GERMANY - Timmermans these days is having to exercise his utmost diplomatic skill in order to avoid an escalation of tensions. When, during a visit to Amsterdam on Thursday, Timmermans was asked about the Polish foreign minister's jibe, he could have struck back. But there is already enough tension, so he chose to take a different tack, instead praising the transformation of Eastern European countries from socialist dictatorships to free societies. But, he added, true democracies include two important elements: the protection of human rights and adherence to the rule of law. The fact that Timmermans had to utter something that obvious says a lot about the current state of the European Union -- and developments in Poland. In less than two months, the country's new nationalist-conservative government has succeeded in disempowering the constitutional court, passing a law establishing government control over public broadcasting and installing party-aligned political appointees at the head of its intelligence services. "We want to cure our country of a few illnesses," Foreign Minister Waszcykowski told Germany's tabloid Bild earlier this month.
Thursday, January 21, 2016
Saturday, April 5, 2014
Medium-sized and small firms in China are continuing to struggle to grow, adding to concerns that the Chinese economy is losing steam.
HSBC's China manufacturing PMI survey, which focuses on smaller private companies, showed that activity contracted for the third month in a row in March, at the fastest rate in eight months.
It fell to just 48.0 in March, down from 48.5 in February, showing "a moderate deterioration of the health of the sector". Any reading under 50 shows a contraction, and this is the biggest fall since July 2013.
Firms reported that output and new orders both fell, at a faster rate, while workforce numbers also fell. The survey suggests that China's domestic economy is still cooling, as new business from abroad rose for the first time in four months.
Hongbin Qu, chief economist at HSBC, argued that China's government needs to take further stimulus measures soon:
“The final reading of the HSBC China Manufacturing PMI in March confirmed the weakness of domestic demand conditions. This implies that 1Q GDP growth is likely to have fallen below the annual growth target of 7.5%. We expect Beijing to fine-tune policy sooner rather than later to stabilize growth.”
Here's the details: Key points
- Both output and new orders contract at faster rates...
- ...while new export orders return to growth
- Input costs and output charges both fall sharply
Confusingly, the 'official' Chinese PMI survey was a little more positive - inching higher to 50.3 in March from 50.2 in February. That may show that the biggest Chinese firms, and those under state control, are performing better.
But economists had hoped to see a stronger reading, as the disruption caused by the Chinese new year fades away.
IG's Evan Lucas explained:
The March read was the first read free of the Chinese Luna New Year and despite the constant expansion there are weaknesses across the domestic sector, seeing price and output contracting.
Tuesday, January 7, 2014
The global economy had another difficult year in 2013. The advanced economies' below-trend growth continued, with output rising at an average annual rate of about 1%, while many emerging markets experienced a slowdown to below-trend 4.8% growth.
After a year of subpar 2.9% global growth, what does 2014 hold in store for the world economy?
The good news is that economic performance will pick up modestly in both advanced economies and emerging markets.
The advanced economies, benefiting from a half-decade of painful private-sector deleveraging (households, banks, and non-financial firms), a smaller fiscal drag (with the exception of Japan), and maintenance of accommodative monetary policies, will grow at an annual pace closer to 1.9%.
Moreover, so-called tail risks (low-probability, high-impact shocks) will be less salient in 2014.
The threat, for example, of a eurozone implosion, another government shutdown or debt-ceiling fight in the US, a hard landing in China, or a war between Israel and Iran over nuclear proliferation, will be far more subdued.
Still, most advanced economies (the US, the eurozone, Japan, the UK, Australia, and Canada) will barely reach potential growth, or will remain below it.
Households, banks and some non-financial firms in most advanced economies remain saddled with high debt ratios, implying continued deleveraging.
High budget deficits and public debt burdens will force governments to continue painful fiscal adjustment. And an abundance of policy and regulatory uncertainties will keep private investment spending in check.
The outlook for 2014 is dampened by longer-term constraints as well. Indeed, there is a looming risk of secular stagnation in many advanced economies, owing to the adverse effect on productivity growth of years of underinvestment in human and physical capital.
