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03 September 2015

Brexit 'Weekly'

August and first days of September's highlights featured news from CMU, European Commission, ESM, Greece, ESM and EFSM, the future of the eurozone, ECB, Chinese crisis and many more.

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Graham's Articles, Comments & Speeches



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  Articles from 30 July 2015 - 03 September 2015

  Grahams Articles, Comments & Speeches
What is CMU?
What is CMU and what is it intended to achieve?  View Article
Commission signs three-year ESM stability support programme for Greece
The European Commission signed the Memorandum of Understanding with Greece for a new stability support programme.  View Article
Eurogroup statement on the ESM programme for Greece
The Eurogroup welcomes the agreement that has been reached between Greece and the European Institutions, with input from the IMF, on the policy conditionality underlying the new ESM macroeconomic adjustment programme.   View Article
European Council: Remarks by J. Dijsselbloem following the Eurogroup meeting
(14 August) Eurogroup president explained the terms of the ESM programme for Greece, stating that its full amount is of €86bn and that debt sustainability can be achieved through a reform programme, which will assure further financial support from the IMF.  View Article
Reuters: Greece deal leaves euro intact but fragile
With Greece close to getting a new bailout, the eurozone at least looks more robust than it did. The risk is less about the exit of a peripheral state, and more about the economic rifts between core members.  View Article
CEPS: Greece’s poor growth prospects
With the third rescue package dealing with the immediate liquidity issues in the works, and concerns being voiced by the IMF as well as other actors, Greece would face strong headwinds in its effort to ‘grow solvent’.   View Article
VoxEU: Greek debt sustainability - The devil is in the tails
Greek debt is highly unsustainable, but sustainability can be restored with a nominal haircut of 50%, interest rate concessions of 70%, or a rescheduling of debt to a weighted average maturity of 20 years. Greece and its creditors should ‘bet on the future’ and embrace debt relief.  View Article
VoxEU: Back from the brink - Policy reform and debt relief in Greece
This column takes through the details of Greek debt, what relief options are open to Greece, and what the likely consequences of relief might be for all parties.  View Article
Bruegel: Greece’s debt burden can and must be lightened within the Euro
There will be no confidence and no growth in Greece without a solution to the debt problem. The authors suggest tying the interest rates on the loans to the growth rate of the Greek economy, together with a conditional debt moratorium.  View Article
VoxEU: Iceland, Greece and political hectoring
In Iceland and in Greece the heavy pressure from foreign countries and the hectoring from their public officials was counterproductive during the crisis, hardening the opposition to any settlement.   View Article
Financial Times: Democracy at the heart of fight for Greece
The Greek referendum was a test case of the euro itself. Monetary union and democracy are not incompatible, but European policy is premised on the opposite view. Without a change in approach, it must lead to failure.  View Article
Bertelsmann Stiftung: Money or Democracy? Greece and the Euro Dilemma
The negotiations on the third bailout package for Greece are still going on, but the euro area has already paid a high price for it. What in fact is Greece actually supposed to be doing, and what does all this mean with regard to sovereignty and democracy?  View Article
The Guardian: Left-wing Eurosceptics are wrong to use Greece as a reason to leave the EU
If the perception that Greece has been bullied into accepting austerity by other eurozone countries, led by Germany, takes root, it could have severe consequences for Britain's EU membership.  View Article
Open Europe: A second bridge loan for Greece on the horizon
With little clear progression in the negotiations between Greece and its creditors it is looking increasingly likely that a second bridge loan could be needed.  View Article
CEPS: Addressing the immediate needs of the Greek banks
The Greek banking sector unquestionably needs an infusion of capital, but the level largely depends on the stringency of the capital requirements applied.  View Article
VoxEU: Lessons from Cyprus that did not make it to Greece
This column examines the lessons that could have been drawn from the Cypriot experience by Greece in its recent attempt to seal a bailout deal. Specifically, lengthy negotiations offer little benefit for debtor countries, and capital controls, once implemented, cannot be easily undone.  View Article
Peterson Institute: A Greek Election that Should Strengthen Tsipras’s Hand
Greek voters will be going to the polls on September, this time to elect a new Parliament in the wake of the €86 billion bailout accord with European creditors. But the most likely outcome for this election will be to strengthen Tsipras’s hand in carrying out the tough terms of the bailout.   View Article
CEPS: Why Greece declined a euro holiday
Why did the Greek government concede to terms that not only controverted its own promises, but also closely resembled those that voters had overwhelmingly rejected in a popular referendum barely a week earlier? The answer may be more political than economic.  View Article
Bruegel: Wolfgang Schäuble, Debt Relief, and the Future of the Eurozone
The German Finance Minister Wolfgang Schäuble says Greece cannot receive debt relief from European creditors because they are forbidden by European treaties to grant relief. But this cannot be true: Once a loan has been made, any lender exposes himself to a default risk.  View Article
Financial Times: Berlin must lead Europe towards closer union
The crisis is not just about the right level of sales taxes on islands in the Aegean, Germans’ capacity for empathy, or even the future of the euro. It is about the future of European integration itself — and of German leadership in Europe.   View Article
Financial Times: European federalism is not dead yet
It may be premature to write the obituary of European federalism just yet. If it is to happen at all, further integration will be driven by economic necessity.  View Article
Reuters: Eurozone doesn’t need political union
France’s President Francois Hollande has called for a eurozone government, with its own budget, which would be accountable to the people via a new eurozone parliament. But such an ambitious centralisation of economic power is neither needed nor desirable. Nor is it politically achievable.  View Article
EurActiv: Towards a European Commission with fewer competencies for more power?
Turning the Commission into an elected and accountable European government would both legitimise the institution in the eyes of the citizens and take some powers out of the executive’s hands.  View Article
