Exporters demand professionalism from the future government, said Mihai Ionescu, the president of the National Association of Romanian Exporters and Importers (ANEIR). "Our first request is for the future government to be professional. Secondly, we would want for it not to overdo it with social policies. If they do that, meaning if they overdo it with social policies without helping the economy, then I don't see a solid future for this country. The third thing that we are asking for is: «Show some love to Romanian capital!»".  Mihai Ionescu warned that this year, the export growth rate is slower than the growth rate of the GDP. Also, this is the first time when Romanian exports outside the EU are dropping, he added. Another great discontent of the exporters is the elimination of the Foreign Trade Department of the Ministry of the Economy, according to the president of the ANEIR, who stated: "We are disappointed in the fact that the team in the Ministry of the Economy has succeeded in destructuring the Foreign Trade Department. We had a structure that was exclusively in charge of foreign trade. Some people thought we didn't need a department for that. That is not true! The existence of that department is very important. But that is how the technocrats saw fit to help exporters - they have dismantled that structure and they have frozen all departures of those nominated for those positions in the respective embassies. We used to have that kind of representatives in our embassies. This year only a few people went abroad to take those positions and they did so temporarily. Half of Romania's foreign network no longer exists. I am not saying they were geniuses, but we could rely on them. Good or bad, they were there and many of them were useful". Mihai Ionescu also mentioned the fact that the Ministry of the Economy has blocked the promotion of exports, despite the fact that a lot of money has been allocated from the state budget this year. "We have not even achieved half of the program for the promotion of exports planned in the beginning of this year". In this context, businesspeople are going to sue the representatives of the government who are guilty of the things mentioned above, like Mr. Ionescu, who mentioned: "We have decided, together with the representatives of the business sector: this government isn't going to go away just by handing over papers. We are going to take them to court, because they have to pay for what they have done and for what they haven't done. They are appointed and paid by us to help the economy. They are going to be taken to court, through criminal lawsuits, filed by the economic professional associations".

SIF Oltenia has announced that it has brought two lawsuits against Banca Comercială Română: "- a request to bring an action for annulment of the Decision of the Extraordinary General Meeting of BCR of November 23rd, 2016, which is the object of the case no. 45844/3/2016; - a request for intervention which is aimed at rejecting the request for authorization of the merger approved by the Extraordinary General Shareholder Meeting of BCR of November 23rd, 2016, which is the object of case no. 44243/3/2016 which will have the first hearing on January 17th, 2017. Defendants: BCR, BCR Real Estate Management SRL (REM) and Bucharest Financial Plazza SRL (BFP)". The merger between BCR, REM and BFP represents a necessary operational simplification, given the fact that BCR is a majority shareholder in both entities, as its holdings are near 100%, and the two companies conduct their commercial activities through BCR, according to bank officials, who gave us the following statement: "The activities of the two subsidiaries will be internalized, and the merger will have a significant contribution to simplifying the structure of the BCR group and corporate governance". Law no. 31/1990 of companies allows shareholders who did not vote in favor of a spinoff or merger decision to exit the company and to ask the company to buy their shares, in which case their shares will be evaluated by an independent evaluator.  SIF Oltenia is the only one of the SIFs that has remained a shareholder of BCR, with a stake of 6.3%, after the other SIFs made their exit in 2011, following deals with Erste Bank, the majority shareholder of the bank. SIF Oltenia values its stake in BCR at 439.05 million lei, according to the report of September 30, 2016. In its 2016 strategy, SIF Oltenia has announced that it is still willing to negotiate with investors interested in its BCR stake, in order to get an attractive offer. "In the event such a negotiation is completed, we will summon the General Shareholder Meeting in order to put the deal up for approval - according to art. 241 (1) of the law 297/2004 - that stake exceeds 20% of the total assets, less receivables", SIF Oltenia wrote, and added: "We need to remind that BCR has ended 2015 very profitably, meaning that the chances of selling this stake in good circumstances have seen a good evolution".  Bucharest Financial Plazza SRL owns the BCR building of Calea Victoriei (the former Bancorex headquarters). The office building has been inaugurated in 1997, is 83 high, has 18 floors and a surface of approximately 31,000 sqm. 

