The Bank of Spain said its indicators showed a "marked weakening" of household consumption and investment in the last quarter. The construction industry, which has been at the forefront of the downturn after Spain's property bubble burst, is still on a "path of contraction", the Bank added. Exports had slowed to almost half the pace registered in the third quarter, and tourist numbers also fell. Slow economic growth will raise concerns that Spain will not be able to meet its target to cut the budget deficit to from 9.2pc of GDP last year to 3pc by 2013. Mr Rajoy has promised to cut Spain's deficit by €16.5bn in 2012 through a series of tough spending cuts as well as banking and labor reforms. Some of the details of his plans will be laid out today following Mr Rajoy's second cabinet meeting. However ...In a real fiscal union where everybody was really committed, Germany would shift some industrial production facilities down into Spain, Italy, and Greece, maybe some automotive production or something similar and would lead with the introduction of Eurobonds so that the entire Euro Zone shared the debt (which actually isnt as high as the USA, UK or Japan) and the economic plight of these southern countries could be greatly alleviated. The simple fact is that its a single currency area in name only, and the hard fast one for all commitment just isn't there. Germany wont put its money where its mouth is. I know Germany cant be blamed and understand the feelings they have against what they feel is a lackadaisical attitude down south, but its the same thing in the UK for Wales and Scotland and in the USA for Mississippi and Louisiana, but the fact is that if Germany isnt willing to share the debt and the wealth, its not a union and by all rights should be immediately disbanded.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, December 30, 2011
The Bank of Spain said its indicators showed a "marked weakening" of household consumption and investment in the last quarter. The construction industry, which has been at the forefront of the downturn after Spain's property bubble burst, is still on a "path of contraction", the Bank added. Exports had slowed to almost half the pace registered in the third quarter, and tourist numbers also fell. Slow economic growth will raise concerns that Spain will not be able to meet its target to cut the budget deficit to from 9.2pc of GDP last year to 3pc by 2013. Mr Rajoy has promised to cut Spain's deficit by €16.5bn in 2012 through a series of tough spending cuts as well as banking and labor reforms. Some of the details of his plans will be laid out today following Mr Rajoy's second cabinet meeting. However ...In a real fiscal union where everybody was really committed, Germany would shift some industrial production facilities down into Spain, Italy, and Greece, maybe some automotive production or something similar and would lead with the introduction of Eurobonds so that the entire Euro Zone shared the debt (which actually isnt as high as the USA, UK or Japan) and the economic plight of these southern countries could be greatly alleviated. The simple fact is that its a single currency area in name only, and the hard fast one for all commitment just isn't there. Germany wont put its money where its mouth is. I know Germany cant be blamed and understand the feelings they have against what they feel is a lackadaisical attitude down south, but its the same thing in the UK for Wales and Scotland and in the USA for Mississippi and Louisiana, but the fact is that if Germany isnt willing to share the debt and the wealth, its not a union and by all rights should be immediately disbanded.
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Mr Schaeuble acknowledged in an interview with business daily Handelsblatt, published on Friday, that major problems remain to be tackled in some countries.
But he was quoted as saying: "I think we will be far enough along in the next 12 months that we will have banished the dangers of contagion and stabilized the eurozone."
Asked whether he could rule out the 17-nation eurozone breaking up, Mr Schaeuble replied: "According to everything that I know at the moment, yes. "Of course, the European Union cannot force anyone to stay in if they don't want to belong any more. But no such development can seen at the moment."
Germany, Europe's biggest economy, is a key player in the long-running battle to stem the eurozone debt crisis. It has backed the strategy of getting governments to embark on often-savage austerity measures to reduce deficits.
But it has opposed measures such as issuing jointly backed eurobonds and argued that there is no quick fix to the crisis, expressing great skepticism about the wisdom of a major government bond-buying drive by the European Central Bank that is advocated by many as a way of forcing down struggling countries' borrowing costs.
UK bonds yields just hit a new record low. In quiet trading, the interest rate on Britain's 10-year government bonds slipped as low as 1.932%. US and German 10-year bonds are trading at even lower yields than gilts, though -- at 1.90% and 1.84% respectively. Italy's yields remain above 7% (all data via Tradeweb).Yields move in inverse proportion to the price of a bond, so low yields indicate that investors are placing a high premium on UK debt [although the rush into safer government bonds also reflects fears of sluggish economic growth, as Larry Elliott explains here].George Osborne has regularly cited Britain's low borrowing costs as proof that his fiscal consolidation plan is justified. David Miller, partner at Cheviot Asset Management, argues that the chancellor is right, saying that:Overall market movements this year have shown Britain to be a beacon of sanity in Europe. We have a stable government with a plan to reduce the deficit, an empowered central bank, and a floating currency. This is not a bad combination for surviving difficult times. No surprises here, the financial system is broken. The growth dependency has hit the buffers of limits of natural resources, particularly non-renewables and especially oil. Denis Meadows and his colleagues flagged this up in 1972 (see below) but the powers-that-be thought they knew better. But since sustainability and (perpetual) growth are mutually exclusive we should be glad and get on with the project of creating a new financial system fit for the 21st century.
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