Week in review (18 January)

Tsipras survives confidence vote, looks toward Prespes ratification

As anticipated, the SYRIZA government survived a no-confidence note on Wednesday. Tsipras will look to secure the passage of the Prespes agreement thorough the house by the middle of next week, with Wednesday 23 January being touted as a possible date.

After a meeting of To Potami’s political council yesterday, it appears that Tsipras can rely on the votes of three of its members. Elena Kountoura and Thanassis Papachristopoulos, both formerly of ANEL, are also expected to vote in favour of the agreement while so too is Katerina Papakosta (Independent). This would see the deal pass with 152 votes in favour.

While our base case had been for elections to take place in May, the option of holding off on national elections until autumn is gaining traction within SYRIZA. Two dates which are being touted for an election are 29 September or 13 October.

Brussels greenlights state involvement in Carige bond issue

On 18 January the European Commission’s announced that Italian government plans to provide backing for a bond issue by Carige are in line with State Aid rules.

It is hoped that the state backed bond issuance will attract sufficient demand to plug Carige’s short term capital hole, facilitating a market solution for the bank. It remains our assessment that the ECB will continue to move Carige toward a merger.

Google bracing for DG Comp Adwords fine

Google is currently hoping to draw a line under the long running investigation into its shopping service by changing its configuration.

Even if that probe is successfully closed, it now seems likely that a fine in the separate Adsense investigation will be issued in the coming weeks. While the size of any fine is likely to grab headlines, the true significance of the findings will lie in the extent to which they ask Google to implement changes to its business model.

France ready for ‘no deal’ while banks are moving assets

In the aftermath of Theresa May’s comprehensive defeat, the French government has now triggered its €50 million ‘no deal’ preparedness plan. Including the adoption of legislation from 23 January onwards.

The ECB also expects the financial services companies themselves to trigger their ‘no deal’ contingency plans in the aftermath of the vote.