And the structural reforms that these economies need to boost their potential growth will be implemented too slowly.
While the eurozone's tail risks are lower, its fundamental problems remain unresolved: low potential growth; high unemployment; high and rising levels of public debt; loss of competitiveness and slow reduction of unit labour costs (which a strong euro does not help); and extremely tight credit rationing, owing to banks' ongoing deleveraging.
Meanwhile, progress toward a banking union will be slow, while no steps will be taken toward establishing a fiscal union, even as austerity fatigue and political risks in the eurozone's periphery grow.
In Japan, prime minister Shinzo Abe's government has made significant headway in overcoming almost two decades of deflation, thanks to monetary easing and fiscal expansion.
The main uncertainties stem from the coming increase in the consumption tax and slow implementation of the third "arrow" of Abenomics, namely structural reforms and trade liberalisation.
In the US, economic performance in 2014 will benefit from the shale energy revolution, improvement in the labour and housing markets and the "reshoring" of manufacturing.
The downside risks result from: political gridlock in Congress (particularly given the upcoming midterm election in November), which will continue to limit progress on long-term fiscal consolidation; a lack of clarity about the Federal Reserve's planned exit from quantitative easing (QE) and zero policy rates; and regulatory uncertainties.
Emerging markets' difficult year in 2013 reflected several factors, including China's economic slowdown, the end of the commodity super cycle, and a fall in potential growth, owing to delays in launching structural reforms.
Moreover, several major emerging economies were hit hard in the spring and summer, after the Fed's signal of a forthcoming exit from QE triggered a capital flow reversal, exposing vulnerabilities stemming from loose monetary, fiscal, and credit policies in the boom years of cheap money and abundant inflows.
Emerging economies will grow faster in 2014 – closer to 5% year on year – for several reasons. Brisker recovery in advanced economies will boost imports from emerging markets.
The Fed's exit from QE will be slow, keeping interest rates low. Policy reforms in China will attenuate the risk of a hard landing.
And, with many emerging markets still urbanising and industrialising, their rising middle classes will consume more goods and services.
Still, some emerging markets – namely, India, Indonesia, Brazil, Turkey, South Africa, Hungary, Ukraine, Argentina, and Venezuela – will remain fragile in 2014, owing to large external and fiscal deficits, slowing growth, below target inflation and election-related political tensions.
Some of these countries – for example, Indonesia – have recently undertaken more policy adjustment and will be subject to lower risks, though their growth and asset markets remain vulnerable to policy and political uncertainties and potential external shocks.
The better-performing emerging markets are those with fewer macroeconomic, policy and financial weaknesses: South Korea, the Philippines, Malaysia and other Asian industrial exporters; Poland and the Czech Republic in Europe; Chile, Colombia, Peru and Mexico in Latin America; Kenya, Rwanda and a few other economies in sub-Saharan Africa; and the Gulf oil-exporting countries.
Finally, China will maintain an annual growth rate above 7% in 2014. But, despite the reforms set out by the Communist party's central committee, the shift in China's growth model from fixed investment toward private consumption will occur too slowly.
Many vested interests, including local governments and state-owned enterprises, are resisting change; a huge volume of private and public debt will go sour; and the country's leadership is divided on how quickly reforms should be implemented.
So, while China will avoid a hard landing in 2014, its medium-term prospects remain worrisome.
In sum, the global economy will grow faster in 2014, while tail risks will be lower.
But, with the possible exception of the US, growth will remain anaemic in most advanced economies, and emerging-market fragility – including China's uncertain efforts at economic rebalancing – could become a drag on global growth in subsequent years.
Monday, November 4, 2013
Public confidence in the European Union has fallen to historically low levels in the six biggest EU countries, raising fundamental questions about its democratic legitimacy more than three years into the union's worst ever crisis, new data shows.
