Allianz Chief Economist named Forecaster of the Year
Dec 16, 2015
The German national daily Süddeutsche Zeitung has named Michael Heise Forecaster of the Year for what is now the third time since 2002.
Among more than 50 institutions Allianz took first place in the annual Forecaster of the Year ranking. Besides the forecast for German economic growth, the individual GDP components including consumption, exports and investment were analyzed. Süddeutsche Zeitung emphasized the impartiality of Allianz´s economic forecasts.
WSJ: 'Super Mario' Needs a Hand
Dec 04, 2015
Writing for The Journal, Michael Heise says the European Central Bank’s decision to extend its bond-buying program for six months increases the risks to the eurozone’s financial stability, since it eases constraints on debt-dependent governments and encourages banks to buy government bonds without too much concern for the risk of default. Mr. Heise argues that European Union governments should relieve the ECB of its responsibilities for regulating banks, and should also require banks to set aside capital against the risk of default by a eurozone government.
FAZ: Time to rethink inflation targeting
Nov 23, 2015
The financial markets are counting firmly on further monetary policy loosening by the ECB. Even before the meeting on 03 December, German government bonds yields and the euro have slipped sharply. That is probably to the ECB’s liking as it strives to boost inflation and get it back to the desired level of below but close to 2%. For some time now the ECB has been way off this mark.
FAZ: China will not cause a crash
Oct 05, 2015
Signs of a slowdown in China have been rattling stock markets of late. China is important, a hard landing of its economy, which absorbs some 10% of global merchandise imports, would hurt. But will the middle kingdom drag the global economy into recession? That seems unlikely. The US consumer is once again riding to the rescue.
The Globalist: Why the Fed Should Start Tightening
Sep 15, 2015
If the Fed wants to wait for economic circumstances that are perfectly balanced for a rate rise, that day might never come.
WSJ: Greece's Debt-Reduction Red Herring
Aug 27, 2015
Reforms to boost growth will have a far greater bearing on the long-term sustainability of Athens’s debt burden than immediate write-offs.
FAZ: Why Germany is right to call for Greek reforms not debt cuts
Aug 17, 2015
Greece’s third bailout programme – which is currently making its way through European parliaments – could underpin a swift recovery in the country, provided, of course, political turbulences do not derail the programme once more. While the new bailout and reform package is being passed, the debate about the need for outright debt cuts is heating up. The German government is however refusing upfront debt restructuring in order to keep up the reform momentum in Greece. There are good reasons to stick to this stance.
WSJ: The Threat That Could Save the Euro
Jul 28, 2015
By confronting Athens with the possibility of an exit from the currency, Berlin may finally have prompted overdue reforms.
Greece may have reached a preliminary settlement with its creditors, but peace and stability have not yet been restored in the eurozone. Recriminations are still flying between Greece and its creditors, and negotiations for a third bailout package will be fraught with difficulty.
Handelsblatt: Inapt mind games for the euro
Jul 27, 2015
“Germany should leave the euro.” It’s back again, the idea of splitting the eurozone into a north-euro and a south-euro. The discussion has been prompted by the possibility of a Greek exit. This is seen as breaking a taboo, instigating a debate as to whether bigger countries should leave the euro. However, such proposals are short-sighted, impractical and devoid of economic common sense.
Only available in German
Börse Online: Interview with Michael Heise after Greek referendum
Jul 07, 2015
Wide-ranging interview with Michael Heise on what happens next.
The Globalist: Are markets judging the risk of Grexit correctly?
Jul 03, 2015
On Sunday, Greek voters will decide whether they want to accept the creditors’ terms for a bailout program or not. That is not an easy choice to make, not least because many Greeks might be confused about precisely what they will be voting on.
FAZ: Looming insolvency in Greece
Jun 29, 2015
With the Greek government having broken off debt negotiations, the country faces impending insolvency in the days ahead. There is no money left to pay back the IMF loan to the tune of around EUR 1.6bn due on Tuesday. Even if nobody wants it, this could trigger a process that leads swiftly to Greece’s exit from the euro.
World Economic Forum: The real tragedy of the Greek debate
Jun 25, 2015
“Austerity is killing the Greek economy.” That is the conviction of many economists and politicians today. Of course, many mistakes were made in the course of the Greek crisis. Getting it right is always easier with the benefit of hindsight.
However, even with hindsight, it appears odd that some analysts and politicians seem to argue that Greece would be fine today if only it could spend a bit more money.
Financial Times: ECB must resist call to smooth bond moves
Jun 17, 2015
What would happen if the European System of Central Banks stopped financing the Greek economy? Although there are no indications in this regard at present, in view of the lack of progress of the negotiations with Greece closure of the ECB floodgates cannot be ruled out. This would have severe consequences, particularly for the banking system in Greece.
Handelsblatt Online: No one in Europe can want Grexit
Jun 03, 2015
The chorus is growing louder calling for the reform-shy Greeks to leave the eurozone. Grexit proponents argue that leaving the euro will not only return responsibility for economic and monetary policy to the Greeks themselves but, in the medium term, could also make the eurozone more stable: other countries would be compelled to show greater discipline to avoid the Greek fate. Such arguments often overlook the costs a Grexit would entail, above all for Greece, but also for the eurozone as a whole. In view of these risks, the political costs of a compromise that both the Athens government and the creditors would have to bear are manageable.
