Monday, Jan 28, 2008
Will Europe emerge relatively unscathed? What about property bubbles in Spain & Ireland?
FT: Expect the Eurozone to show some resistance
Credit generation in the eurozone has remained extremely buoyant. The financial crisis has had no discernible effect on actual credit flows. The eurozone banking sector is not only healthy, but continues to supply the economy with ample funds. The eurozone is in many important aspects different from the US and the UK. There has been no fall in house prices. There is no subprime crisis. There are no monoline insurers. There is no pandemic of overstretched borrowers. While there are clearly some distressed banks, the European banking sector is still robust, the odd rogue trader notwithstanding. The eurozone is also in a fiscally strong position to confront a downturn.
Posted by drewster @ 12:07 AM (366 views) Add Comment
5 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. bystander said...
Guessing by the columnist's name that we have an objective view of the Eurozone from someone with absolutely no vested interest in making the Eurozone appear more functional than it really is. It would be a different story if Germany was not the manufacturing giant it is, as the rest of the EU is going through some rough times.
2. drewster said...
@bystander:
Yes he's called Wolfgang Munchau and he is German, but he's a newspaper columnist - not a Vested Interest. His arguments for the relative strength of the Eurozone compared to UK/USA have considerable merit. The Eurozone will suffer some collateral damage, but it won't be hit as hard as the US and UK.
3. Kirstygee said...
Discounts of 40.000 euros and houses still not shifting, Ireland has a glut of purple bungalows and South Fork ranches that nobody wants. All the quaint little cottages are being bulldozed and now people in the building trade are finding it harder to get work.
Look on any website in Southern Ireland and see the signs - a large modern 4 bed home near my family has been on market for 2 years - overpriced and unattractive. Families saddled with hideous debt, stuck and unable to take life opportunities because no-one can buy their homes.
As Frankie said we're all 'Working for the taxman'
4. Nervousinvestor said...
The Eurozone is pretty diverse, ranging from pretty lax credit in places like Spain and Ireland that have had their grossly inflated property bubbles pop spectacularly and will continue to deflate.
The largest and most significant member is Germany which has maintained a very conservative banking policy and not allowed rampant asset price inflation and whose population has very low debt. They have the second largest trade surplus after China despite a strong overvalued currency. They will be the real winners in the coming recession, and will benefit when the euro central bank is forced to cut rates and devalue the euro to bail out countries like France.
5. japanese uncle said...
The discrepancy between Germany and other economies will be getting just bigger, as all countries except Germany are more or less contaminated by the housing bubbles. In Madrid typical houses are priced at 10 times @ annual income. No different from London!
Euro is currently just serving as haven from USD/GBP, but for how long?