After financial, currency and debt crises, wrenching budget and spending cuts, rich nations' bailouts of the poor, and surrenders of sovereign powers over policymaking to international technocrats, Euroscepticism is soaring to a degree that is likely to feed populist anti-EU politics and frustrate European leaders' efforts to arrest the collapse in support for their project.
Figures from Eurobarometer, the EU's polling organisation, analysed by the European Council on Foreign Relations (ECFR), a thinktank, show a vertiginous decline in trust in the EU in countries such as Spain, Germany and Italy that are historically very pro-European.
The six countries surveyed – Germany, France, Britain, Italy, Spain, and Poland – are the EU's biggest, jointly making up more than two out of three EU citizens or around 350 million of the EU's 500 million population.
The findings, published exclusively in the Guardian in Britain and in collaboration with other leading newspapers in the other five countries, represent a nightmare for Europe's leaders, whether in the wealthy north or in the bailout-battered south, suggesting a much bigger crisis of political and democratic legitimacy.
"The damage is so deep that it does not matter whether you come from a creditor, debtor country, euro would-be member or the UK: everybody is worse off," said José Ignacio Torreblanca, head of the ECFR's Madrid office. "Citizens now think that their national democracy is being subverted by the way the euro crisis is conducted."
EU leaders are aware of the problem, utterly at odds over what to do about it, and have yet to come up with any coherent policy proposals addressing the mismatch between the pooling of economic and fiscal powers and the democratic mandate deemed necessary to underpin such radical policy shifts.
José Manuel Barroso, the European commission president, said on Tuesdaythis week the European "dream" was under threat from a "resurgence of populism and nationalism" across the EU. "At a time when so many Europeans are faced with unemployment, uncertainty and growing inequality, a sort of 'European fatigue' has set in, coupled with a lack of understanding. Who does what, who decides what, who controls whom and what? And where are we heading to?"
The most dramatic fall in faith in the EU has occurred in Spain, where the banking and housing market collapse, eurozone bailout and runaway unemployment have combined to produce 72% "tending not to trust" the EU, with only 20% "tending to trust".
The data compares trust and mistrust in the EU at the end of last year with levels in 2007, before the financial crisis, to reveal a precipitate fall in support for the EU of the kind that is common in Britain but is much more rarely seen on the continent.
In Spain, trust in the EU fell from 65% to 20% over the five-year period while mistrust soared to 72% from 23%.
In five of the six countries, including Britain, mistrust prevailed over trust by sizeable margins, whereas in 2007 – with the exception of the UK – the opposite was the case.
Five years ago, 56% of Germans "tended to trust" the EU, whereas 59% now "tend to mistrust". In France, mistrust has risen from 41% to 56%. In Italy, where public confidence in Europe has traditionally been higher than in the national political class, mistrust of the EU has almost doubled from 28% to 53%.
Even in Poland, which enthusiastically joined the EU less than a decade ago and is the single biggest beneficiary from the transfers of tens of billions of euros from Brussels, support has plummeted from 68% to 48%, although it remains the sole country surveyed where more people trust than mistrust the union.
In Britain, where Eurobarometer regularly finds majority Euroscepticism, the mistrust grew from 49% to 69%, the highest level with the exception of the extraordinary turnaround in Spain.
A separate, more detailed study published this week on the impact of the currency and debt crisis and the austerity policies that have followed also found steep falls across the EU in faith in democracy and national political elites.
The study for the Cabinet Office by the European Social Survey, linking university researchers across the EU, found that soaring unemployment, anxiety and insecurity had eroded faith in politics.
"Overall levels of political trust and satisfaction with democracy [declined] across much of Europe, but this varied markedly between countries. It was significant in Britain, Belgium, Denmark and Finland, particularly notable in France, Ireland, Slovenia and Spain, and reached truly alarming proportions in the case of Greece," it said.
The financial crisis "not only eroded the objective economic conditions of many citizens, but also created widespread anxiety about a country's future even among those who did not experience hardship directly".