European Union council president, Donald Tusk, called on the authorities in Poland to respect the constitution as a standoff between the opposition and the ruling party continued.  Polish opposition leaders called for days of anti-government protests and pledged to keep blocking parliament’s main hall after being accused of trying to seize power illegally by a government they say has violated the constitution.   Several thousand people protested in Warsaw and other cities after police broke up a blockade of the parliament building in Warsaw in the early hours.   “Following yesterday’s events in parliament and on the streets of Warsaw … I appeal to those who have real power for respect and consideration of the people, constitutional principles and morals,” Tusk told a news conference in Poland’s western city of Wrocław....Protesters had blocked all exits from the parliament on Friday after the opposition said PiS politicians illegally passed the budget for next year by moving the vote outside of the main chamber of parliament.  The protest marked the biggest political standoff in years in EU member Poland and the sharpest escalation of the conflict between the opposition and the ruling Law and Justice (PiS) party since it came to power in October 2015.  The police attempted in the early hours of Saturday to remove protesters by grabbing them and pulling them aside, but stopped as new protesters arrived at the scene. The police also called on protesters blocking the parliament to disperse, saying on loudspeakers that they might otherwise use force

Forecasts made by investment banks such as Goldman Sachs, JP Morgan and Barclays Capital are only marginally better than flipping a coin, and if you hold on to their “hot picks” longer than a few months you will almost certainly lose money, according to new research. Intertrader, a spread betting firm, examined stock predictions from so-called (and highly paid) gurus at 16 investment banks, tracked them over the following 12 months and compared them to the returns on just putting your money into a savings account or a stock market index such as the S&P 500 on Wall Street. “Investment banks’ recommendations are only marginally better than a coin flip,” says Intertrader. “The banks we looked at only managed to predict the correct direction their hot picks would go 55% of the time. And that is actually the kindest we could be – holding their predictions for longer just meant worsening results.” Investors who bought and sold an investment bank recommendation within 30 days on average made a gain of just 0.8%. If they held it for 90 days, it moved to a loss of 1.48%, while over a year the average loss from buying an investment bank recommendation was 4.79%. “We found that if you put the money you would have invested in a 3% high-interest bank account instead, your returns would generally be higher,” says Intertrader, which has created a Gurudex index that analyses investment banks. The firm says the findings serve as a reminder of Warren Buffett’s words of advice on the value of stock market forecasters: “We have long felt that the only value of stock forecasters is to make fortune-tellers look good. Even now, Charlie [Munger] and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grownups who behave in the market like children.”

The FTSE 100 index of Britain’s biggest stock market-listed companies has enjoyed its strongest year since 2009, jumping from 6,137 at the start of the year to touch nearly 7,000 this week. Wall Street’s S&P 500 has hit record highs, with British investors gaining even more in sterling terms because of the fall in the currency. This has meant that some of the biggest funds popular with small investors – such as M&G’s £6.3bn Global Dividend – have made gains of nearly 40% over the past year. But not everyone has shared in the party. The single biggest fund in the UK, Standard Life’s £26.3bn Global Absolute Return Strategies, has managed to lose money when almost everyone else has been coining it. The fund is down 3.3% over the past 12 months, compared with the 17% gain made by UK index-tracking funds over the same period. Star fund manager Neil Woodford has also had a poor year, making just 2.7% over the past 12 months for investors in his popular £9.2bn equity income fund.  The prize for the best performance of any fund in the UK goes to the little-known JFM Gold, which has given investors a return of 128% over the past year. Unfortunately, it’s only a £20m minnow, so we took a look at the big funds instead. M&G Global Dividend performed best, rising 39.4%, while Fundsmith Equity was up 28.2%. Both are heavily invested in Wall Street-listed stocks, which have rocketed in sterling terms. For example, Microsoft (a big holding in both funds) was trading at $54.80 at the start of the year and was $63.14 this week – a rise of 15%. But in sterling terms that translated into £37.27 at the beginning of the year, and £49 now – a rise of 31%. While the post-Brexit plunge in sterling will make holidays more expensive for everyone in 2017, it has turbo-charged returns for pension and Isa holders with investments in big US companies.

