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Re: New EC Thread
Panda Fri 2 Nov - 9:18
Every penny we save at home is being sent to Brussels
By Daniel HannanPoliticsLast updated: October 30th, 2012
109 CommentsComment on this article
Every penny saved by cuts is gobbled up by Brussels (Graphic by ConservativeHome)
The change has been so sudden, so dizzying, that commentators are struggling to keep up. As recently as a a couple of years ago, British Europhiles used to aver that we shouldn't get too hung up about our budget contributions. Paying more in, they said, gave us additional leverage in Brussels; complaining, by contrast, cost us influence.
If there is a single politician making that argument today, I have yet to hear him. Even Denis MacShane – Denis MacShane, for Heaven's sake – now contends that the EU, just like its member nations, must learn to get by with less.
The key amendment tomorrow is the one moved by the Rochester and Strood MP, and former top-rated UK economist, Mark Reckless. It calls for a real terms cut. In other words, the EU budget should increase more slowly than inflation.
The Reckless amendment is remarkably modest. Almost every one of the 27 member governments, including the United Kingdom, is making far more severe cuts than it demands. And almost all of them, including the United Kingdom, must borrow the money they are sending to Brussels. As I argue in a comment piece in the main newspaper today, Britain's contribution to the EU budget more than wipes out all our domestic spending cuts put together.
The Reckless amendment, if accepted, would commit the government to negotiating a small reduction in our budget contribution – far smaller than the cuts it is having to make elsewhere. Other amendments (my old friend Jacob Rees-Mogg has put down a splendidly quixotic alternative) lack this clarity.
It's hard to see how any Conservative MP – and this might apply to one or two Lib Dems – could want to give Brussels more money than Denis MacShane does. Either way, though, both big parties are now in a position that would have been unthinkable as recently as 18 months ago. The process of disengagement is beginning
By Daniel HannanPoliticsLast updated: October 30th, 2012
109 CommentsComment on this article
Every penny saved by cuts is gobbled up by Brussels (Graphic by ConservativeHome)
The change has been so sudden, so dizzying, that commentators are struggling to keep up. As recently as a a couple of years ago, British Europhiles used to aver that we shouldn't get too hung up about our budget contributions. Paying more in, they said, gave us additional leverage in Brussels; complaining, by contrast, cost us influence.
If there is a single politician making that argument today, I have yet to hear him. Even Denis MacShane – Denis MacShane, for Heaven's sake – now contends that the EU, just like its member nations, must learn to get by with less.
The key amendment tomorrow is the one moved by the Rochester and Strood MP, and former top-rated UK economist, Mark Reckless. It calls for a real terms cut. In other words, the EU budget should increase more slowly than inflation.
The Reckless amendment is remarkably modest. Almost every one of the 27 member governments, including the United Kingdom, is making far more severe cuts than it demands. And almost all of them, including the United Kingdom, must borrow the money they are sending to Brussels. As I argue in a comment piece in the main newspaper today, Britain's contribution to the EU budget more than wipes out all our domestic spending cuts put together.
The Reckless amendment, if accepted, would commit the government to negotiating a small reduction in our budget contribution – far smaller than the cuts it is having to make elsewhere. Other amendments (my old friend Jacob Rees-Mogg has put down a splendidly quixotic alternative) lack this clarity.
It's hard to see how any Conservative MP – and this might apply to one or two Lib Dems – could want to give Brussels more money than Denis MacShane does. Either way, though, both big parties are now in a position that would have been unthinkable as recently as 18 months ago. The process of disengagement is beginning
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Re: New EC Thread
Panda Fri 2 Nov - 10:03
JP Morgan says Greece will not pass the troika test and will need more money but who will help.
The International Bank is lending EUROS at 2.4 % interest ...but will it lend to Greece?
Greek stocks sink as Lawmakers grapple over the ECB plan.
Dueutche Bank says the wrong treatment was given to try to save Greece whose debt ratio is 180% ...90% is considered not healthy.
The EU is working at such a snails pace to try to resolve the crisis that other Countries are becoming very impatient , they themselves in recession. The EU should have changed its approach much sooner and Merkel is becoming unpopular, even in Germany.