Open Europe: How does the UK vision for EU reform fit with the Eurozone’s challenges?
The Eurozone should use the UK agenda as an opportunity to address the need for more flexibility, economic competitiveness and democratic accountability.  View Article
European Parliament: Smart Single Market regulation
This study proposes a consolidated governance system that would serve as a tool for smart Single Market regulation toward 2020 and beyond.   View Article
ECB publishes Guideline amending the General Documentation on monetary policy implementation
Counterparty eligibility assessment will take into account information on capital, leverage and liquidity ratios. The document also added a new category of assets as eligible collateral.  View Article
ECB working paper: The real effects of credit constraints - evidence from discouraged borrowers in the euro area
This paper investigates the characteristics and behaviour of discouraged borrowers in the euro area. The results show that more borrowers are discouraged when the average interest rate charged by banks in a country is higher. Higher corporate tax rates, on the opposite, lead to lower discouragement.  View Article
CEP: A sovereign default regime for the euro area
By introducing a sovereign default regime in the eurozone, its member states would be once again allowed to make their own decisions regarding timing, type and scope of reforms.   View Article
Financial Times: EU warned not to let CMU hurt role of banks
A senior German banker has warned that the EU’s efforts to build a capital markets union should not be seen as a way of reducing the role of bank lending in funding the region’s companies.  View Article
Financial Times: Central bank monetary arsenal is increasingly ineffective
Several signs suggest loose monetary policy is increasingly proving ineffective, and central banks are failing to generate enough cyclical upswing to win against the structural forces constraining growth and inflation.   View Article
Reuters: National laws hamper ECB's work as single supervisor
Diverging national laws on banking supervision are hampering the European Central Bank's work as single supervisor of the euro zone's largest lenders and the rules need to be harmonized.  View Article
TheCityUK: Chief Executive's Insight
TheCityUK launched two special reports in July, aimed at reforming the EU for strengthening UK's membership and at how Europe’s listings regime could be improved to help achieve the Capital Markets Union initiative.  View Article
VoxEU: Estimating the financing gap of small and medium-sized enterprises
The financing gap in several European countries' small and medium-sized enterprises is three to five times larger than that of US SMEs. Initiatives under the Capital Markets Union umbrella can help to reduce this financing gap.  View Article
EurActiv: Standard & Poor’s lowers outlook on the EU to negative
The Credit Ratings Agency has changed the outlook for the European Union from stable to negative after the bloc's support for Greece and following Britain's decision to vote on leaving the EU.  View Article
ECB: Understanding Inflation Dynamics and Monetary Policy
In his speech, ECB's vice president Constâncio discusses main challenges in understanding inflation dynamics. He reviews recent developments in euro area inflation and related implications for monetary policy.  View Article
ECB: Drawing lessons from the crisis for the future of the euro area
In his speech, ECB's Cœuré explains the two key lessons drawn from the European crisis: the people of Europe are truly attached to the single currency; and our institutional framework is not yet sufficient to complete Economic and Monetary Union.  View Article
ECB: Account of the monetary policy meeting of the Governing Council
This document includes a review of financial, economic and monetary developments and policy options, as well as the Governing Council’s discussion and monetary policy decisions that took place in Frankfurt am Main on 15-16 July.   View Article
ECB: Assessing the new phase of unconventional monetary policy at the ECB
In his speech, the European Central Bank's Constâncio explains some key features of the monetary policy measures recently implemented by the ECB such as the Quantitative Easing, together with a programme of targeted liquidity provision and a programme of private sector asset purchases.  View Article
ECB: Working Paper Series - Sovereign risk, interbank freezes, and aggregate fluctuation
This European Central Bank paper studies the interaction of sovereign default risk with the banking sector. Authors present a model with strategic default on public debt in which sovereign risk adversely affects funding conditions of banks on the interbank market.  View Article
ECB: Interview of Benoît Cœuré
The main highlights were Greece's third bailout programme, the stability of the euro area after fears of a Grexit, low inflation, the US interest rate rise, and worries over Chinese economy.  View Article
Financial Times: Weak eurozone data underline fragile recovery
Disappointing eurozone numbers released by the European Central Bank demonstrate the fragility of the region’s recovery despite a cocktail of cheap oil, a weaker euro and mass bond-buying.  View Article
Forbes: How exposed Is Europe to a Chinese economic slowdown?
The huge falls in the Chinese stock market are already affecting international markets, but what could be the consequences to a still fragile European economy in the event of a serious slowdown in China?  View Article
Financial Times: Asia is a bigger problem for Europe than the US
China’s market rumbles highlight the limits of a more aggressive ECB.  View Article
Bruegel: The dragon sneezes, Europe catches a cold
European stock prices, financial contagion and the trade exposure to China. How the turmoil in China’s stock market is affecting European stock markets through Europe's trade exposure to China.  View Article
VoxEU: The state of the monetary union
Findings of this column include: the difference in labour market performance between the US and Europe is one of degree; the economic consequences of the sovereign debt crisis will be gone by 2018, but not the political crisis; and enforcing fiscal rules via political arm twisting ensures disaster.  View Article
VoxEU: Low inflation in the eurozone
Eurozone inflation has been falling steadily since early 2013, turning negative in late 2014. Aggregate demand and oil prices played key roles in the drop, which has consistently ‘surprised’ market-based expectations.   View Article
European Council: EFSM revised to shield non-euro area countries from risk
The Council approved a regulation amending the European Financial Stabilisation Mechanism in order to protect non-euro area member states from any risk arising from financial assistance given to a euro area country.   View Article

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