The US Federal Reserve has raised interest rates for only the second time in a decade.
Janet Yellen, the chairman of the Fed, described the move as “a reflection of the confidence we have in the progress that the economy has made and our judgment that progress will continue”.  But with “considerable uncertainty” surrounding the economic outlook, how is Donald Trump’s election as US president likely to shape the path of interest rates?   After the financial crisis, the Fed slashed rates close to zero in a bid to support economic activity and prevent a bigger rise in unemployment.
It kept them there until December 2015, when it raised its target range to between 0.25pc and 0.5pc.

Back then, policymakers signalled that four more interest rate rises were on the way if world events turned out as they predicted.  They didn't.  At the start of 2016, stock markets were rocked by fears over the Chinese economy, and policymakers opted to keep rates unchanged, noting that they were "closely monitoring global economic and financial developments".  The Brexit vote in June also caused concern among policymakers.  Even before the vote, policymakers noted that "the upcoming British referendum on membership in the European Union could generate financial market turbulence that could adversely affect domestic economic performance." While the Fed's mandate states that policymakers must "promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates" in the US, global events matter.  The US presidential election also gave policymakers reasons for pause.  At the start of last month, they judged that "the case for an increase in the federal funds rate [ie. interest rates] has continued to strengthen but [we] decided, for the time being, to wait for some further evidence of continued progress toward its objectives."  While the UK voted for Brexit and the US voted for Donald Trump, the market reaction has been relatively calm.Investors are now expecting a mini-economic boom in the US and have pulled cash out of bonds and emerging markets and into US equities. Following last night's announcement, yields on two year Treasury bonds climbed to a seven-year high on expectations of faster rate hikes.
Implied borrowing costs across Europe also ticked higher, with UK benchmark 10-year gilt yields

In the future, Romania may not receive funding from international organizations such as the IMF or the EU.  "There are no guarantees that the IMF, EU or other supra-national or international organizations will make available to Romania similar financing programs in the future. Both the current account and the budget deficit are rising. If these deficits are going to require the availability of future financing, Romania may pass additional measures that could hinder economic growth". NBR officials declined to comment on the statements included in the MedLife IPO prospectus. Last month, Lucian Croitoru, advisor to NBR governor Mugur Isărescu, warned that Romania was closer than one may think "either to an adjustment towards its potential, or towards recession", if the adjustments aren't made on time.  He wrote, on the NBR blog, that the monetary policy is more relaxes than intended, and the "relaxed fiscal policy has generated a fiscal impulse which stimulated the economy more than would have been implied by the negative amount of the GDP gap". This process whereby the VAT cuts and salary increases stimulate other countries' economies cannot last, and the inflation driven exclusively by demand will increase,  Mr. Croitoru said. He added: "In that context, the measures from 2016, to cut VAT by 4 percentage points together with the significant increase of wage expenditures, are not sustainable. They are putting pressures on the current account deficit and on inflation".  This year, NBR governor Mugur Isărescu has warned on several occasions against the fiscal relaxation measures passed together with salary increases in an electoral year. 

Russia’s Central Bank expects the crude glut on the global market to persist till 2017, according to the regulator’s report on monetary policy quoted by Tass. Oil price will decline to about $40 per barrel in 2016 and remain on this level in 2017-2019, the bank said. “The estimates of the supply and demand balance on the global crude market have not changed significantly, the surplus of oil supply is expected to persist till 2017. Taking this into account, the Bank of Russia has kept its base case forecast of Urals crude oil price by the end of 2016 at the level of $40 per barrel,” the report said.

A possible decision to freeze oil production by the exported countries will not have a significant effect on the demand/supply balance on the global oil market or oil price, the report said.  “The negotiations on freezing oil production among OPEC countries and some large exporters outside the organization are unlikely to have a lasting effect on market conditions. This would be possible only if the parties have agreed on direct reduction of production in comparison with current levels, but such an outcome is very unlikely. A more likely solution – setting production and exports at the levels close to the current ones – will not significantly affect the demand/supply balance on the global oil market,” the report said.  Earlier, Saudi Arabia and Russia’s energy ministers singed a joint statement aimed at stabilizing the crude market on the sidelines of the G20 Summit. The Ministers recognized the importance of maintaining the ongoing dialogue about current developments in oil and gas markets and indicated their mutual desire to further expand their bilateral relations in energy.  Russian Energy Minister Alexander Novak told reporters that Russia and Saudi Arabia are going to discuss freezing oil production for 3 or 6 months, maybe more.  The 15th International Energy Forum (IEF15) will be held in Algiers on September 26-28, 2016. According to the media, oil exporter countries might discuss freezing of oil production. Venezuela, Ecuador and Kuwait were the initiators of the discussion.