Italian and Spanish leaders have meet to discuss the crisis , they are very concerned. Rajoy is still holding off asking for a bail-out internal problems with Catalonia granted independence and Andalucia seeking the same.
A row has erupted over talk that Greece may be looking for another haircut.
The International Bank is lending EUROS at 2.4 % interest ...but will it lend to Greece?
Greek stocks sink as Lawmakers grapple over the ECB plan.
Dueutche Bank says the wrong treatment was given to try to save Greece whose debt ratio is 180% ...90% is considered not healthy.
The EU is working at such a snails pace to try to resolve the crisis that other Countries are becoming very impatient , they themselves in recession. The EU should have changed its approach much sooner and Merkel is becoming unpopular, even in Germany.
Italian and Spanish leaders have meet to discuss the crisis , they are very concerned. Rajoy is still holding off asking for a bail-out internal problems with Catalonia granted independence and Andalucia seeking the same.
A row has erupted over talk that Greece may be looking for another haircut.
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Re: New EC Thread
Panda Sat 3 Nov - 9:23
PoliticsMember States
Greece
Chaotic countdown to bailout or bankruptcy
Ta Nea, 2 November 2012
“The Six Day War has begun,” headlines Ta Nea, referring to the countdown to the next meeting of the Eurogroup, which could be held on November 8 to decide whether to go ahead and pay out 31.5 billion euros to Greece. But if he is to get this new tranche of aid from the EU, ECB and the IMF that Greece needs to avoid bankruptcy, Prime Minister Antonis Samaras must persuade Parliament to adopt a new austerity plan – especially since the Eurogroup is to meet again on November 12 to discuss the two-year period Athens claims it needs 2932341 to set its books in order.
In fact, confirms To Ethnos, the deputies are engaged in a “hand-to-hand battle” over the 11.5 billion euros in cuts put forward by the government. However the newspaper adds –
Greece
Chaotic countdown to bailout or bankruptcy
Ta Nea, 2 November 2012
“The Six Day War has begun,” headlines Ta Nea, referring to the countdown to the next meeting of the Eurogroup, which could be held on November 8 to decide whether to go ahead and pay out 31.5 billion euros to Greece. But if he is to get this new tranche of aid from the EU, ECB and the IMF that Greece needs to avoid bankruptcy, Prime Minister Antonis Samaras must persuade Parliament to adopt a new austerity plan – especially since the Eurogroup is to meet again on November 12 to discuss the two-year period Athens claims it needs 2932341 to set its books in order.
In fact, confirms To Ethnos, the deputies are engaged in a “hand-to-hand battle” over the 11.5 billion euros in cuts put forward by the government. However the newspaper adds –
The situation does not surprise editorialist Pantelis Kapsis –
…the differences within the coalition between the New Democracy conservatives, PASOK socialists and the Democratic Left Party are becoming increasingly important. Defections of MPs from the latter two parties are increasing, which could jeopardise the adoption of the new austerity measures.
The main victim of the turmoil could be PASOK and its leader Evangelos Venizelos, writes To Vima, expressing a widespread discontentment in the Greek press –
The government was put together only four months ago, and as always in politics, it’s at risk of falling apart. Not because of major differences but because of little things.
In the autumn of 2009, when George Papandreou came to power ten percentage points ahead [of his right-wing opponent Costas Karamanlis], he declared, ‘The money is available.’ Months later the country was placed under international administration. Many may not like to hear it, but Papandreou has laid the foundations for reforming Greece. Today, he has been replaced as the leader of PASOK by Evangelos Venizelos, and the historical party is in turmoil. Many regret that the party that ruled Greece for so long is fading away. But (…) no party ever left the political stage with ‘glory and honour’: if they had, they would not have left. Greece itself, though, will not be significantly affected either way if PASOK exits from public life. The country has already left it behind.
