{"id":1024,"date":"2012-05-25T13:00:00","date_gmt":"2012-05-25T13:00:00","guid":{"rendered":"http:\/\/starthostunlimiteddmffassi-ss.stackstaging.com\/bondworld.ch\/home\/sites\/20b\/7\/760c69a11c\/public_html\/investmentworld.ch\/index.php\/2012\/05\/25\/viewpoint-greece-in-the-hope-that-the-new-elections-will-ease-tensions\/"},"modified":"2012-05-25T13:00:00","modified_gmt":"2012-05-25T13:00:00","slug":"viewpoint-greece-in-the-hope-that-the-new-elections-will-ease-tensions","status":"publish","type":"post","link":"https:\/\/www.investmentworld.eu\/ch\/viewpoint-greece-in-the-hope-that-the-new-elections-will-ease-tensions\/","title":{"rendered":"Viewpoint:  Greece. In the hope that the new elections will ease tensions"},"content":{"rendered":"<p style=\"text-align: justify;\">This week\u2019s calendar of events is not conducive to developments in terms   of the debt crisis: in waiting for the outcome of the elections in   Greece&#8230;..<strong> <\/strong><\/p>\n<p>  <!--more-->  <\/p>\n<ul> <\/ul>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<ol><\/ol>\n<hr \/>\n<p> Sign up for our free newsletter to receive weekly news from BONDWorld<br \/> <a href=\"index.php?option=com_acymailing&amp;view=user&amp;Itemid=107\"><strong>Click  here to register for your free copy<\/strong><\/a><a href=\"index.php?option=com_acymailing&amp;view=user&amp;Itemid=1023\"><strong>&nbsp;<\/strong><\/a>  <\/p>\n<hr \/>\n<p style=\"text-align: center;\"><strong>For professional investors and advisers only<\/strong><\/p>\n<hr style=\"text-align: justify;\" \/> <\/p>\n<div style=\"text-align: justify;\">the  safety net represented by European funds remains inadequate. As regards  growth, while it has been acknowledged that there is little sense in  pursuing absolute deficit targets during a recession, stimulus  initiatives such as the introduction of \u201cproject bonds\u201d remain limited.  In the meantime, the round of monthly data for May has signalled the  risk of a fall back into recession for the euro area in the spring  months, after a stagnation phase at the beginning of the year, as even  Germany, the continent\u2019s last stronghold, seems to be wavering.<\/div>\n<div style=\"text-align: justify;\">&#8211;  There is no real use in trying to assess the results of an \u201cinformal  dinner\u201d, where no decisions could effectively be taken, as was the case  at the 23 May meeting of the European Union\u2019s heads of state and  government. However, the G8 summit, the informal dinner, and the  statements made following the events, allow us to investigate the  progress being made on a number of important issues.<\/div>\n<div style=\"text-align: justify;\">&#8211;  First, the safety net for the euro area. No miracles were expected, and  none came about. As we have noted in the past, apart from possible  cosmetic touch-ups to the modus operandi of the future ESM, the safety  net represented by European funds remains inadequate, and only the ECB  can provide the necessary capacity and swiftness of action. However, out  of respect for the independence of the central bank, it is unthinkable  that the Council officially call for the ECB\u2019s greater involvement, and  any extraordinary measures will only be announced by the ECB\u2019s Governing  Council, when appropriate. However, Spain has apparently made an  informal request for support from the monetary authorities, through the  already tested channels.<\/div>\n<div style=\"text-align: justify;\">&#8211; Second, Greece. In the hope that the new elections will ease tensions rather than add to them, it<br \/>is  only reasonable to have contingency plans in place in the event of the  situation spiralling out of control. Equally reasonable is the choice  not to talk of the issue too much, in order not to increase the risks of  a spontaneous collapse of the domestic situation.<\/div>\n<div style=\"text-align: justify;\">&#8211;  Third, growth. In the dialogue of the deaf among euro area member  states, one shared notion seems to be acceptance of the principle that  there is little sense in pursuing absolute deficit targets during a  recession. This in itself marks some progress (albeit made prior to both  the G8 and the informal dinner). The idea of \u201cproject bonds\u201d is  conceptually interesting, but of little practical clout, given the very  modest size of the pilot project. Also, considering Italy\u2019s historical  record, it is not necessarily better to have higher taxes and larger  public investments, rather than lower taxes and smaller public spending.<\/div>\n<div style=\"text-align: justify;\">&#8211;  Speaking of growth, the indications received this week were far from  reassuring. The round of monthly data for May has signalled the risk of a  fall back into recession for the euro area in the spring months, after a  stagnation phase at the beginning of the year, as even Germany, the  continent\u2019s last stronghold, seems to be wavering. The composite PMI  stabilised at 45.9, a low since June 2009, and is compatible with a  contraction of the economy in the spring months.<\/div>\n<div style=\"text-align: justify;\">Business  confidence dropped more than expected in France, as also in Belgium.  However, the most worrying aspect is that even Germany, the continent\u2019s  last stronghold, seems to be wavering. The IFO took a surprise dive, to  106.9 from 109.8. The index is still one standard deviation above the  long-term average (100,8), but has dropped back to last autumn\u2019s levels,  when the German economy contracted by -0.2% q\/q. Survey data broken  down by sector show that the IFOs\u2019 decline is explained only in part by  business conditions in the manufacturing sector. Retail sales were the  main culprit, down by 14.3 points to -3.6, probably due to exceptionally  cold weather conditions. The German Composite PMI activity index  slipped to 49.6 in May, from 52.9 in the first three months of the year.  Therefore, the IFO and PMI monthly surveys suggest that Germany\u2019s  growth rate of +0.5% q\/q, which supported the European average at the  beginning of 2012, will not be matched in the spring months. This will  be all the more likely if the month-on-month slowdown of the  manufacturing sector\u2019s order book trend is confirmed, as the support of  German exports, the main growth driver in the first part of the year,  would also wane. On this front, the drop of the HSBC PMI in China, and  of the Markit PMI in the United States in May, offer no comfort.