Economists at major City investment banks have cancelled forecasts of a Brexit-inspired recession amid fresh data showing the economy performing more robustly than expected. Britain’s trade deficit narrowed significantly in July, as exports increased by £800m to £28.4bn, while imports fell by £300m to £36.6bn. Construction output was also steady in July, faring better than expected a month after the Brexit vote. Goldman Sachs, Morgan Stanley and Credit Suisse are among the major banks that have now withdrawn earlier predictions that Britain is likely to enter recession. Other major banks had forecast a “technical recession” with GDP possibly going negative for two quarters later this year or next. Morgan Stanley initially forecast the economy going negative by 0.4% in the third quarter of 2016, but this week changed that to expectations of 0.3% growth. It said: “We’ve ‘marked-to-market’ our growth forecast from a sharp slowdown and Brecession, to a lesser slowdown, which narrowly avoids a technical recession.”  In the days after the vote, Goldman Sachs slashed its growth forecast for the UK by 2.5% over two years. Its chief European economist, Huw Pill, said on 27 June that there would be “a steep fall in activity” as he predicted a “mild recession by early 2017”.  Pill said this week: “The downturn in the UK – while still substantial – is likely to be shallower than we thought in the immediate aftermath of the referendum.” Goldman Sachs is now pencilling in UK growth of 0.9% in 2017.

Eurostat has issued a publication to inform regarding the unemployment rate in Euro area for July.The euro area (EA19) seasonally-adjusted unemployment rate was 10.1% in July 2016, stable compared to June 2016 and down from 10.8% in July 2015. This remains the lowest rate recorded in the euro area since July 2011. The EU28 unemployment rate was 8.6% in July 2016, stable compared to June 2016 and down from 9.4% in July 2015. This remains the lowest rate recorded in the EU28 since March 2009. These figures are published by Eurostat, the statistical office of the European Union.  Eurostat estimates that 21.063 million men and women in the EU28, of whom 16.307 million were in the euro area, were unemployed in July 2016. Compared with June 2016, the number of persons unemployed decreased by 29 000 in the EU28 and by 43 000 in the euro area. Compared with July 2015, unemployment fell by 1.688 million in the EU28 and by 1.034 million in the euro area.

Member States

Among the Member States, the lowest unemployment rates in July 2016 were recorded in Malta (3.9%) as well as in the Czech Republic and Germany (both 4.2%). The highest unemployment rates were observed in Greece (23.5% in May 2016) and Spain (19.6%).  Compared with a year ago, the unemployment rate in July 2016 fell in twenty-four Member States, remained stable in Denmark, while it increased in Estonia (from 6.1% to 7.0% between June 2015 and June 2016), Austria (from 5.7% to 6.0%) and Belgium (from 8.1% to 8.3%). The largest decreases were registered in Cyprus (from 15.0% to 11.6%), Croatia (from 16.5% to 13.2%) and Spain (from 21.9% to 19.6%). In July 2016, the unemployment rate in the United States was 4.9%, stable compared to June 2016 and down from 5.3% in July 2015.

Youth unemployment

In July 2016, 4.276 million young persons (under 25) were unemployed in the EU28, of whom 2.969 million were in the euro area. Compared with July 2015, youth unemployment decreased by 310 000 in the EU28 and by 136 000 in the euro area. In July 2016, the youth unemployment rate was 18.8% in the EU28 and 21.1% in the euro area, compared with 20.2% and 22.1% respectively in July 2015. In July 2016, the lowest rates were observed in Malta (7.1%) and Germany (7.2%), and the highest in Greece (50.3% in May 2016), Spain (43.9%) and Italy (39.2%).

Geographical information

The euro area (EA19) includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. The European Union (EU28) includes Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden and the United Kingdom.

Methods and definition

Eurostat produces harmonised unemployment rates for individual EU Member States, the euro area and the EU. These unemployment rates are based on the definition recommended by the International Labour Organisation (ILO). The measurement is based on a harmonised source, the European Union Labour Force Survey (LFS).