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Re: New EC Thread
Panda Sat 3 Nov - 9:40
German Bonds Gain Second Week as Europe’s Economic Slump Deepens
By Lukanyo Mnyanda and Emma Charlton - Nov 3, 2012 7:00 AM GMT
German government bonds rose for a second week as reports showed Europe’s economic slump is deepening and Spain delayed asking for a bailout that may help reduce borrowing costs across the region.
Germany’s two-year note yield dropped to the lowest in eight weeks yesterday as data revealed manufacturing in Spain and Italy contracted in October. Spanish bonds fell after the nation said a debt sale next week will include the longest maturity it has auctioned in 18 months. Bunds pared gains after hiring in the U.S. jumped more than economists predicted last month. Greece’s bonds slid as coalition government lawmakers squabbled over austerity demanded by its creditors.
“The bund market is well supported given the prevarication by the Spanish about the sovereign bailout,” said Nick Stamenkovic, a fixed-income strategist at RIA Capital Markets Ltd. in Edinburgh. “The Greek negotiations are dragging on with no sign of a solution at the moment. That’s keeping bunds pretty well underpinned in the short term.”
Germany’s 10-year bund yield dropped nine basis points, or 0.09 percentage point, this week to 1.45 percent at 5 p.m. London time yesterday. The 1.5 percent security maturing in September 2022 gained 0.79, or 7.90 euros per 1,000-euro ($1,284) face-amount, to 100.46.
Two-year yields fell five basis points from a week earlier to zero, the least since Sept. 6.
Factory Output
An index of factory output in Spain was at 43.5 last month, London-based Markit Economics said yesterday. The median prediction of economists was 44.1. Italy’s gauge was at 45.5, from 45.7 in September. For the 17-nation euro area, the index fell to 45.4 from 46.1 in September. That compares with an initial October estimate of 45.3 published on Oct. 24. A reading below 50 indicates contraction.
Spain’s 10-year bond yield rose seven basis points to 5.66 percent after rising 22 basis-points the previous week. The two-year yield was at 3.07 percent yesterday, down from 3.06 percent on Oct. 26.
The Iberian nation will sell a new benchmark 4.5 percent bond maturing 2018 on Nov. 8, the Treasury said yesterday. Yields on 20-year debt rose for the first time in four days yesterday, jumping 10 basis points to 6.30 percent after the government announced next week’s sales.
Prime Minister Mariano Rajoy is hesitating over triggering European Central Bank purchases of Spain’s bonds even as Moody’s Investors Service said last month the nation risks being downgraded to junk unless he requests aid. Spanish debt is rated one step above non-investment grade with a negative outlook.
Greek Bid
Greek Prime Minister Antonis Samaras’s bid to please lenders from the European Union and International Monetary Fundwith a 13.5 billion-euro austerity package and unlock funds ran into renewed obstacles this week from coalition partners. A law on state asset sales scraped through parliament, raising concerns on whether the government will be able to muster enough support to pass the measures.
Greece’s 10-year yield jumped 90 basis points this week to 18.19 percent.
German bonds returned 3.4 percent this year through Nov. 1, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spanish securities also gained 3.4 percent, while Italy’s debt earned 17 percent
By Lukanyo Mnyanda and Emma Charlton - Nov 3, 2012 7:00 AM GMT
German government bonds rose for a second week as reports showed Europe’s economic slump is deepening and Spain delayed asking for a bailout that may help reduce borrowing costs across the region.
Germany’s two-year note yield dropped to the lowest in eight weeks yesterday as data revealed manufacturing in Spain and Italy contracted in October. Spanish bonds fell after the nation said a debt sale next week will include the longest maturity it has auctioned in 18 months. Bunds pared gains after hiring in the U.S. jumped more than economists predicted last month. Greece’s bonds slid as coalition government lawmakers squabbled over austerity demanded by its creditors.
“The bund market is well supported given the prevarication by the Spanish about the sovereign bailout,” said Nick Stamenkovic, a fixed-income strategist at RIA Capital Markets Ltd. in Edinburgh. “The Greek negotiations are dragging on with no sign of a solution at the moment. That’s keeping bunds pretty well underpinned in the short term.”
