The fall in borrowing costs since last summer has brought
relief to European sovereign debt markets. The 5.34% yield on Spanish
ten-year sovereign debt is lower than at any point since March; the 4.50%
yield on Italian ten-year debt is the lowest in more than a year. Moreover,
the benefit is not limited to countries in the euro-area. The Hungarian government
can now borrow at less than 7%, compared to more than 8% last July; Polish
ten-year bond yields are now just over 4.2% from just under 5.2%; and the
Czech government borrows at just under 2.0%, compared to a mid-July peak of
close to 3.5%.
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The relaxation of tensions is a good sign, particularly
against a backdrop of weakening economic growth forecasts both in the euro-area and worldwide. Last week, the OECD joined the
chorus of international economic organisations in publishing a sharp downward revision of its estimates for
future economic performance. However, the tensions in European sovereign debt
markets were always only a symptom, not the problem itself. The authors of
the OECD Economic Outlook are clear in asserting that "the euro-area
crisis remains a serious threat to the world economy, despite recent
measures" and go on to allude to a comprehensive reform agenda. The two
questions to consider are whether Europe's politicians have the political
will to push a painful and ambitious agenda, and whether the reforms they
endorse are what is required.
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Smoke ascends after a Syrian military helicopter allegedly dropped a barrel bomb over the city of Daraya on Jan. 31.(FADI DIRANI/AFP/Getty Images) Summary Barrel bombs are not especially effective weapons. They are often poorly constructed; they fail to detonate more often than other devices constructed for a similar purpose; and their lack of precision means they can have a disproportionate effect on civilian populations. However, combatants continue to use barrel bombs in conflicts, including in recent and ongoing conflicts in Africa and the Middle East, and they are ideally suited to the requirements of resource-poor states. Analysis Barrel bombs are improvised devices that contain explosive filling and shrapnel packed into a container, often in a cylindrical shape such as a barrel. The devices continue to be dropped on towns all over Syria . Indeed, there have been several documented cases of their use in Iraq over the past months, and residents of the city of Mosul, which was re...
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