Europe’s Consumer Confidence Up, U.s. Consumers Down


“If you don’t have this, then we might have to lie to ourselves again and say there is no problem because we couldn’t afford to fund the problem.” CONFIDENCE OR COMPROMISE The ECB wants to check the health of big banks, under a so-called Asset Quality Review (AQR), before taking over their supervision. This will also help shape wider testing of banks outside the euro zone, overseen by the European Banking Authority (EBA). In Frankfurt, home of the ECB, there is growing resignation that a pan-euro-zone backstop is unlikely and that countries may be left to prop up their banks alone, as they were when the financial crisis struck. “We’ll have to have national backstops in place,” ECB President Mario Draghi told the European Parliament earlier this week. “If it (single resolution scheme) is not there in place, it will be up to the national authorities … which is suboptimal, of course.” Such a compromise exasperates bankers, who want confidence restored to the sector so their cost of funding drops. “The ECB, EBA and EU are all saying that the AQR and stress tests will be stringent,” said a credit banker at a large London-based investment bank. “It’s easy for those to say that; they don’t have to come up with the money. “It’s the government I want to hear it from. I want to hear from the government what happens if banks fail.” With confidence in European banks still low, the sector is valued at a significant discount to U.S. peers, trading at around par with the book value of its tangible assets compared with around 1.7 times for the United States, according to an analysis by KBW.

The Wilding of Europe

From a low of 1,200, the population now numbers in the hundreds of thousands. The Bison bonasus became extinct as late as the 20th century. In captivity, 54 specimens remained in eastern Europe, so there was the opportunity to plan a recovery from Poland and several other sources of the remnants In comparison, one ibex species, Capra ibex, has recovered now for 45 years, with 36,500 now occupying Italian Swiss and more easterly montane areas. It was in the same position as the bison in the 19th century, so there is hope that we can follow the same path to recovery for many mammals. The white-tailed or sea eagle, Haliaeetus albicilla, was lost to many countries from the 10th century till the 1970s. North Africa and SE Europe were part of its domain, as well as the ocean, rivers and lakes of the Palearctic region. Gamekeepers put paid to the predators on their land and hunting simply decimated them. Luckily, the Norwegian birds in particular avoided pesticide residues more and proved a good basic stock for recolonisation, as well as expansion. Cranes around the world are valued and revered creatures, but western Europeans hunted them, as with other species, and huge wetland habitat losses weighed against them, until only 45,000 remained in 1985. They have much more protection now, 300, 000 in the west and larger populations across Eurasia, where they are common. Wilding Europe is the theme of this paper and a conference in October.

In the CNBC poll, 61 percent of Americans expressed a downbeat view on the current state of the economy, a 5-point increase from three months ago. Americans are growing more worried that their personal income won’t keep up with inflation, that higher interest rates will make economic growth sag, and that the Washington budget wars will lead to an economy-battering partial shutdown of the government. Yet in Europe, the skies are clearing. Consumer confidence in the United Kingdom rose to the highest level in six years as real-estate prices bounced back and spending ticked up. Why is this happening? In part, because Europe is emerging from darker times. While the U.S. came out of the Great Recession in 2009, much of Europe suffered through a double-dip recession. Economic crises in Greece, Ireland and other countries threatened to be contagious. That sent confidence reeling in the Old World. Talk about role reversal. For some time, it seemed, U.S. hopes for a robust recovery were being held back by the risk created by the economic failures of Europe. Now it looks like the public perception here is that our problems are homegrown.