Germany’s 10-year bund yield dropped nine basis points, or 0.09 percentage point, this week to 1.45 percent at 5 p.m. London time yesterday. The 1.5 percent security maturing in September 2022 gained 0.79, or 7.90 euros per 1,000-euro ($1,284) face-amount, to 100.46.
Two-year yields fell five basis points from a week earlier to zero, the least since Sept. 6.
Factory Output
An index of factory output in Spain was at 43.5 last month, London-based Markit Economics said yesterday. The median prediction of economists was 44.1. Italy’s gauge was at 45.5, from 45.7 in September. For the 17-nation euro area, the index fell to 45.4 from 46.1 in September. That compares with an initial October estimate of 45.3 published on Oct. 24. A reading below 50 indicates contraction.
Spain’s 10-year bond yield rose seven basis points to 5.66 percent after rising 22 basis-points the previous week. The two-year yield was at 3.07 percent yesterday, down from 3.06 percent on Oct. 26.
The Iberian nation will sell a new benchmark 4.5 percent bond maturing 2018 on Nov. 8, the Treasury said yesterday. Yields on 20-year debt rose for the first time in four days yesterday, jumping 10 basis points to 6.30 percent after the government announced next week’s sales.
Prime Minister Mariano Rajoy is hesitating over triggering European Central Bank purchases of Spain’s bonds even as Moody’s Investors Service said last month the nation risks being downgraded to junk unless he requests aid. Spanish debt is rated one step above non-investment grade with a negative outlook.
Greek Bid
Greek Prime Minister Antonis Samaras’s bid to please lenders from the European Union and International Monetary Fundwith a 13.5 billion-euro austerity package and unlock funds ran into renewed obstacles this week from coalition partners. A law on state asset sales scraped through parliament, raising concerns on whether the government will be able to muster enough support to pass the measures.
Greece’s 10-year yield jumped 90 basis points this week to 18.19 percent.
German bonds returned 3.4 percent this year through Nov. 1, according to indexes compiled by Bloomberg and the European Federation of Financial Analysts Societies. Spanish securities also gained 3.4 percent, while Italy’s debt earned 17 percent
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Re: New EC Thread
Panda Sun 4 Nov - 6:18
Golden Dawn takes advantage of recession ravaged Greece
Fascist gangs are turning Athens into a city of shifting front lines, seizing on crimes and local protests to promote their own movement, by claiming to be the defenders of recession ravaged Greece.
Image 1 of 3
The undisguised extremism promoted by Golden Dawn is a chilling watershed in Greece's post-war democracy Photo: Nikolas Giakoumidis/AP
Image 1 of 3
Malik Abdulbasset, an Egyptian-born shopkeeper, found himself the target of one of the mobs on Wednesday night Photo: John Liakos/ATHENA PICTURES
Image 1 of 3
Golden Dawn members led a crowd of enraged locals in a protest on Mikhail Voda St Photo: John Liakos/ATHENA PICTURES
By Damien McElroy, Athens
7:00PM GMT 02 Nov 2012
Thugs wearing the black T-shirts of the neo-Nazi Golden Dawn party are carrying out attacks on immigrant markets and in public squares, according to the United Nations, with victims speaking of areas in the capital which are now strictly off limits.
Malik Abdulbasset, an Egyptian-born shopkeeper, found himself the target of one of the mobs on Wednesday night after the barber across the road was stabbed during a robbery.
Golden Dawn members led a crowd of enraged locals in a protest on Mikhail Voda St that turned violent despite the presence of riot police.
While no one witnessed the attack on the barber, residents were adamant the assailant was black.
After battering his Egyptian assistant, the mob turned on Mr Abdulbasset, who had defied police to keep his shop open.
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"I had to turn and point to my Greek children and my Greek wife and say, look I am Greek, we are Greek, if you want to kill us we cannot stop you but you are killing your own."
The riot police watched on but did not intervene and threats of more protests were pasted on nearby doors.
"I will not close my shop because it is not my fault. But at the same time if something was to happen to my shop I will leave Greece because I am not protected."