Based on the ILO definition, Eurostat defines unemployed persons as persons aged 15 to 74 who:
- are without work;
- are available to start work within the next two weeks;
- and have actively sought employment at some time during the previous four weeks.

The unemployment rate is the number of people unemployed as a percentage of the labour force. The labour force is the total number of people employed plus unemployed. In this news release unemployment rates are based on employment and unemployment data covering persons aged 15 to 74. The youth unemployment rate is the number of people aged 15 to 24 unemployed as a percentage of the labour force of the same age. Therefore, the youth unemployment rate should not be interpreted as the share of jobless people in the overall youth population.

Country notes

Germany, the Netherlands, Austria, Finland, Sweden and Iceland: the trend component is used instead of the more volatile seasonally adjusted data.  Denmark, Estonia, Hungary, Portugal, the United Kingdom and Norway: 3-month moving averages of LFS data are used instead of pure monthly indicators.

Wall Street drew two conclusions from the news that the US jobs engine shifted down into a lower gear last month. The first – that a September increase in interest rates is now a non-starter – was almost certainly right.  Putting up the cost of borrowing so close to the presidential election in early November always looked like an outside bet. It would have taken thunderously good figures for job creation to have persuaded the more dove-ish policymakers at the Federal Reserve to move, and the ones released on Friday were average at best.  To be sure, the August non-farm payrolls have come in worse than expected for the past decade, suggesting that there might be some problem with the way the raw data is seasonally adjusted. What’s more, the two previous months – June and July – saw strong increases in demand for labour, so the three-month average for non-farm payrolls is running at a healthy 200,000. That could persuade some of the hawks at the Fed to move, but they will not be able to muster a majority. The second conclusion drawn by Wall Street is more questionable. That is the assumption that the rate rise some analysts had pencilled in for September has now simply been put back to a later date. Some economists believe the Fed won’t waste any time once US voters have chosen who will be Barack Obama’s successor at the White House; some think the central bank will wait until March next year. There is, though, a different way of looking at the numbers. For most of this year, the strength of the US labour market has been at odds with data showing the economy growing only slowly. Sooner or later, the theory went, growth would accelerate and come into line with employment numbers, so justifying higher interest rates.

Hiring in the US slowed in August following a summer surge in a sign that the Federal Reserve will hold off on raising interest rates this month. Employers added 151,000 staff to their payrolls last month, according to the US Labor Department. This was below the 180,000 expected by analysts, and down from an upwardly revised increase of 275,000 in July. The steady jobs growth kept the unemployment rate at 4.9pc. Economists expected the rate to fall to 4.8pc.  The dollar fell against the pound and the euro after the data were released, while traders reduced their bets on a September rate hike.  Financial markets now believe there is a 26pc that the Fed will raise rates this month, down from 34pc just before the jobs data were released.  The probability of a rate hike this year fell to 56pc, from 60pc.... Janet Yellen, the chairman of the Federal Reserve, said last week that she believed that the case for raising interest rates in the world’s largest economy was strengthening. Stanley Fischer, vice chairman of the Fed, signalled that two rate increases were possible, though Ms Yellen and Mr Fischer stressed that any move up from the current federal funds target of between 0.25pc and 0.5pc would depend on the data they saw. The average monthly jobs gain over the past 12 months has been 204,000.  Separate US data showed the trade deficit narrowed in July as exports rose to their highest level in 10 months.  This suggests economic growth picked up at the start of the third quarter following annualised growth of 1.1pc in the second quarter.

France has a host of home-grown economic woes that have nothing to do with the EU. The social model is funded by punitive taxes on employing labour, creating one of the worst 'tax wedges' in the world.  A quarter of French aged 60-64 are in work – compared with 40pc for the OECD average – due to early retirement incentives. The state consumes 56pc of GDP, a Nordic level without Nordic labour flexibility.  There are 360 separate taxes, some predating the revolution. Trade unions have a legal lockhold on companies with over 50 employees, yet command 7pc of membership. "It is an inferno that sadly lacks the poetry of Dante," says Prof Brigitte Granville, a french economist at Queen Mary University London.

