Michael GoldfarbJanuary 16, 2012 10:35

Euro zone credit ratings downgrade ... reactions

Friday's Standard & Poor's downgrade of several euro zone countries' credit ratings have only made the faintest ripple across the continent

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French Prime Minister Francois Fillon shrugs off the Standard & Poor's downgrade of France's credit rating late Friday and visits the site of a big infrastructure project: the Cite du Cinema in suburban Paris (BERTRAND GUAY/AFP/Getty Images)

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Given the hysteria that greeted the announcement that Standard & Poor's was taking away France's AAA rating (along with that of Austria leaving Germany the only euro zone country with the top rating) - at least in the press - you might have thought the euro zone crisis was going to explode again. Not so.

That isn't to say some political leaders weren't angry. Spanish Prime Minister Mariano Rajoy was, following Spain's downgrade to A from AA-, according to this headline in El Pais.

Rajoy to Standard & Poor's: we don't need economic lessons:

"My government knows perfectly well what it needs to do to improve Spain's reputation, stimulate growth and create jobs," PM fires back after rating downgrade.

Michael GoldfarbJanuary 16, 2012 05:54

Euro zone debt crisis: focus returns to Greece

Negotiators head to Athens to try and nail down agreement on bail-out

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The rioting has calmed down in Athens but negotiations on the Greek bail-out aren't going so well. This week is crunch time and depnding on what's decided the streets may catch fire again. (LOUISA GOULIAMAKI/AFP/Getty Images)

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You may have thought the Greek crisis was pretty much over. After all the headlines from last November were: Greek bondholders agree to take a haircut and the country's Prime Minister George Papandreou resigns to be replaced by a technocrat named Lucas Papademos, who is more congenial to the needs of the EU's leadership in Brussels, and more important, to German Chancellor Angela Merkel.

But as focus shifted to Italy and now to France, the Greek situation has remained bogged down in details. This week Greece's creditors in banks and hedge funds (not necessarily interested in the same outcome) plus representatives of the "Troika" (EU, IMF and European Central Bank) descend on Athens for an intensive round of negotiations with the Greek government.

Larry Elliott at The Guardian has the best line of the day on the event. "It is international finance's version of Sartre's Huis Clos, a vision of hell where three people who loathe each other are stuck in a room for eternity."

Michael GoldfarbJanuary 13, 2012 08:52

Euro zone crisis: has a corner been turned?

The atmosphere is calmer these days - politically and in the bond markets. Why?

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Was Silvio Berlusconi's departure the turning point for the euro zone debt crisis? (ANNE-CHRISTINE POUJOULAT/AFP/Getty Images)

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There is probably no riskier form of behavior for a blogging journalist than to claim that a corner has been turned in solving the euro zone's debt crisis but two weeks into the New Year it feels like something has changed - and changed for the better.

It may be a moment akin to something in an episode of ER where the patient is in the emergency room and the crash carts have been deployed and vital signs have stabilized and the family - you and me and everybody in the world who understands that a euro crash will mean Great Depression MkII - are taking a deep breath, sipping tepid coffee, and feeling tentatively hopeful that the patient will make it.

Strong demand for Spanish and Italian debt sees borrowing costs fall

Luke BrowneJanuary 12, 2012 14:36

The sales reflect renewed confidence in both countries’ efforts to tackle their debt problems, with newly-appointed governments implementing budget cuts and other austerity measures to cut their respective deficits.

Michael GoldfarbJanuary 12, 2012 13:32

Europe: Daily economic round-up

Draghi speaks, bonds sell, euro rises, markets calm

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Mario Draghi at his monthly press conference today. His words were like balm on troubled financial market waters (DANIEL ROLAND/AFP/Getty Images)

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ECB chief Mario Draghi held his monthly news conference today and re-iterated he is not changing anything. Interest rates on ECB lending would remain at 1 percent. The bank plans to make further three year loans available for euro zone retail banks starting next month.

The first tranche of three year loans was made available just before Christmas. Almost half a trillion euros was borrowed by around 500 banks. Since then almost as much money has been deposited every night at the ECB leading critics to say the banks were borrowing the money but not getting it out in to the general economy by lending to businesses or buying euro zone nations' sovereign debt.

Draghi told the press conference that the program was working.

Michael GoldfarbJanuary 11, 2012 04:59

Italy: credit dries up so the Mafia steps in

Report claims organized crime has become the main lender to Italy's small and medium sized businesses.

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Naples crime boss Michele Zagaria following his arrest last month. That's not likely to put a crimp in Italian organized crime's profitable loan sharking activities as desperate small businesses turn to the mob as Italian banks have switched off the credit pump. (ROBERTO SALOMONE/AFP/Getty Images)

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As many as 200,000 businesses may have taken loans from the Mafia to stay in business, according to a report issued by the Italian business organization, Confesercenti, working with the Sicily-based anti-Mafia group SOS Impresa. It claimed that the Mafia had now become Italy's main source of loans to small and medium-sized businesses.

According to the report, organized crime has an annual turnover of 140 billion euros ($178.9 billion) of which 100 billion euros is profit. The liquidity of various criminal groups is now financing Italy's small businesses as banks have stopped lending to them.

Michael GoldfarbJanuary 6, 2012 12:37

Italy: the tax man cometh

Raid on luxury ski resort Cortina d'Ampezzo leads to astonishing haul

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The moon shines on the Italian Dolomites above Cortina d'Ampezzo, ski resort of the Italian rich and scene of an astonishing raid by tax authorities (Alain Grosclaude/Agence Zoom/AFP/Getty Images)

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Tax evasion has long been a national sport in Italy but with the country facing major debt problems - 1.9 trillion euros ($2.4 trillion) and counting - the government of recently appointed prime minister, Mario Monti, is letting Italians know everyone has to pay their taxes. He is doing it in dramatic style.

Michael GoldfarbDecember 29, 2011 08:39

Mixed messages from today's European bond auctions

Italian 10 year bond rates are finally back under 7 percent ... but only just. Meanwhile Hungary looks like the next target of bond markets.

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Mario Monti today at a press conference following an auction of 10-year Italian bonds that saw yield prices come down below the danger level of 7 percent (GABRIEL BOUYS/AFP/Getty Images)

Italian 10 year bond rates are finally back under 7 percent ... but only just. Meanwhile Hungary looks like the next target of bond markets.

Michael GoldfarbDecember 5, 2011 07:45

Euro crisis: news and questions to start the week

Italian government embarks on new austerity push ... but does cutting spending, raising the retirement age as well as all kinds of taxes address the fundamental problems of any advanced economy?

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If you knew what he knew you would look serious too. Italian Prime Minister Mario Monti shortly before his government announced new austerity measures for Italy, including raising the retirement age and a wide range of taxes. (ANDREAS SOLARO/AFP/Getty Images)

News from Italy and links to some the sharpest analysis around

Michael GoldfarbNovember 24, 2011 06:45

Europe: Thanksgiving? por nada

Euro zone crisis enters new phase as bond markets turn on Germany.

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Chancellor Merkel is constantly under the spotlight but now the glare is growing brighter as the bond markets are beginning to attack Germany. Will this force the Chancellor and her colleagues to change their policy on allowing the European Central Bank to be more proactive in solving the euro zone debt crisis? (HANNIBAL HANSCHKE/AFP/Getty Images)

Thanksgiving in Europe has a hollow ring as the economic crisis inside and outside the euro zone bites