Faced with this erosion of political support and the battering traditional politics is taking from populist newcomers such as Beppe Grillo's Five Star movement in Italy, policymakers appear at a loss.
On Monday, Barroso said the austerity policies being applied, mainly under pressure from Berlin, had reached the "limits of political and social acceptance" and were "unsustainable" in their current form. On Tuesday, though, the commission in Brussels sought to row back on his remarks.
Within the eurozone, the key response to the crisis, apart from bailouts, has been to embark on a systematic surrender of budgetary and fiscal powers from national governments and parliaments to Brussels, as well as having countries being bailed out overseen by a "troika" of technocrats and economists from the commission, the European Central Bank and the International Monetary Fund. These are "federalising" steps in a long process of eurozone integration that might see it transformed from a currency into a political union.
"The EU has hit home and is here to stay as a watchdog of budgets, labour markets, pensions etc. This is unprecedented, and risky," said Torreblanca. "Unless it is fixed, it will feed the vicious circle between anti-EU populism and technocracy which we are currently seeing operating."
Barroso argued strongly in two speeches this week that federalism was the only answer to Europe's crisis of finances and of confidence. The German chancellor, Angela Merkel, brushing off widespread fears of a new German "hegemony" in Europe and the eurozone, also said that governments had to give up much more power to Brussels.
"We still haven't found the answer to the question of whether we're actually now prepared to unite on common economic parameters inside the single currency area," she said in a Berlin debate with the Polish prime minister, Donald Tusk. "If we want to have a common currency, a common Europe, we have to be ready to give up our hard-won habits … That means we have to be prepared to accept that in the end Europe has the final word in certain things. Otherwise we can't keep on building this Europe … To an extent, we have to jump over our own shadows. I'm ready for that."
But Tusk delivered an unusually stark warning that German prescriptions could bring increasing nationalism and populism across the EU in a backlash that was already well under way.
"We can't escape this dilemma: how do you get a new model of sovereignty so that limited national sovereignty in the EU is not dominated by the biggest countries like Germany, for example," he said pointedly. "Under the surface, this fear will be everywhere: in Warsaw, in Athens, in Stockholm. It will be everywhere without exception."
Aart de Geus, head of the Bertelsmann Stiftung, a German thinktank, also warned that the drive to surrender more key national powers to Brussels would backfire. "Public support for the EU has been falling since 2007. So it is risky to go for federalism as it can cause a backlash and unleash greater populism."
Friday, September 13, 2013
Italian GDP revised down - The Italian recession is deeper than thought. New data released this morning shows that the economy shrank by 0.3% in the second quarter of 2013, worse than the 0.2% first estimated. That means that Italian GDP is 2.1% less than a year ago, not the 2% as initially thought.
As if prime minister Enrico Letta didn't have enough to worry about with Silvio Berlusconi's fate still in the balance.
ISTAT, Italy's statistics body, reported that household spending continued to shrink in the face of Italy's economic woes, falling by 0.4% during the April-June quarter.
Capital spending and imports also dropped, by 0.3% quarter-on-quarter in both cases.
The year-on-year data underlined how Italy's economy has suffered over the last 12 months. Consumption is down by 2.4%, capital expenditure is 5.9% lower, while imports are down 4.6%. Exports are 0.2% higher than a year ago.
Here are the details:
Over in the bond markets, Italian government borrowing costs have risen above Spain's for the first time in 18 months. It means Italy is being priced as a (slightly) bigger risk than Spain, in a sign that the Berlusconi Conundrum is dragging Italy towards a new crisis. Italian 10-year bond yields are trading at 4.485% this morning compared to 4.481% for Spain. That's must be a minor relief for Madrid, whose borrowing costs have been pushed up by allegations of government corruption and fears over bad bank debts.
Thursday, August 8, 2013
"The IMF said Germany’s currency is undervalued by up to 10pc, roughly the same as China, but monetary union is jamming the correction mechanism with EMU." Only 10pc? I would have thought nearer 15-18% at least compared to southern Med countries.
