British politics over recent years makes the outcome of the 7 May election more uncertain than for any since before the war.
  • No single party looks set to win sufficient seats to form a majority government, so some form of multi-party arrangement will be required. And negotiations are likely to take longer than the five days they took in 2010.
  • On balance, a Labour-led administration supported by the SNP and Lib Dems looks to be the most likely outcome. That may result in some near-term financial market volatility, while the post-election political landscape looks likely to be one of heightened political risks whichever of the two main parties leads the new government.

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Pfandbriefbank – not another Heta?

27 March 2015

Jakub Lichwa

A relatively low-profile entity in Austria – Pfandbriefbank Oesterreich AG (Pfandbriefbank) – is becoming the next critical chapter in the Austrian banking system story, as the reaction of the State of Carinthia to its obligations vis. Heta’s senior unsecured bond guarantees has sparked investor uncertainty about the broader guarantee framework in Austria.

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