Bielmeiers Blog

DZ BANK

Stefan Bielmeier, DZ BANK’s Chief Economist and Head of Research, comments on economic developments in Europe, the USA and the Emerging Markets, assesses international financial market trends and gives his opinion on politics and economic policy – concisely, succinctly and to the point. The economics and financial market experts of DZ BANK’s Research division support Stefan Bielmeier in his blog. Find out more in Bielmeier‘s Blog about DZ BANK Research’s current topics, the experts’ focal areas, and their general viewpoints on the latest developments.
Italy: Moody’s also gives the thumbs down

Within the framework of an unscheduled rating review the rating agency Moody’s lowered its outlook for Italy yesterday from stable to negative, but the rating agency reaffirmed its Baa2 rating. Moody’s expressly cites the reason for its decision as lying in the “no” vote of Italian voters on the reform of the Senate, which it believes will now further undermine the already slow progress made with economic and structural reforms. Moody’s concedes that Italy has made some changes in the past few years, citing among other things the labour law amendment, but these reforms have had only a slight positive impact on growth and the public finances. As the second reason for lowering its outlook Moody’s cites the risk that the reduction of Italy’s large aggregate public debt could be postponed yet further given the low growth and new debt as well as Italy’s exposure to exogenous shocks. The rating…

Spain: Economic upswing backed by reform policies

The Spanish economy has managed until now to continue its strong recovery course virtually uninterrupted. In the third quarter, the Spanish National Statistics Office estimated the quarter-on-quarter growth rate for gross domestic product (GDP) at 0.7 percent. While slightly lower than in the preceding quarters, it still leaves Spain the almost undisputed leader among the member states of the eurozone. Economic growth for the whole of 2016 is expected to slightly exceed the 3 percent mark. What makes this all the more surprising is that for a long time the country had only been ruled by a caretaker government. Yet this period without government does not appear to have harmed the country in any way. Instead, the Rajoy government launched crucial reforms between 2012 and 2015 and thereby created the conditions to enable the economy to fall back into step again. The country can now reap the rewards of the…

Italy’s “No”-vote and its consequences

In yesterday’s referendum Italy rejected the reform of the Senate with a clear majority – about 41% voted for the plan supported by the government, 59% were against. The Italians’ No comes as a crushing defeat for Prime Minister Renzi, even though the polls of the past few weeks made such an outcome increasingly likely. The political consequences of the result of the vote are likely to be considerable. During the night Prime Minister Renzi conceded defeat and announced his resignation from the post of head of government. Renzi will tender his letter of resignation to President Matarella later today. The latter must decide whether to accept the resignation, and assuming that he does, he must then nominate a new prime minister, who must then be confirmed by parliament. Renzi has already announced that he does not wish to preside over a transitional government. Possible successors for the position of…

Austria: President Van der Bellen

Relatively clear electoral victory for the Green candidate in Austria– surveys show that the FPÖ remains the strongest force ahead of the National Council elections Austria has elected a new President: the winner is Alexander Van der Bellen. After the election was declared invalid in May due to various procedural irregularities and the date set for September was postponed when faulty postal voting ballot papers were discovered, the current status provides no grounds for contest so that the result can be deemed final – an objection can however be lodged up to 22 December. The election of the independent Green Party-backed candidate to the Vienna Hofburg has put a slight damper on the recent wave of victory enjoyed by the populist parties. According to projections made by the ORF – the postal votes will be counted in the course of today – Van der Bellen received 53.3% of the votes….

Hollande announces that he will not stand for the presidency

Incumbent French President Hollande yesterday announced that he will not stand as a candidate in the presidential elections. In the entire history of the Fifth French Republic it is the first time that an incumbent president has announced his withdrawal in advance, despite the chance of re-election. Hollande thus accepts the consequences of his catastrophically poor approval ratings, which were recently in the single-digit percentage region. For its part the Socialist Party already announced quite some time ago that it would not support Hollande unconditionally with a renewed candidacy. Instead Hollande would have had to submit to a preliminary election by his party. Given that the Republicans recently identified their candidate Fillon by means of preliminary elections, Hollande was under pressure to make an announcement regarding his intentions. With Hollande’s withdrawal, the number of socialist candidates in the race for the highest office of state is reduced. Prime Minister Valls…

A fateful vote in Italy – regression or progress

This year has already seen some fateful votes with surprising outcomes. The British decided in favour of Brexit and the USA for the experiment Trump. In a few days Italy is also facing such a fateful vote. And here, too, the country is deeply divided. A lot is at stake: Can Italy finally become governable? On 4 December Italians are to vote on Prime Minister Renzi’s planned constitutional reform. The purpose of this reform is to make it easier to govern the country: at the moment, every law has to get through three readings in both chambers of parliament – the Chamber of Deputies and the Senate. Since in the past a government has seldom been able to rely on a majority in both chambers, proposed legislation has frequently been blocked or diluted. This perfect bicameralism has made it incomparably hard to govern Italy and has ultimately led to frequent…