Hard reforms were put off by leaders of all parties. They coasted through the boom years of the euro, and now it is too late. France is trapped within the straight-jacket of monetary union. The International Monetary Fund's health check in June said the 'real effective exchange rate' is up to 9pc overvalued. It is roughly 16pc overvalued against Germany. The only practical way France can claw back competitiveness is through deeper deflation than in the rest of the eurozone, but this would prolong the slump and play havoc with nominal GDP and debt dynamics. It would be self-defeating.

 

Oil has finally found a strong bull in Savita Subramanian, commodity strategist at BofA Merrill Lynch, who believes oil will rally to $54 a barrel by this year-end and continue its march higher to touch $69 a barrel by June of next year.  The commodity team led by Savita has upgraded the energy sector to outperform. The analysts have added Devon Energy to the firm’s US 1 list and raised ratings on four other stocks.  “Oil production continues to fall as global oil & gas investment has been cut by nearly $300bn (41%) and rig counts have dropped by 37% since the 2014 peak. In contrast, low oil prices continue to drive healthy demand growth, putting the oil market on pace to see its biggest supply-demand deficit since 2011,” the report noted. They estimate the shortfall to last through 2020, if prices remain below $80 a barrel.  The firm has raised the outlook for the energy sector from marketweight to overweight considering the following factors.

Elderly Germans may have to keep working until the age of 69 if a Bundesbank proposal is adopted.

It says Berlin should consider raising the retirement age to that level by 2060, from around 65 at the moment.  The central bank says that otherwise the country may struggle to honour its pension commitments. It points out that the state pension system is in good financial health at present, but will come under pressure in coming decades. The Bundesbank says that as baby-boomers - those born in the post-World War Two period - retire, there will be fewer younger workers to replace them.. The retirement age for Germans is set to rise gradually to 67 by 2030.  However, the bank believes that from 2050 this increase will not be enough for the German government to keep state pensions at their target level of at least 43% of the average income.  It is therefore proposing pushing the retirement age up to 69.  "Further changes are unavoidable to secure the financial sustainability (of the state pension system)," the Bundesbank said in its monthly report.  But German government spokesman Steffen Seibert said they stood by retirement at 67.  "Retirement at 67 is a sensible and necessary measure given the demographic development in Germany. That's why we will implement it as we agreed - step by step," he added.

Britain’s economy will slow down but should not go anywhere close to a recession, according to economists at credit ratings agency Moody’s, while growth in the rest of the world is also “stabilising.” Although markets dived on the referendum result in June, stock prices have recovered and now economists also believe the impact of the vote will be relatively modest, compared with some early fears.  The lower pound should support economic growth in the UK, Moody’s said, while the government is expected to loosen the purse strings to shore up GDP.

Moody’s economists predict growth of 1.5pc this year and 1.2pc in 2017.

 

SAN FRANCISCO — Cisco Systems, the computer-networking giant that is in the midst of a major technological pivot, on Wednesday said it will eliminate up to 5,500 jobs.

The job reduction is Cisco's second major one in two years. The San Jose, Calif.-based company laid off 6,000 in a restructuring in 2014.  The Silicon Valley company announced the cuts — about 7% of its global workforce — during its fiscal fourth-quarter earnings report. Sluggish spending by corporations and telecom carriers on network switches and routers, Cisco's big moneymakers, have prompted it to shake up staff ranks as it turns toward other fields, such as cloud computing.  The news sent Cisco shares (CSCO) down 1%, to $30.36, in after-hours trading.

Cisco slightly beat analysts’ estimates with a quarterly profit of $2.8 billion, or 56 cents a share, on revenue of $12.64 billion, off 1.6% from a year ago. Adjusted profits would have been 63 cents. Analysts surveyed by FactSet predicted adjusted earnings of 60 cents a share on revenue of $12.57 billion.

Mehmet Simsek, the deputy prime minister, tried to dispel fears on Thursday that the country would return to the deep repression seen the last time it was under similar measures. "The state of emergency in Turkey won't include restrictions on movement, gatherings and free press, etc. It isn't martial law of 1990s," he said. "I'm confident Turkey will come out of this with much stronger democracy, better functioning market economy and enhanced investment climate." But as he made his statement, the crackdown spread to journalists and human rights lawyers. Orhan Kemal Cengiz, a leading newspaper columnist and lawyer, was arrested at the airport as he tried to leave the country.  Police also raided the printing house of well-known satirical magazine Le Man...On Thursday, Austria became the first country to take diplomatic action over the crackdown, saying it would summon Turkey's ambassador to discuss Ankara's "increasingly authoritarian" behaviour and allegations it had been behind recent Turkish protests in Vienna. Meanwhile, the UK’s Foreign Affairs Committee said it was to launch an inquiry into Britain’s relations with Turkey and the impact of the crackdown on democracy and human rights.