It is also interesting to see the IMF poking the sleeping giant with a sharp stick. It begs the question why the main prop beneath the whole EMU is being provoked into potentially wiping out western and southern European economies by turning off the tap of free money. Perhaps that is the plan? Oh well. Time to microwave some popcorn and watch the silly people shouting at each other. “Fiscal over-performance should be firmly avoided,” said the Fund in its annual health check on the country. “Should growth prospects sour and labour markets weaken, proactive fiscal policies would be needed. A large shock may necessitate invoking the escape clause under the debt brake rule in order to support domestic activity and employment,” it said, referring to a clause in the German constitution mandating a cut in the structural deficit to near balance by 2016. The IMF said Germany is barely above recession level, with growth of just 0.3pc this year followed by a Japan-style stagnation for the rest of decade with a peak growth rate of 1.3pc. The country will lag the United States by the biggest margin in modern history each year until 2018. While the language of the IMF report is polite, it masks a bitter dispute between the Fund and Germany over the nature of the EMU malaise, and whether austerity and reform really have cleared the way for a viable recovery....“Fiscal over-performance should be firmly avoided,” said the [International Monetary] Fund in its annual health check on the country.[Germany]" If only the Germans would perform fiscally like the Greeks everything would be rosy, I suppose. But they will insist on making things and collecting taxes and saving money and stupid stuff like that. By the way, I can't imagine my doctor telling me during my annual health check that I should firmly avoid being too healthy. But then my doctor isn't mad...Now, if one country is running a trade surplus then another must be running a trade deficit. How do you finance a deficit? By increasing your debt load of course. Now Germany is telling the PIIGS to decrease their debt loads, but making that virtually impossible by doing everything it can to maintain or increase it's trade surplus. The debt can only be paid back if Germany runs a trade deficit. PIIGS debt is the other side of the coin to German surpluses...you see?
Friday, June 7, 2013
FRANKFURT—Germany's central bank Friday cut its growth forecast for Europe's largest economy this year and next, tying the nation's fate to whether the euro-zone emerges from recession. "Much will depend on whether the economic situation stabilizes in the euro-area crisis countries," Jens Weidmann, president of the Deutsche Bundesbank, said in a statement. In its semiannual economic projections, the central bank lowered its growth forecast to 0.3% this year from its December estimate of 0.4% expansion, and reduced its forecast for 2014 growth to 1.5% from 1.9%. Germany has managed ride out the euro-zone crisis while many other European economies have floundered, but weak investment and sagging exports amid recession in some euro-area countries and the slowing global economy caused Germany's economy to contract sharply in the fourth quarter. Germany narrowly escaped recession in the first quarter, when its gross domestic product, a measure of economic growth, increased just 0.1%, on the back of robust private consumption. The Bundesbank's forecasts follow those of the European Commission, which last month lowered its 2013 growth outlook for Germany to 0.4% from a previous estimate of 0.5%. Earlier this month, the International Monetary Fund also cut its estimate for German growth in 2013 to "around 0.3%" from 0.6%. Despite the dulled forecasts, the Bundesbank said Germany's economy is slowly picking up again, as other euro-zone economies bottom out and the world economy gains momentum. A solid labor market, wage increases and a general easing of inflation are supporting private consumption in Germany, Mr. Weidmann said. According to the Bundesbank, consumer price inflation, as measured by the Harmonized Index of Consumer Prices, is set to accelerate modestly this year to 1.6% from its December forecast of 1.5%. Next year, it will slow to 1.5%, the central bank said.
Thursday, December 20, 2012
Eurozone leaders met for the umpteenth time in October in their latest attempt to shore up the faltering economies of Europe and restore confidence in the euro.
Since the onset of the financial crisis in 2008, there has been an almost constant string of meetings among top policymakers in a concerted effort to resolve the debt crisis that has decimated the Greek economy and dragged the eurozone to the brink of its second recession in three years.
These include meetings of the Eurogroup, Economic and Financial Affairs Council (known as Ecofin) and European Council, as well as full-blown European Union summits.