<\/div>\n<hr \/>\n<p> <strong>Appendix<br \/><\/strong> <\/p>\n<p style=\"text-align: justify;\"><strong>Analyst Certification<\/strong><br \/>The  financial analysts who prepared this report, and whose names and roles  appear on the first page, certify that: (1) The views expressed on  companies mentioned herein accurately reflect independent, fair and  balanced personal views; (2) No direct or indirect compensation has been  or will be received in exchange for any views expressed. Specific  disclosures: The analysts who prepared this report do not receive  bonuses, salaries, or any other form of compensation that is based upon  specific investment banking transactions.<\/p>\n<p><strong>Important Disclosures<\/strong><br \/>This  research has been prepared by Intesa Sanpaolo S.p.A. and distributed by  Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the  London Stock Exchange) and Banca IMI Securities Corp (a member of the  NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for  the contents of this report. Please also note that Intesa Sanpaolo  S.p.A. reserves the right to issue this document to its own clients.  Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo  Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both  authorised by the Banca d&#8217;Italia, are both regulated by the Financial  Services Authority in the conduct of designated investment business in  the UK and by the SEC for the conduct of US business.<br \/>Opinions and  estimates in this research are as at the date of this material and are  subject to change without notice to the recipient. Information and  opinions have been obtained from sources believed to be reliable, but no  representation or warranty is made as to their accuracy or correctness.  Past performance is not a guarantee of future results. The investments  and strategies discussed in this research may not be suitable for all  investors. If you are in any doubt you should consult your investment  advisor. <br \/>This report has been prepared solely for information  purposes and is not intended as an offer or solicitation with respect to  the purchase or sale of any financial products. It should not be  regarded as a substitute for the exercise of the recipient\u2019s own  judgement.<br \/>No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities  accept any liability whatsoever for any direct, consequential or  indirect loss arising from any use of material contained in this report.  <br \/>This document may only be reproduced or published together with the  name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo  S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management  Policy for managing effectively the conflicts of interest which might  affect the impartiality of all investment research which is held out, or  where it is reasonable for the user to rely on the research, as being  an impartial assessment of the value or prospects of its subject matter.  A copy of this Policy is available to the recipient of this research  upon making a written request to the Compliance Officer, Intesa Sanpaolo  S.p.A., 90 Queen Street, London EC4N 1SA.<br \/>Intesa Sanpaolo S.p.A. has  formalised a set of principles and procedures for dealing with  conflicts of interest (\u201cResearch Policy\u201d). The Research Policy is  clearly explained in the relevant section of Banca IMI\u2019s web site  (www.bancaimi.com).<br \/>Member companies of the Intesa Sanpaolo Group, or  their directors and\/or representatives and\/or employees and\/or members  of their households, may have a long or short position in any securities  mentioned at any time, and may make a purchase and\/or sale, or offer to  make a purchase and\/or sale, of any of the securities from time to time  in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and  circulates research to Qualified Institutional Investors in the USA only  through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167  New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This  document is intended for distribution only to professional investors as  defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a  printed document and\/or in electronic form. Person and residents in the  UK: This document is not for distribution in the United Kingdom to  persons who would be defined as private customers under rules of the  FSA.<br \/>US persons: This document is intended for distribution in the  United States only to Qualified Institutional Investors as defined in  Rule 144a of the Securities Act of 1933. US Customers wishing to effect a  transaction should do so only by contacting a representative at Banca  IMI Securities Corp. in the US (see contact details above). <br \/><strong><br \/>Valuation Methodology<\/strong><br \/>Trading  Ideas are based on the market\u2019s expectations, investors\u2019 positioning  and technical, quantitative or qualitative aspects. They take into  account the key macro and market events and to what extent they have  already been discounted in yields and\/or market spreads. They are also  based on events which are expected to affect the market trend in terms  of yields and\/or spreads in the short-medium term. The Trading Ideas may  refer to both cash and derivative instruments and indicate a precise  target or yield range or a yield spread between different market curves  or different maturities on the same curve. The relative valuations may  be in terms of yield, asset swap spreads or benchmark spreads.<br \/><strong><br \/>Coverage Policy And Frequency Of Research Reports<\/strong><br \/>Intesa  Sanpaolo S.p.A. trading ideas are made in both a very short time  horizon (the current day or subsequent days) or in a horizon ranging  from one week to three months, in conjunction with any exceptional event  that affects the issuer\u2019s operations. In the case of a short note, we  advise investors to refer to the most recent report published by Intesa  Sanpaolo S.p.A\u2019s Research Department for a full analysis of valuation  methodology, earnings assumptions and risks. Research is available on  IMI\u2019s web site (www.bancaimi.com) or by contacting your sales  representative.<\/p>\n<p>Source: BONDWorld &#8211; Intesa Sanpaolo \u2013 Research Department<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This week\u2019s calendar of events is not conducive to developments in terms of the debt crisis: in waiting for the outcome of the elections in Greece&#8230;..<\/p>\n","protected":false},"author":2,"featured_media":3455,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[50],"tags":[],"class_list":["post-1024","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-weekly-analysis"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=1024"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1024\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media\/3455"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=1024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}