 Ever since the announcement of the new stress test, in February 2016, the EBA has stated that "passing requirements are not included, because the objective of the test is to use it as a supervision instrument, and the results will be discussed individually with the participating banks, where actions for improving the situation will also be proposed".  The methodology for assessing the solvency as part of the stress test is found on the official website of the EBA, www.eba.europa.eu and should at least engender a minimum of faith among investors when it comes to the banks' abilities to deal with non-performing loans and capitalization deficit. Unfortunately, a general state of "fatigue" seems to have taken place in the Eurozone, amid the waiting in vain for the results promised by the central banks and governments. According to Reuters, amid the disputes between the European and Italian authorities, concerning the initiation of a new bail-out program for Italian banks, but without the prior application of the bail-in procedure, Mario Draghi, the president of the ECB, has expressed his support for the governmental aid offered to Italian banks, because "such a program will allow them to sell some of their non-performing loans, which reduce their lending ability". But is such a "release" of Italian banks' lending capability rational and prudent, when the current volume of non-performing loans shows that they are incapable of correctly evaluating risks?  In the recent meeting of finance ministers of the G20 countries, Pier Carlo Padoan, Italy's finance minister said that "we are going in the right direction and there are no risks when it comes to systemic stability", according to an article in Financial Times. Padoan also rejected the possibility of a bail-in, as he said that such a measure would not be necessary.

When oil analysts look at the markets to try to get a sense of where oil prices are heading, one of the great unknowns, at least in the U.S. shale industry, is the large volume of drilled but uncompleted wells (DUCs). As oil prices began collapsing two years ago, shale drillers increasingly decided to defer the completion of their drilled wells, hoping to wait out the downturn and bring production online at a later point when prices rebounded.  But with oil prices suffering from a prolonged downturn, the DUCS began to mount, leaving a huge backlog of potential production that was yet to come online. From the point of view of the nascent and fragile oil price recovery (or more accurately, several cycles of recovery in the past year or so), the DUCs threatened to kill off the price rally, as they would bring a flood of new production online right when prices rose high enough.  However, it appears that the “fracklog” is already getting worked through. According to Bloomberg Intelligence, the number of DUCs stopped rising in the first quarter of this year.

EU Commission president Jean-Claude Juncker appointed former French commissioner for financial services as chief negotiator in charge of negotiations with the UK. Michel Barnier, a 65-year old former French minister and vice-president in the previous Commission between 2010-14, was in charge of the internal market and services.  He sought the job of EU Commission president in 2014, but the task was later given to Juncker, his rival in the conservative European People's Party.   Barnier said in a tweet that he was “honoured to be entrusted” with the post.  He added: "Rendez-vous for beginning of demanding task on 1 October." His official title will be "chief negotiator in charge of leading the Commission Taskforce for the Preparation and Conduct of the Negotiations with the United Kingdom" under Article 50 of the Lisbon Treaty. The UK has not yet triggered the exit procedure under Article 50, and British prime minister Theresa May suggested it is unlikely the UK will launch the process before the end of the year. Michel Barnier will report directly to Juncker and will have a team of experts at his disposal.  He will be regularly invited to the the meeting of the commissioners to brief the college on the negotiations. Juncker said he wanted "an experienced politician for this difficult job", adding: "Michel is a skilled negotiator with rich experience in major policy areas." Most of the negotiations are nevertheless expected to be done by the council, representing member states.  They will have to navigate through the difficult two-year negotiations and find a balance between the UK's access to the single market in exchange for some level of freedom of movement from and within the bloc.  Barnier's France has been urging for a tough exit deal for Britain, as French president Francois Hollande faces challenge ahead of next year's presidential elections from far-right leader Marine Le Pen, who wants France to hold a referendum on its membership.