Ilias Panagiotaris, an MP for Golden Dawn, and a leading party figure in Athens, was unapologetic about his group's methods.
"Most nations, well, not the US or Australia, have a single nationality that defines its culture and Greece must return to this ideal," he said. "The Golden Dawn is a very well organised party that is intervening to support and help people. Without us in a country where two million of ten million people are illegal, there would be chaos."
Support for his party has doubled from the seven per cent it received in the last Greek election, according to an opinion poll this week.
One of its main claims is it would dragoon immigrants on to flights to Islamabad and dare Pakistan to shoot the aircraft down.
Mr Panagiotaris added the 'papers' of every Greek who had acquired citizenship would be thoroughly vetted. "Everyone should have their documents inspected and those that bought their papers expelled."
The undisguised extremism promoted by Golden Dawn is a chilling watershed in Greece's post-war democracy.
Dimitra Xirou, the mother of Argyris Argyropoulos, the stabbed barber, seethed with anger at the nearby hospital, while holding vigil for her son.
The 43-year-old Mr Argyropoulos, came within an millimetre of death when he was robbed for just 10 euros, with the knife just missing his heart.
"It is us who have no one to protect us," Mrs Xirou said. "We are hungry, we have no jobs, there is crime everywhere.
"It used to be one of the best districts of Athens and now it is slum that we can't escape because the Pakistanis all come here when they arrive in Athens."
While the attacks have not specifically been backed by the powerful Orthodox Church, some priests have reportedly been involved in the protests.
Metropolitan Omyotis Moiysides, the local priest in Mrs Xirou’s Panteleiomon district, said the crime wave sweeping Athens as the economy disintegrated was forcing residents to fight back.
“I understand why the people are crying for help. I was pulled from my car and robbed,” he said. “The police do not come and stop these crimes, so the people have to defend themselves.”
This is where poverty creates violence and the austerity mantra will create so much civil unrest . The EU needs to pay heed to what is happening and Catalonia wanting independence along with Andalucia is another sign of social unrest.
Fascist gangs are turning Athens into a city of shifting front lines, seizing on crimes and local protests to promote their own movement, by claiming to be the defenders of recession ravaged Greece.
Image 1 of 3
The undisguised extremism promoted by Golden Dawn is a chilling watershed in Greece's post-war democracy Photo: Nikolas Giakoumidis/AP
Image 1 of 3
Malik Abdulbasset, an Egyptian-born shopkeeper, found himself the target of one of the mobs on Wednesday night Photo: John Liakos/ATHENA PICTURES
Image 1 of 3
Golden Dawn members led a crowd of enraged locals in a protest on Mikhail Voda St Photo: John Liakos/ATHENA PICTURES
By Damien McElroy, Athens
7:00PM GMT 02 Nov 2012
Thugs wearing the black T-shirts of the neo-Nazi Golden Dawn party are carrying out attacks on immigrant markets and in public squares, according to the United Nations, with victims speaking of areas in the capital which are now strictly off limits.
Malik Abdulbasset, an Egyptian-born shopkeeper, found himself the target of one of the mobs on Wednesday night after the barber across the road was stabbed during a robbery.
Golden Dawn members led a crowd of enraged locals in a protest on Mikhail Voda St that turned violent despite the presence of riot police.
While no one witnessed the attack on the barber, residents were adamant the assailant was black.
After battering his Egyptian assistant, the mob turned on Mr Abdulbasset, who had defied police to keep his shop open.
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"I had to turn and point to my Greek children and my Greek wife and say, look I am Greek, we are Greek, if you want to kill us we cannot stop you but you are killing your own."
The riot police watched on but did not intervene and threats of more protests were pasted on nearby doors.
"I will not close my shop because it is not my fault. But at the same time if something was to happen to my shop I will leave Greece because I am not protected."
Ilias Panagiotaris, an MP for Golden Dawn, and a leading party figure in Athens, was unapologetic about his group's methods.
"Most nations, well, not the US or Australia, have a single nationality that defines its culture and Greece must return to this ideal," he said. "The Golden Dawn is a very well organised party that is intervening to support and help people. Without us in a country where two million of ten million people are illegal, there would be chaos."
