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Wed, 26th April 2017

Anirudh Sethi Report

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Archives of “luxembourg” Tag

Le Pen to Hold Referendum on French EU Exit in First Half of 2018 if Elected

Image result for Le PenThe first round of the French presidential elections is scheduled for this Sunday, while the run-off is set for May 7.

“Marine Le Pen said that she wanted an exit of the European Union organized with our European partners and that this departure would be sanctioned by a referendum. [Which will be held] undoubtedly in the first half of 2018,” David Rachline said.

According to Le Pen’s campaign manager, she also wants to “drastically change economic policy, while putting an end to increasing financialization and globalization of the economy.”

“We were warned of a catastrophe with the Brexit vote, the facts, however, disagree with those merchants of fear who in reality do not want us to touch this system, which grants them numerous advantages!” Rachline pointed out.

The United Kingdom’s decision to leave the European Union and the victory of Donald Trump in the US presidential election in 2016 were seen as big victories for the anti-establishment and anti-globalist movement. Le Pen’s approach seems in sync with the growing anti-globalism trend.

France’s Le Pen says many countries are bound to leave the Euro zone

Marine Le Pen doesn’t like the euro (doesn’t like a lot of stuff)

  • Many countries bound to leave the euro zone
  • Makes no difference if debt repaid in euro or franc
Bloomberg with the headlines, not sure what context She was speaking in …
Ahh … here we go
  • interview on France2 TV (a 2 hour interview! Stamina – kudos for that)
  • “Italy, Spain, Greece” all “dying from the common currency built around the DMK”

Frexit would ‘impoverish’ France warns ECB’s Cœuré

Image result for frexitMarine Le Pen’s plans to take France out of the euro would consign the country to impoverishment, one of the European Central Bank’s most senior French officials has warned.

Benoît Cœuré, executive board member at the ECB, called the notion of a ‘Frexit’, a choice for “impoverishment” that would “threaten the jobs and savings of the French people”.

Ms Le Pen, leader of the far-right National Front, is vowing to hold a referendum to take France out of the eurozone and redenominate the country’s €2tn of outstanding debt into a new franc after 18 years of membership should she become the country’s new president in May.

Should a Frexit occur, “debts incurred by French businesses and households would increase”, warned Mr Cœuré.

“Inflation, which would no longer be restrained by the ECB, would eat into savings, the fixed incomes of households and small pensions”, he added.

Despite Ms Le Pen’s assurances of an “orderly” exit, the French central banker said “leaving the euro would mean taking risks which have unpredictable consequences”.

The prospect of surging popularity for Ms Le Pen and the apparent demise of one of her main rivals for the job, the right-wing Francois Fillon, has sent the country’s 10-year bond yields to an 18-month at the start of the week.

Investors have dumped French debt, demanding the highest premium in four years to hold its benchmark bonds over Germany’s, as the likes of S&P Global Ratings have warned a Frexit would result in a likely downgrade of France’s sovereign borrower status.

With less than three months since the start of the first round presidential vote, Mr Cœuré said he could “not contemplate” a French vote in favour of leaving the euro, with the latest polling showing around 68 per cent of French people still back membership of the single currency area.

Amid promises by Ms Le Pen to restore monetary sovereignty to France and reverse the forces of globalisation, Mr Cœuré defended the euro, arguing it had proven to have had “greater benefits for the disadvantaged and the vulnerable”.

French-German debt spread widest since 2013

FRENCH256The couture fashions shown in Paris over the last week have not made French debt any more attractive.

The premium investors demand to own two-year French debt over similarly maturing German bonds climbed to its highest level since the 2013 Taper Tantrum on Monday, as the country’s election looms.

The difference between yields on two-year French and German sovereign bonds climbed to 25 basis points on Monday, up from 18.5 bps on Friday and a low of less than 1 bp touched after the US election last November. Yields on the French note climbed 5 bps on Monday, compared to a 2 bp drop in German ones.

Davos 2017: UK will lead world in free trade after Brexit, says May

UK prime minister Theresa May has said Britain will seek to lead the world in free trade after the Brexit vote as she sought to reassure the global economic elite her government would remain a force for liberalisation and globalisation after the EU referendum.

Addressing the annual World Economic Forum in Davos this morning, Ms May said Britain would “step up to a new leadership role as the strongest, most forceful advocate for free markets and free trade anywhere in the world” as it seeks to strike new trade agreements after the referendum.

Despite seeking to align herself with the Davos crowd, the prime minister also used her speech to rail against a “cult of individualism”, quoting conservative British philosopher Edmund Burke in favouring a pace of change that would still “conserve”, in remarks delivered to a subdued main congress hall.

She added the Brexit vote was a decision to “restore our parliamentary democracy and national self-determination. A vote to take control and make decisions for ourselves”.

European Indices Closed in Red

German Dax Down -0.41%, France’s CAC -0.4%

The European major stock indices are ending the day lower.
  • German Dax, -0.41%, Low 10441.81. High 10566.65. Close 10544.44
  • France’s CAC. -0.40%, low for 390.04. High 4437.82. Close 4424.25
  • Euro Stoxx. -0.39%. Low 2974.73. High 3008.44. Close 2998.50
  • Spain’s Ibex.  -0.50%. Low 8573.70. High 8660.90. Close 8616.40
In the EU debt market, the 10 year yields are trading marginally lower
  • Germany -0.83%, -1 basis point
  • France 0.161%, -1 basis point
  • Italy 1.12%, -2 basis points
  • Portugal 3.033%, -1 basis point
  • Spain 0.936%, -1 basis point
  • Greece 8.038%, unchanged

Joseph E. Stiglitz — From Brexit to the Future

Digesting the full implications of the United Kingdom’s “Brexit” referendum will take Britain, Europe, and the world a long time. The most profound consequences will, of course, depend on the European Union’s response to the UK’s withdrawal. Most people initially assumed that the EU would not “cut off its nose to spite its face”: after all, an amicable divorce seems to be in everyone’s interest. But the divorce – as many do – could become messy.

The benefits of trade and economic integration between the UK and EU are mutual, and if the EU took seriously its belief that closer economic integration is better, its leaders would seek to ensure the closest ties possible under the circumstances. But Jean-Claude Juncker, the architect of Luxembourg’s massive corporate tax avoidance schemes and now President of the European Commission, is taking a hard line: “Out means out,” he says. 

That knee-jerk reaction is perhaps understandable, given that Juncker may be remembered as the person who presided over the EU’s initial stage of dissolution. He argues that, to deter other countries from leaving, the EU must be uncompromising, offering the UK little more than what it is guaranteed under World Trade Organization agreements.

German Foreign Minister Cautions Against Hysteria in Wake of Brexit Vote

German Foreign Minister Frank-Walter Steinmeier addresses a news conference after talks with his Belarus counterpart in Berlin on November 18, 2015The European Union must restrain itself from hysteria and sporadic actions following Brexit, German Foreign Minister Frank-Walter Steinmeier said Saturday. 

The meeting between German, French, Italian, Belgian, Dutch and Luxembourgian foreign ministers to discuss the results of the UK referendum on EU membership is taking place in the Berlin’s Borsig Palace on Saturday.

“We are in a situation which does not allow neither hysteria, nor shock. We must not slide into feverish actions or pretend that all the answers are already known,” Steinmeier told journalists.

On Thursday, the United Kingdom held a referendum to determine whether or not the country should leave the European Union. According to the final results, 51.9 percent of voters, or 17.4 million people, decided to support Brexit, while about 16.1 million opposed it.