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New data from the ECB strengthen the case for a rate cut as loans in the eurozone private sector...

New data from the ECB strengthen the case for a rate cut as loans in the eurozone private sector fell 0.8% Y/Y in March. Maybe a bit of light - lending to nonfinancial firms rose for the first time since July, but the small increase followed huge declines in January and February. Separately, Pimco's Rich Clarida says the ECB will indeed cut rates next week. The euro (FXE) is flat, continuing its tight range over the past few days.
Comments (2)
  • The problems in the EU solvency are not going to improve until Germany and France own-up to the need to issue massive debt to bail out four southern economies that are politically incapable of fiscal management. (France is also incapable but its size demands concessions and Germany needs the support).

     

    This likely requires a new political union in which sovereignty and fiscal policy is ceded to a central government probably dominated by Germany. How likely is that?
    26 Apr 2013, 08:45 AM Reply Like
  • Or when those four southern economies are cut free, return to their own currencies, default, and slowly begin to rebuild. Also unlikely, but it certainly seems that one of those two things has to happen.
    26 Apr 2013, 09:55 AM Reply Like
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