Angel Ubide

R.I.P. Christopher Sims (21 Oct. 1942 - 14 March 2026) - a giant in macroeconomics and one of the finest human beings I have ever met -

Here's a quick scenario analysis on the possible consequences of the Iran-War for euro area inflation. We consider different scenarios of more or less per-sistent increases of gasoline, diesel, natural gas, kerosine price increases on headline and core HICP inflation.

La política exterior española hacia Irán o Trump es sin duda debatible y hay claros elementos de crítica. Pero resulta llamativo (y triste) que cuatro analistas brillantes coincidan en el prisma perezoso del derrotismo, el complejo de inferioridad y la autodenigración colectiva.

Fascinating to watch first 🇫🇷, then 🇬🇧, then 🇮🇹, now 🇩🇪 start to acknowledge what 🇪🇸's government recognised from the very start: the Trump-Netanyahu war on Iran is a reckless intervention conducted without regard for the rules of war and without a strategy for what comes next.

I think it is directly related in the following sense. What the Eurozone needs is a bond market that prices the marginal Euro the Belgian or French government borrows in capital markets to accurately reflect the underlying credit risk of Belgium or France without pricing in implicit guarantees or contingent transfers. Market participants should understand that default is a real option. That way the Belgian and the French government face the right incentives when trading off different fiscal options. Olivier’s proposal doesn’t help in this regard. Even if the French government borrows the marginal euro in the national French bond market (call these red bonds), not in the blue bond market (the Euro bonds), the blue bonds give France more leverage. If France gets into serious fiscal trouble, the French PM could tell the other Europeans that France will redirect the VAT revenue slated for French payments on the blue bonds to the payments on their red bonds (hard to legislate that option away for the French; they can always change the law ex post). That’s the rational thing to do for France because its actions now have a much larger effect on the yields of the red bonds than on the yields of the blue bonds. That then also gives the French PM more leverage to get a bailout from the other European countries in the blue bond pool who definitely want to avoid anything that causes blue bond yields to spike. The blue bond yield affects all these countries directly. Also, the blue bonds would be the safe asset of the Eurozone. It's akin to having households take out 2 mortgages: one through an MBS where each household in the pool pays the same rate as all other households; another one where each household pays a rate that reflect its own credit risk.

US aircraft leave Spain after government says bases cannot be used for Iran attacks

Canada is now the first non-European country to be granted a membership in SAFE. This is a gamechanger program that means Canada can rearm our Canadian Armed Forces members more effectively and scale up our defence industries with more contracts overseas.

At Canada’s initiative, work has begun on the creation of a new CanZUK Alliance: Canada, Australia, New Zealand, and the United Kingdom. Expanded duty-free trade. Faster and easier opportunities to work within the alliance. Political cooperation. In the long term — a Confederation. Public support for the Alliance: Canada — 76% Australia — 73% New Zealand — 82% United Kingdom — 68%

Here's an idea - countries in support of Eurobonds go ahead with it through enhanced cooperation. They make a tremendous success of it, which is guaranteed given their solid domestic fiscal credentials and healthy spending priorities, and next time more countries will join.