The following is a list of key events (and commentary) to watch over the next two months. From Germany's voting phases for Greek aid to various national strikes and regional elections, there's plenty here of critical importance to the future of the sovereign debt crisis.
Start-November: ESM ready to make financial commitments. After the first board meeting on 8 October, ESM Director Klaus Regling said the new fund would be available to make financial commitments to Spain’s bank recapitalisation programme from the start of November.
3 November: Dutch PvdA (Labour) Party votes on coalition agreement with VVD (Liberal) party.
3-5 November: G20 Finance Ministers and Central Bank Governors. Meet in Mexico.
5 November: Greek MoU amendments to be submitted to parliament. This are the austerity measures and structural reforms to unlock the next tranche payment.
6-7 November: Greek public and private sector unions hold 48 hour strike against austerity.
6 November: US presidential election.
6 November: Greece auction. Bills.
7 November: Greece to vote on austerity and reforms. This is required to unlock the EUR31.5bn next tranche of the second bailout programme.
7 November: Greek 2013 Budget to be submitted to parliament.
7 November: European Commission Economic Forecasts. Autumn update.
8 November (tbc): Special Eurogroup meeting on Greece. This will be dependent on Greece having approved the austerity and reforms.
8 November: ECB Governing Council meeting. We do not expect any changes, whether to standard (rates) or non-standard (liquidity, asset purchases) policies. The question for the ECB is whether the dichotomy between improving bank funding and deteriorating economy prospects merely reflects lags in the transmission of financial conditions to economic conditions or whether it reflects a more worrying break in the relationship. For now, the ECB can afford to be patient, in our view. Since the ECB Council claims to expect a ‘gradual’ recovery in 2013, we would not expect them to reject their assumptions on the back of the marginally weaken Q3 bank lending survey alone.
8 November: Spain auction. Bonds.
10 November: VVD-PvdA (Liberal-Labour) government ought to assume power in the Netherlands.
11 November: Greek 2013 Budget to be voted on in parliament.
12 November: Merkel visits Portugal.
12/13 November: Eurogroup/ECOFIN finance ministers’ meetings. Chances are EU finance ministers will still be discussing how to finance an extension of the Greek loan programme. The aid programme for Cyprus could also be approved. This may also be an important date in terms of Spain’s potential request for a precautionary programme, which could lead to the activation of the ECB’s OMT.
13 November: Italy auction. Bills.
13 November: Greece auction. Bills.
14 November: Portuguese strike. The CGTP (General Confederation of Portuguese Workers), the largest trade union confederation in Portugal, is to stage a strike against the government’s austerity measures.
14 November: Italy auction. Bonds.
15 November: Q3 GDP reports. Eurostat will publish the flash estimate of euro area GDP growth for Q3 2012. Our current estimate is -0.3% qoq.
19-20 November: ECB workshop on excess liquidity and money market functioning. ”The workshop organised by the ECB intends bringing together central bankers, practitioners and academics to discuss the current state of health of money markets, the impact on their functioning of the recently implemented non-standard measures and the possible side effects of large amounts of excess liquidity currently present in many developed economies” (European Commission). The market will watch this closely for any suggestions about the operations of the OMT and/or prospects for policy rates to fall into negative territory.
20 November: Spain auction. Bills.
21 November: Spain auction. Bonds.
22-23 November: EU Leaders’ Summit. Officially to discuss the EU Budget for 2014-2020, but also an occasion to address crisis policies (including Greece, Spain and Cyprus if necessary). Following the UK parliament’s rejection of the Cameron government position of a real-term freezing of the EU budget at worst — the opposition and rebels wanted a real terms cut — it is unlikely the EU will yet reach a comprehensive agreement on the new Budget.
25 November: Catalonia regional election. Early elections for the parliament of the autonomous region called by Arturo Mas, head of the Catalan regional government.
25 November: Italy centre-left primaries, first round. The centre-left coalition led by the Italian Democratic Party (PD) is due to elect a leader for the Italian parliamentary elections to be held no later than April 2013. PD’s incumbent leader Pierluigi Bersani looks to be the favourite with Matteo Renzi, the Mayor of Florence, likely to be his main challenger. Nichi Vendola, the governor of Puglia and leader of the junior coalition party SEL5, is the other prominent candidate. The first round is due to be held on 25 November. Should no candidate secure 50% of the vote, a second round run-off will be held on 2 December. PD is currently leading in the opinion polls with 25%-29% support in the opinion polls held in October.
27 November: Spain auction. Bills.
27 November: Italy auction. Bonds.
28 November: Italy auction. Bills.
29 November: Italy auction. Bonds.
2 December (tentative): Italy centre-left primaries, second round. See 25 November entry.
3-4 December: Eurogroup/ECOFIN meetings. The regular meeting of the euro area 17 finance ministers followed by the EU 27 ministers.
4-6 December: German SPD Annual Party Conference.
5 December: Spain auction. Bonds.
5-7 December: German CDU Annual Party Congress.
6 December: ECB Governing Council meeting, followed by the interest rate announcement and press conference.
9 December: German SPD Party Special Conference to elect challenger for 2013 federal elections.
11 December: Spain auction. Bills.
12 December: Italy auction. Bills.
13-14 December: European Council summit. The final gathering of 2012 of the EU 27 heads of state and Government. One intention is to sign off on the legislation embodying the common bank supervisory regime under the ECB.
13 December: Spain auction. Bonds.
13 December: Italy auction. Bonds.
16 December (tentative): Italy PDL primaries. The centre-right Italian People of Freedom (PDL) party is planning to hold primaries to select its leader for the upcoming Italian parliamentary elections to be held no later than April 2013. The party was previously led by ex-Prime Minister Silvio Berlusconi, who announced on 24 October that he would not be running in the PDL primaries and would not be seeking re-election as Prime Minister.
18 December: Spain auction. Bills.
27 December: Italy auction. Bills.
28 December: Italy auction. Bonds.
Source: Deutsche Bank