Translation of "Peripheriestaaten" in English

Peripheral countries and islands are more dependent on duty-free sales than central mainland European countries.

The ECB will take comfort from the limited contagion to other peripheral markets thus far.

The ECB has decided to continue to buy massive quantities of bonds from the affected peripheral countries.

This should provide a boost to the Euro area, and in particular the periphery.

No one seems to have the power to impose a sensible resolution of its peripheral countries’ debt crisis.

Since the middle of this year, credit spreads on peripheral sovereigns have narrowed considerably.

To do this would take simultaneous progressive electoral victories in the major countries as well as in peripheral countries.

In the following charts we break out the inflation and employment data of the core and the periphery.

The rationale behind this idea is clear: troubled peripheral countries would benefit from lower funding costs.

2012 was not a good year for peripheral European defaults in the high yield market.

Nevertheless, I would like to point out that this mechanism will not be a panacea for the actual protection of the budgets of problem (or peripheral) states, and that we also need to consider a comprehensive solution to this problem (public debt reduction, renewal of confidence in the banking sector and structural reforms, including fiscal consolidation of the peripheral states in order to boost their competitiveness).

Whereas some German companies persuaded workers to accept wage cuts to help weather the financial crisis, wages across the southern periphery have been marching steadily upwards, even as productivity has remained stagnant.

Unless they abandon asymmetric adjustment (recessionary deflation), which concentrates all of the pain in the periphery, in favor of a more symmetrical approach (austerity and structural reforms on the periphery, combined with eurozone-wide reflation), the monetary union's slow-developing train wreck will accelerate as peripheral countries default and exit.

If the European periphery countries had their own currencies, it is likely that debt problems would morph right back into elevated inflation.

Moreover, even under this optimistic scenario, the problem of the current-account deficits of Italy, Spain, and the other peripheral countries will remain.

Implementing these proposals in, say, 1999, might have limited the gush of capital to the periphery immediately following the single currency’s introduction.

The average unemployment rate hovers above 10% (and much higher in the eurozone periphery – more than 20% in Greece and Spain) with youth unemployment over 30%.

Furthermore, most textbooks of the time ignored the financial sector; thus, they ignored the fact that capital flows to the periphery would be channeled via banks, and that when the capital stopped flowing, bank crises would strain peripheral members’ public finances.

The Italians and Spaniards are right: the principal reason for the size of the spread between the periphery and Germany is convertibility risk.

Now they just have to convince private investors that the fund, which will hold bonds of peripheral countries, is a good investment.

Many point to the fall in yields on peripheral area debt as a sign that the euro sovereign debt crisis is well and truly over.

For this reason, it is generally argued that the Eurozone rebalancing has to come not only through structural reforms in the periphery, but also through internal devaluation in the core of Europe.

In 2013 I blogged about how financing conditions had tightened aggressively for small and medium sized corporates (SMEs) in peripheral Europe.

Over the past year peripheral risk premiums have generally trended upwards, albeit at a much slower pace than in 2011/2012, suggesting that Schulz’s position could become relevant again.

If Germany ramped up public investment and started running deficits now, it would have no (moral) authority whatsoever to make any demands on peripheral countries to keep budgetary discipline.

Peripheral Eurozone bonds, and Spain’s in particular, look vulnerable to a sell off.

Moreover, while labour costs have decreased in other European peripheral countries helping to make them more competitive, they have not done so in the “Bel Paese”.

It was a different story for some countries in the European periphery, where Greek government bonds offered tremendous total returns above 50%, followed by Spanish and Italian sovereign debt.