And yet still the crisis rumbles on, with Spain looking increasingly likely to follow Greece, the Republic of Ireland and Portugal in seeking a bailout as it struggles to bring its debts under control.
So what have all these meetings, talks, lengthy negotiations and summits been in aid of? What have they actually achieved?
Bankers have long pilloried policymakers for their inability to get to grips with the crisis and implement effective reforms to solve it. But do they have a point?
Decide for yourselves with our handy summary of the major eurozone meetings held since Athens first called on its neighbours for help.
Sunday, December 9, 2012
When German Finance Minister Wolfgang Schäuble and his French counterpart Pierrre Moscovici gave their first joint press conference two weeks ago, they were asked who would take over leadership of the Euro Group once Jean-Claude Juncker stepped down. As early as last summer, Juncker had said he wanted to hand over the reins, but had been persuaded to continue for lack of consensus on a successor. But despite such indications that the end was nigh for Juncker's term at the top, both Schäuble and Moscovici played down the issue.
"Next year is next year," said the Frenchman. "We have other concerns at the moment," said the German.
As of Monday evening, however, the two can no longer dodge the question. At the end of yet another late-evening Euro-Group meeting in Brussels -- during which finance ministers from the 17 euro-zone member states agreed to provide €40 billion in aid to ailing Spanish banks -- Juncker told his colleagues that he intended to step down at the end of the year. "I have asked them to name another minister," Juncker said. His departure will mark an end to his seven-year stewardship of the common currency -- and one that comes not a moment too soon from his perspective. Juncker, who is also the prime minister of Luxembourg, had long been nonplussed at the lack of urgency with which his colleagues viewed his approaching departure, assuming that he would simply carry on until they got around to finding someone. Juncker himself is not blameless in this regard, having been convinced to continue once before, even allowing himself to be elected to another term as Euro Group president last summer. Still, he had been consistent in his desire to step down at the end of this year or the beginning of next. Now, it would seem, it would take a great deal of convincing from a personage such as German Chancellor Angela Merkel to get him to change his mind....Other candidates could theoretically be considered as well, but their chances are seen as limited. Dutch Finance Minister Jeroen Dijsselbloem, for example, is considered both competent and less stubborn than his predecessor, but he has only been finance minister for a few weeks. It is also possible that the Euro Group chooses an outside candidate. The Lisbon Treaty merely stipulates that "the Ministers of the Member States whose currency is the euro shall elect a president for two and a half years, by a majority of those Member States." Still, it would almost certainly need to be someone who has played a central role in recent efforts to combat the euro crisis. Whoever might take over the leadership of the Euro Group, Juncker will likely continue to play a role as Luxembourg's representative. While his country's finance minister, Luc Frieden, currently fills Luxembourg's seat on the panel, Juncker, who carries the official title "treasurer" in addition to his role as prime minister, is likewise eligible for Euro Group membership. And, he has said, he still wants to have a voice.
Thursday, November 22, 2012
This EU budget stuff can come across as pretty dull and confusing. To lighten things up a bit, we will turn to the universal language of football. So meet the EU budget 'Veto Team' - the eleven EU leaders that so far have threatened to veto the EU budget unless they get a better deal. Needless to say, given that this is its first outing, the eleven-man team is far from a cohesive unit - with lots of big egos and players who play for themselves.
· David Cameron leads the line, ready to strike and seen as the most likely to pull the trigger on any veto.
· Swedish Prime Minister Fredrik Reinfeldt at right winger hugging the line (sticking to his guns), happy to put in a shift for the team and more likely to offer an assist/support for Cameron than to deliver the final blow himself.
· French President François Hollande is the mercurial trickster playing between the lines but not quite sure of his role or his aims. Ultimately a selfish player (as are many of the others) but who’s own personal gain could ultimately be detrimental to the rest of the team.
