The head of the European Central Bank has warned that the eurozone crisis is
far from over, as unemployment in the currency bloc hit a new high in October.
"We have not yet emerged from the crisis," Mario Draghi said, predicting that
the recovery for most of the eurozone would not begin until the second half of
2013. He urged governments to tighten budgets and implement a banking union to
leave behind a "fairy world" that led to the financial meltdown three years
ago. "The crisis has shown that we were living in a fairy world," he said,
citing the unsustainable debts, weak banks and poor policy co-ordination of the
past. Speaking at a conference in Paris, Christine Lagarde, head of the IMF,
echoed his call for reform, saying: "Banking union seems to us to be the first
priority." The euro strengthened against the dollar after the German parliament
approved the latest €44bn (£36bn) bailout for Greece by a large majority,
despite growing unease about the cost to taxpayers. It is thought the vote will
strengthen Chancellor Angela Merkel, less than a year ahead of federal
elections. Despite the criticism of the plan, only 12 members of her
conservative-led coalition rejected the package – less than had been feared by
party officials. France's finance minister, Pierre Moscovici, hailed the Greek
aid deal as a breakthrough. "It's a turning point for Greece. It's also a
turning point for the eurozone because it helps recreate stability and
confidence. Greece's fate will no longer be a daily issue." But investors said
the celebrations should not be overdone. Jason Conibear, trading director of
Cambridge Mercantile, said: "Certainly the Greek bailout is back on track, and
the immediate prospect of Eurogeddon has receded. But even if the single
currency is not about to come apart at the seams, the eurozone is still stuck in
a deep economic funk." Another 173,000 people joined the jobless queues in the
eurozone in October, pushing the unemployment rate to a record high of 11.7%.
There were stark differences between northern and southern European countries,
with Austria seeing unemployment of just 4.3% compared with Spain's eye-watering
rate of 26.2%. Across the 27 member states of the EU, unemployment also rose,
although to a lower 10.7%.
Access Investments-Building Awareness - European Union-ROMANIA
Monday, December 3, 2012
We have not yet emerged from the crisis...
The head of the European Central Bank has warned that the eurozone crisis is
far from over, as unemployment in the currency bloc hit a new high in October.
"We have not yet emerged from the crisis," Mario Draghi said, predicting that
the recovery for most of the eurozone would not begin until the second half of
2013. He urged governments to tighten budgets and implement a banking union to
leave behind a "fairy world" that led to the financial meltdown three years
ago. "The crisis has shown that we were living in a fairy world," he said,
citing the unsustainable debts, weak banks and poor policy co-ordination of the
past. Speaking at a conference in Paris, Christine Lagarde, head of the IMF,
echoed his call for reform, saying: "Banking union seems to us to be the first
priority." The euro strengthened against the dollar after the German parliament
approved the latest €44bn (£36bn) bailout for Greece by a large majority,
despite growing unease about the cost to taxpayers. It is thought the vote will
strengthen Chancellor Angela Merkel, less than a year ahead of federal
elections. Despite the criticism of the plan, only 12 members of her
conservative-led coalition rejected the package – less than had been feared by
party officials. France's finance minister, Pierre Moscovici, hailed the Greek
aid deal as a breakthrough. "It's a turning point for Greece. It's also a
turning point for the eurozone because it helps recreate stability and
confidence. Greece's fate will no longer be a daily issue." But investors said
the celebrations should not be overdone. Jason Conibear, trading director of
Cambridge Mercantile, said: "Certainly the Greek bailout is back on track, and
the immediate prospect of Eurogeddon has receded. But even if the single
currency is not about to come apart at the seams, the eurozone is still stuck in
a deep economic funk." Another 173,000 people joined the jobless queues in the
eurozone in October, pushing the unemployment rate to a record high of 11.7%.
There were stark differences between northern and southern European countries,
with Austria seeing unemployment of just 4.3% compared with Spain's eye-watering
rate of 26.2%. Across the 27 member states of the EU, unemployment also rose,
although to a lower 10.7%.
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4 comments:
while concerns over the eurozone's survival tend to focus on its indebted members, Europe's monetary union is at risk of losing one of the few members that still enjoys a triple-A credit rating: Finland. Given Finland's difficult domestic political situation, its citizens may look to Denmark and Sweden – which boast rapid growth and low national debt, and do not pay into the European Financial Stability Facility or the European Stability Mechanism – and decide that eurozone membership costs too much and is no longer worthwhile.
Italy and Spain have enough resources to rescue themselves, and to secure the time needed to restructure their economies. Indeed, even after taking on the entire national debt, their private wealth/GDP ratios would still be higher than they are in some northern European countries.
Escaping the euro crisis is less a matter of economics than of political will. By calling upon citizens to finance their own countries' national debts, southern Europe's leaders can fix their own economies and strengthen the European principles of solidarity and subsidiarity.
• Peter Jungen, an entrepreneur and angel investor who has co-founded and invested in many start-up companies, is a member of the governing board of the Institute for New Economic Thinking
I have only one note! The social culture of countries like Portugal,Greece,Spain or Italy would not accept this type of deals because their governments are corrupt and the "private wealth" knows this fact.
We are talking about different social economical areas under the same currency.On my perspective(And I am open to other ideas), only one program which allow these countries to have a "resting time from the euro", to put there public debt in order during a limit time-frame with the surveillance of the ECB, will correct the situation.
Unfortunately Europe does not have politicians with enough "pedigree" to even dare in think in a solution similar to this one or similar to the Peter Jungen idea.
Nevertheless a damn good article.
LONDON—Spanish government bonds closed two weeks of strong trading Friday, leaving Spain and the euro zone in a happy holding pattern that has reduced the immediate need for a bailout of the bloc's fourth-largest economy.
Once-reluctant investors have made cautious bets on Spain, bolstered by a small dose of optimism about economic fundamentals and a strong belief that the European Central Bank is, at long last, serious about backstopping euro-zone governments. The confidence has also helped strengthen Italy's bonds.
"It will be a long process, but we are still confident in the ability of European policy makers to step in ...
Eurozone recession is deepening - economistChris Williamson, chief economist at Markit, warned that the eurozone's manufacturing sector remains in a "severe downturn", following the news that the slowdown eased last month (see 9.44am).
Williamson said:
The ongoing steep pace of manufacturing decline suggests that the region’s recession will have deepened in the final quarter of the year, extending into a third successive quarter.
With official data lagging the PMI, the rate of GDP decline is likely to
have gathered pace markedly on the surprisingly modest 0.1% decline seen in the third quarter.
There is also reason to be optimistic, though:
Production and employment look set to fall at reduced rates in
coming months as export demand slowly revives in markets such as the US and Asia.
However...
the ongoing uncertainty caused by the region’s debt crisis means business confidence clearly remains fragile and companies continue to focus on tight cost control, meaning any robust recovery still looks a long way off and prone to a set-back if the crisis worsens.
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