ECB adds to data focusing on eurozone complexity
The European Central Bank is about to sharpen its view on the euro area. On November 10 the Frankfurt-based institution will publish a new quarterly report on households, bringing together data on families’ income, consumption and investment across the euro area and at country level. That will be followed in the coming months by enhanced data on banks’ balance sheets, interest rates for new loans, money markets and payment habits. In addition to ramping up its own research, the ECB is demanding more data from banks as part of its new supervisory and macro-prudential responsibilities. Starting in 2018, the ECB will gather detailed information on loans to non-financial companies worth more than 25,000 euros from all banks in the euro area. The project, known as AnaCredit, has come under criticism from lenders that have complained about the costs of reporting. New data on interest rates will show, for example, that a new mortgage in Cyprus costs more than twice as much as in Finland, and Greek companies pay more than three times as much on their loans than firms from Luxembourg. The new quarterly report on households will allow cross-country comparison of families’ saving and borrowing habits and gauge the effect of fluctuations in house prices. Preliminary data disclosed by the ECB show that Greek households’ disposable income shrank an average 4 percent a year in real terms in the last four years. It rose by almost 5 percent in the first quarter of this year in annualized terms. terviewed on October 9-16. Greek government and bank officials have argued that the controls – introduced in June to limit ATM withdrawals and overseas transfers – can be lifted by the start of 2016, after Greece’s banks have been recapitalized. “They’re too optimistic,” said Achilleas Chrysostomou, an economist at Standard Chartered Bank in London. “I think the European partners, the creditors, will want to see some more evidence of implementation of the program before they feel comfortable lifting the capital controls.” The European Central Bank is set to announce the results of a review of Greek banks at the end of this month. This is likely to show a capital shortfall of 18 billion euros, with the vast chunk of that hole to be filled by the state-run Hellenic Financial Stability Fund, according to the survey. The impact of capital controls on Greek economic activity means gross domestic product will contract 1 percent in 2015, according to economists in a separate Bloomberg survey. While that’s a deeper contraction than the 0.7 percent forecast in July, it still reflects unexpected resilience in the second quarter, when GDP increased 0.9 percent. Greece’s bailout agreement, signed in August, forecast the economy would shrink 2.3 percent this year. “The twin deficits in the government budget and external position have been resolved,” said Nicholas Magginas, an economist at National Bank of Greece in Athens, one of three economists in the survey who predicted controls will be lifted in the first half of 2016. “There is no need for a prolonged adjustment period under capital controls.”
Feta threat. Greek cheesemakers could face competition from US-made goat cheese using the name ‘feta’ if the United States is able to persuade the European Union to lift restrictions on products with PDO (protected designation of origin) status. It forms part of US demands in talks on the Transatlantic Trade and Investment Partnership.