· Italian Prime Minister Mario Monti is playing the stoic holding role, refusing to budge and occasionally gesticulating wildly at the referee, although never actually getting into the danger zone at the forefront of the action. More likely to break up play and provide a stumbling block than deliver a knockout blow to the opposition. Unlike the rest of the team, not here on merit (elected) but parachuted in by the powers above.
· Portuguese Prime Minister Pedro Passos Coelho takes on the Cristiano Ronaldo role as a marauding left winger and not just because of the nationality. His red line that Herman Van Rompuy's proposal is unacceptable makes him more of a threat than many expected. Under pressure to perform from his home fans (electorate) he needs to put in a big showing – the question remains though whether he will rise to the challenge or crumble under the pressure.
· Dutch Prime Minister Mark Rutte is playing the 'box-to-box midfielder' role, akin to the days of Johan Cruyff's 'total football'. Usually more inclined to side with Germany (the opposition), Rutte finds himself dragged end-to-end with action not quite sure where he should be or where he is best suited. One things for sure, his hometown team (the VVD party) would love to see him score.
· Belgian Prime Minister Elio Di Rupo, naturally inclined to the left, find himself at left back. His demands are relatively minor and he’s not a regular in this team (usually part of the core EU group who’s views align closely). He’ll put up a fight for a bit but he’s not a star player in this game.
· The towering centre-back, Danish Prime Minister Helle Thorning-Schmidt provides a solid spine to the team. Not one of the more flashy players but they know their job and what they want out of it (a clean sheet). Unlikely to score (pull the veto) but will definitely provide a blocker against any increases in the budget.
· Austrian Chancellor Werner Faymann is another unfamiliar member of the team. Stuck in at centre back because of its experience in the eurozone crisis and playing a key blocking role in minimising the liabilities. Unfortunately, its aims are different in this game and as with Hollande its may end up scoring an own goal (getting more spending in the budget).
· Romanian President Traian Basescu, at right back, is there as a late replacement and now a token entry. The previous incumbent (Romanian Prime Minister Victor Ponta) looked set for an interesting game, but after the substitution this role is unlikely to provide much action.
· Latvian Prime Minister Valdis Dombrovskis is in goal because, well, the smallest kid always gets stuck with the worst job.
Wednesday, December 7, 2011
" A senior German official" has been talking to Reuters. The unnamed official has said they are "not sure if summit will reach conclusion on using IMF funds in eurozone crisis" and "can't forsee running EFSF and ESM simultaneously". They have also said they are "more pessimistic than last week on overall summit deal". Well, that's reassuring....Meanwhile : The ECB said banks asked for $50.7bn in 84-day dollar funds and $1.602bn in the 1-week tender in the operations, in which they are guaranteed to get all funds they requested. The demand was well above the $10bn median forecast in a Reuters poll of money market traders. Traders attributed banking strains in countries mired in the debt crisis as the main reason for the high amount allocated. Remember that liquidity boost last week? Reuters reports that banks took more than $50bn from the European Central Bank today in its first offering since slashing the cost of borrowing dollars, a sign that some euro zone banks have problems finding dollar funding as the region's debt crisis intensifies.www.ziaruldeinvestigatii.ro
Thursday, July 21, 2011
Germany and France struck a deal early on Thursday morning intended to rescue Greece and the euro from financial ruin. After six hours of talks in Berlin prior to a crucial summit in Brussels, Chancellor Angela Merkel and President Nicolas Sarkozy agreed a compromise on the losses that Greece's private creditors are to take, in a complex new bailout for Athens, German and French government sources said. Jean-Claude Trichet, the president of the European Central Bank, who has been Merkel's most vocal opponent in the wrangling over how to respond to the euro crisis, rushed to Berlin late on Wednesday night to take part in the negotiations. No details of the pact were revealed. But senior officials at the European commission in Brussels disclosed that a compromise was in the air to save Greece and halt contagion by levying a tax on banks in the eurozone – opposed by Berlin and proposed by Paris – as well as a long-term Greek debt rollover stretching for decades, and other measures aimed