Support for his party has doubled from the seven per cent it received in the last Greek election, according to an opinion poll this week.
One of its main claims is it would dragoon immigrants on to flights to Islamabad and dare Pakistan to shoot the aircraft down.
Mr Panagiotaris added the 'papers' of every Greek who had acquired citizenship would be thoroughly vetted. "Everyone should have their documents inspected and those that bought their papers expelled."
The undisguised extremism promoted by Golden Dawn is a chilling watershed in Greece's post-war democracy.
Dimitra Xirou, the mother of Argyris Argyropoulos, the stabbed barber, seethed with anger at the nearby hospital, while holding vigil for her son.
The 43-year-old Mr Argyropoulos, came within an millimetre of death when he was robbed for just 10 euros, with the knife just missing his heart.
"It is us who have no one to protect us," Mrs Xirou said. "We are hungry, we have no jobs, there is crime everywhere.
"It used to be one of the best districts of Athens and now it is slum that we can't escape because the Pakistanis all come here when they arrive in Athens."
While the attacks have not specifically been backed by the powerful Orthodox Church, some priests have reportedly been involved in the protests.
Metropolitan Omyotis Moiysides, the local priest in Mrs Xirou’s Panteleiomon district, said the crime wave sweeping Athens as the economy disintegrated was forcing residents to fight back.
“I understand why the people are crying for help. I was pulled from my car and robbed,” he said. “The police do not come and stop these crimes, so the people have to defend themselves.”
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This is where poverty creates violence and the austerity mantra will create so much civil unrest . The EU needs to pay heed to what is happening and Catalonia wanting independence along with Andalucia is another sign of social unrest.
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Re: New EC Thread
Panda Sun 4 Nov - 11:49
Greece
Chaotic countdown to bailout or bankruptcy
2 November 2012
Ta Nea, 2 November 2012
“The Six Day War has begun,” headlines Ta Nea, referring to the countdown to the next meeting of the Eurogroup, which could be held on November 8 to decide whether to go ahead and pay out 31.5 billion euros to Greece. But if he is to get this new tranche of aid from the EU, ECB and the IMF that Greece needs to avoid bankruptcy, Prime Minister Antonis Samaras must persuade Parliament to adopt a new austerity plan – especially since the Eurogroup is to meet again on November 12 to discuss the two-year period Athens claims it needs 2932341 to set its books in order.
In fact, confirms To Ethnos, the deputies are engaged in a “hand-to-hand battle” over the 11.5 billion euros in cuts put forward by the government. However the newspaper adds –
Chaotic countdown to bailout or bankruptcy
2 November 2012
Ta Nea, 2 November 2012
“The Six Day War has begun,” headlines Ta Nea, referring to the countdown to the next meeting of the Eurogroup, which could be held on November 8 to decide whether to go ahead and pay out 31.5 billion euros to Greece. But if he is to get this new tranche of aid from the EU, ECB and the IMF that Greece needs to avoid bankruptcy, Prime Minister Antonis Samaras must persuade Parliament to adopt a new austerity plan – especially since the Eurogroup is to meet again on November 12 to discuss the two-year period Athens claims it needs 2932341 to set its books in order.
In fact, confirms To Ethnos, the deputies are engaged in a “hand-to-hand battle” over the 11.5 billion euros in cuts put forward by the government. However the newspaper adds –
The situation does not surprise editorialist Pantelis Kapsis –
…the differences within the coalition between the New Democracy conservatives, PASOK socialists and the Democratic Left Party are becoming increasingly important. Defections of MPs from the latter two parties are increasing, which could jeopardise the adoption of the new austerity measures.
The main victim of the turmoil could be PASOK and its leader Evangelos Venizelos, writes To Vima, expressing a widespread discontentment in the Greek press –
The government was put together only four months ago, and as always in politics, it’s at risk of falling apart. Not because of major differences but because of little things.
