Eurozone

Thursday

Matthew Lynn

The EU’s threats against London have been exposed as bluster

Francois Hollande could hardly have been clearer in his intentions. In the immediate aftermath of the 2016 vote that took the UK out of the European Union, the French president was adamant that the City of London would have to lose one of its most important strategic assets, the right to clear trades denominated in euros.  ‘The City, which thanks to the EU was able to handle clearing operations for the eurozone, will not be able to do them,’ he thundered. ‘It can serve as an example for those who seek the end of Europe…It can serve as a lesson.’  In reality, like so many of the EU’s threats, it was

Friday

Matthew Lynn

The eurozone’s Covid recession has arrived

The US is booming. The UK is set to grow at the fastest pace in half a century. China is expanding again at a blistering pace. Stock markets are rising. And commodity prices are racing ahead.  Across most of the world, economists are starting to worry about a runaway boom, stimulated by too much easy money. This, they fear, could easily run out of control. There is one exception, however: the eurozone. As of today, the zone is officially in a double-dip recession. The vaccine downturn has arrived. And while the consequences remain unpredictable, one thing is clear: they won’t be good. The reality is that the eurozone was already the

Thursday

Gerard Lyons

No, Amsterdam hasn’t overtaken the City

London is Europe’s major financial centre and one of the world’s two leading financial hubs. This is unlikely to change following Brexit. Its main competition is with New York, Singapore, Hong Kong and other centres like Shanghai that will emerge in the coming years. However, the headline of today’s main story in the Financial Times proclaimed, ‘Amsterdam ousts London as Europe’s top share trading hub’. The article correctly reported that more shares were traded last month on ‘Euronext, Amsterdam and the Dutch arms of CBOE Europe and Turquoise in January’ than ‘in London’. While the data in this story is naturally correct, it needs to be put within context in order to

Friday

Matthew Lynn

Italy is about to hijack the eurozone

There is still some debate about who came up with the adage that ‘if you owe the bank $100 that is your problem. If you owe the bank $1 million dollars that is their problem’. It is usually attributed to the oil tycoon J. Paul Getty, which may help explain how he became the richest man of his era. Occasionally, and in a slightly modified form, it is attributed to John Maynard Keynes in his advice to the British cabinet after world war two. And yet in truth, it should probably have been coined by an Italian. Why? Because the country now owes so much money to the rest of

Tuesday

Matthew Lynn

A German court has plunged the eurozone into fresh crisis

An epidemic has been raging across the continent. The economy is in lockdown, and GDP is in freefall. But, hey, just when you thought things couldn’t get any worse in the eurozone it now has a financial and currency crisis as well, and one that is being made worse by the week with the shambolic management of the European Central Bank by Christine Lagarde. Today, the German constitutional court has, at least in part, ruled against the ECB’s bond-buying programme, which allows the central bank to print money and effectively bail out Italy, Spain, and probably quite soon France as well. You need to be a German lawyer – not