at reducing Greece's crippling debt level. It appeared that the multi-pronged formula would inexorably lead to Greece being deemed to be in sovereign default, at least temporarily. The last-minute deal, following a telephone dispute between the two leaders on Tuesday, is to be put to the heads of the European commission, council and central bank this morning before an emergency summit of the 17 leaders of single-currency countries. The Brussels summit – the 10th time in 18 months that European leaders will have tried to save the euro and Greece from collapse – is being staged amid grave pessimism that politicians will be able to bury their differences and combine to rescue the single currency. It remained to be seen if the Franco-German compromise would win the support of other leaders and would go far enough to satisfy the financial markets. Amid a febrile mood and an ominous sense that the euro was facing a make-or-break moment, an unusual hush descended on the key European capitals on Wednesday. It was as if leaders and officials had been struck dumb by the weight of the responsibility bearing down on them. The silence was broken only by José Manuel Barroso, the president of the European commission, who chastised the current crop of EU leaders, declaring that "history will judge this generation of leaders harshly" if they refuse to act decisively in the euro's darkest hour. The emergency summit brings together the 17 government leaders of the eurozone, plus the heads of the European Central Bank, the commission, and Christine Lagarde, until recently French finance minister and the new head of the International Monetary Fund. The main challenge is to forge a pact that will reduce Greece's crippling level of debt. The fundamental issue is who pays for that. On Wednesday night, the Germans insisted that Greece's private creditors pick up a large part of the tab, the main dispute with Sarkozy and Trichet. The markets are more than jittery, and Washington is nervous. President Barack Obama intervened on Tuesday by phoning Merkel. "Might this meeting finally bring an end to the farce surrounding the euro area's response to Greece?" said Daiwa Capital Markets. "No chance."
Friday, February 25, 2011
As he desperately tries to squash a popular rebellion, Libyan ruler Moammar Gaddafi is banking on the loyalty of a close circle of relatives and security officials whose personal fates depend on his survival, according to U.S. officials and analysts. Among them are four of his sons and two longtime spy chiefs accused of directing a series of assassination and terrorist plots during Gaddafi's four decades in power. While numerous Libyan diplomats and government officials have defected or abandoned Gaddafi in recent days, analysts said it is unlikely that his inner core will follow suit.
"The people who are in the bunker with him, they have pretty good reasons for sticking by Gaddafi," said John Hamilton, a Libya expert with Cross Border International, a British publishing and consulting firm that specializes in North Africa. "It's a bit late for the sons to revolt against their father . . . There's really nowhere for the others to turn, either." (W.P)
"The people who are in the bunker with him, they have pretty good reasons for sticking by Gaddafi," said John Hamilton, a Libya expert with Cross Border International, a British publishing and consulting firm that specializes in North Africa. "It's a bit late for the sons to revolt against their father . . . There's really nowhere for the others to turn, either." (W.P)
Friday, January 21, 2011
Mămăliga din Orientul Mijlociu" ("Middle East Polenta") that is the title chosen by Shachar Shaine, the former head of Tuborg Romania, for his speech delivered at the luxury Loft restaurant in Bucharest, held by a businessman closely connected to the beverage industry, Pepe Berciu, on Wednesday night. Shaine, 42, said goodbye to his co-workers, as well as to competitors in a relaxed atmosphere, pointing out that Romania was definitely "the country worth living and investing in". The manager who spent the last six years at the helm of United Romanian Breweries Bereprod (URBB), the bottler of Tuborg and Carlsberg, says he decided to stay in Romania, despite propositions from shareholders for whom he had worked to take over similar businesses in other countries. "I will stay and develop business here," Shaine said without providing further details. He is one of the managers with the longest-standing career in the beer industry, having worked for the same company for the last eleven years. Israeli-born Shaine has repeatedly said he loves Romania and even became a Romanian citizen six months ago.(Z.F.) BCE,ECB,IMF,Germany,France,Euro,currency,forex,investments,bucharest,Romania,cluj,