WSJ: The ECB should tell us what it's thinking
Jun 02, 2015
Greater clarity over how the bank would gauge the success of its bond-purchase program would reduce market volatility.
Focus Online: Mini interest rates threaten retirement planning
Jun 01, 2015
Ultra-low interest rates pose a major problem for savers.
Only available in German
FAZ: Time for monetary policy to get back to normal
May 11, 2015
After years in the doldrums, the eurozone would appear to be back on track to achieve significant growth averaging 1.5% in 2015. With oil prices still relatively low compared with September of last year, and with the external value of the euro, a strong tailwind is sweeping across the entire single currency area - with the exception of Greece.
FocusMoney: Positive upside potential
Apr 28, 2015
Michael Heise sees evidence of a strong upswing in Germany and in the eurozone: the low oil price and the weakness of the euro are buoying private consumption.
Only available in German
EurActiv: How resilient is the eurozone?
Apr 17, 2015
Although stability indicators have not returned to pre-crisis levels, it seems unlikely that a contained flare-up caused by Greece could plunge the entire currency union into economic turmoil, writes Michael Heise.
Börsen-Zeitung: Target balances and the success of QE
Apr 03, 2015
The Target balances proved to be a reliable crisis barometer in the course of the euro crisis. They allow us to measure the cross-border capital flows between central banks within the eurozone.
Only available in German
FAZ: The ball is now in Greece's court
Mar 23, 2015
Greece has been offered the prospect of further financial aid from the EU in order to ease the country's social hardships. A gesture of solidarity. Now, however, the ball is back in the Greek government's court. To date, it has missed practically all of the targets that it had vowed to meet before the elections.
Focus Online: Ireland - Success built on resolute reforms
Mar 17, 2015
Ireland is back on track after a deep crisis. The savage cuts and reforms implemented since 2009 are working. The economy is enjoying an upswing, employment is rising and the country regained access to the capital markets some while back. All this despite the fact that Ireland was the country hardest hit by the banking crisis.
WSJ: Europe needs pro-growth policies, not stagnation sympathy
Mar 12, 2015
Almost seven years after the Lehman crash, output in the eurozone has yet to return to 2008 levels, 18 million people are looking for a job, and the outlook is mediocre. Policy makers are under intense pressure to revive the region’s economy, yet even diagnosing the problem remains controversial.
Focus Online: Why the Greeks will back down soon
Feb 11, 2015
The situation in Greece is coming to a head. Financial markets have given a clear answer to the new government's plans to slow reforms and fiscal consolidation. Once again, Greece is cut off from the markets, share prices are tumbling and anxious citizens are withdrawing their money from Greek banks, which are entirely dependent on the European Central Bank. Tax payments and investment decisions are being postponed, and the slight improvement in consumer and business sentiment that started in 2014 is at risk of reversing. If Athens and its creditors do not find a solution soon, the painful adjustments that the Greek population has been through in recent years will have been in vain.
FAZ: False hopes in monetary policy
Feb 02, 2015
It is striking: Whereas the ECB’s recent decision to pump more liquidity into the markets is applauded and greeted with relief abroad, in Germany the critics prevail. Is it really wise to place such hopes in the ECB’s expansionary policy, as many Anglo-Saxon financial economists do? I think not. There are weighty arguments that have so far not been convincingly refuted by the acolytes of quantitative easing.
Die Welt: Assistance for Greece
Jan 28, 2015
The clear election victory for the left-wing coalition Syriza has rekindled the debate about yet another debt haircut for Greece. Outside of Greece, too, many feel that a haircut is inevitable with the government debt ratio sitting at 176% of GDP. But these calls for a fresh haircut fail to take a whole number of aspects into consideration, or at least do not give them the importance they deserve.
Shanghai Securities News: China's reform program
Jan 20, 2015
The announced re-adjustment of the Chinese growth model from an export- and investment-driven to a more sustainable consumption-driven approach by the current political leadership under Xi Jinping is highly welcome. However, given the economic, environmental and demographic challenges ahead the most important questions are whether the planned reform measures are far-reaching enough and whether they will be implemented fast enough.
WSJ: QE is the Wrong Fix for Europe
Jan 07, 2015
Speculation is rife that the European Central Bank might announce bold new monetary easing measures at its policy meeting this month, in particular a program to purchase eurozone sovereign bonds, or quantitative easing. The goal would be to expand the ECB’s balance sheet by €1 trillion ($1.21 trillion).
Yet anyone who thinks QE would be the policy that at last jolts the eurozone out of its torpor is in for disappointment. QE is unwarranted. It also would most likely be ineffective.
Jan 01, 2015
2014 was an annus horribilis for savers. Yields on German government bonds kept falling to new lows well below 1 percent and some banks started charging interest on deposits. And there is little sign of improvement on the horizon, on the contrary: If the European Central Bank (ECB) gets serious with its plan to launch quantitative easing, the investment conundrum is likely to get worse.
Only available in German
Versicherungswirtschaft: There is no reason to flood the economy with liquidity