In the autumn of 2009, when George Papandreou came to power ten percentage points ahead [of his right-wing opponent Costas Karamanlis], he declared, ‘The money is available.’ Months later the country was placed under international administration. Many may not like to hear it, but Papandreou has laid the foundations for reforming Greece. Today, he has been replaced as the leader of PASOK by Evangelos Venizelos, and the historical party is in turmoil. Many regret that the party that ruled Greece for so long is fading away. But (…) no party ever left the political stage with ‘glory and honour’: if they had, they would not have left. Greece itself, though, will not be significantly affected either way if PASOK exits from public life. The country has already left it behind.
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Re: New EC Thread
Panda Mon 5 Nov - 9:46
Euro Touches Month Low on Concern Greece Won’t Secure Aid
By Monami Yui and Lucy Meakin - Nov 5, 2012 8:50 AM GMT
The euro declined to the lowest in almost eight weeks against the dollar amid concern Greece will struggle to secure bailout funds, risking the nation’s future in the European currency bloc.
The 17-nation euro declined versus 12 of its 16 major counterparts after Greek Prime Minister Antonis Samaras pledged yesterday that proposed wage and pension cuts will be the last, with the plan due to face parliamentary approval as early as Nov. 7. The Dollar Index (DXY) rose for a third day before tomorrow’s U.S. presidential election. Australia’s dollar strengthened after retail sales exceeded economists’ forecasts.
“The market is increasingly losing confidence that Greece might get its extended bailout money because the governing coalition is unraveling or disagreeing more and more,” saidImre Speizer, an Auckland-based strategist at Westpac Banking Corp. (WBC) “We’ve seen the euro fall and it looks like it wants to go lower.”
The euro weakened 0.4 percent to $1.2790 at 8:39 a.m. in London after dropping to $1.2778, the lowest level since Sept. 11. The common currency declined 0.5 percent to 102.73 yen. The yen appreciated 0.1 percent to 80.32 per dollar.
Samaras, speaking to lawmakers of his New Democracy Party in Athens, said Greek society won’t tolerate any more austerity measures. The first parliamentary vote on the latest package is scheduled to take place as early as Nov. 7.
Greece Negotiations
Negotiations between Greece and the so-called troika of international creditors have sought to keep the country inside the European monetary union. In Athens, coalition leaders are debating the terms of the latest package, while in other European capitals politicians are debating how to ease the country’s debt burden.
By Monami Yui and Lucy Meakin - Nov 5, 2012 8:50 AM GMT
The euro declined to the lowest in almost eight weeks against the dollar amid concern Greece will struggle to secure bailout funds, risking the nation’s future in the European currency bloc.
The 17-nation euro declined versus 12 of its 16 major counterparts after Greek Prime Minister Antonis Samaras pledged yesterday that proposed wage and pension cuts will be the last, with the plan due to face parliamentary approval as early as Nov. 7. The Dollar Index (DXY) rose for a third day before tomorrow’s U.S. presidential election. Australia’s dollar strengthened after retail sales exceeded economists’ forecasts.
“The market is increasingly losing confidence that Greece might get its extended bailout money because the governing coalition is unraveling or disagreeing more and more,” saidImre Speizer, an Auckland-based strategist at Westpac Banking Corp. (WBC) “We’ve seen the euro fall and it looks like it wants to go lower.”
The euro weakened 0.4 percent to $1.2790 at 8:39 a.m. in London after dropping to $1.2778, the lowest level since Sept. 11. The common currency declined 0.5 percent to 102.73 yen. The yen appreciated 0.1 percent to 80.32 per dollar.
Samaras, speaking to lawmakers of his New Democracy Party in Athens, said Greek society won’t tolerate any more austerity measures. The first parliamentary vote on the latest package is scheduled to take place as early as Nov. 7.
Greece Negotiations
Negotiations between Greece and the so-called troika of international creditors have sought to keep the country inside the European monetary union. In Athens, coalition leaders are debating the terms of the latest package, while in other European capitals politicians are debating how to ease the country’s debt burden.
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Re: New EC Thread
Panda Mon 5 Nov - 14:49
European and Asian leaders called for unfettered commerce and warned against protectionism as the debt crisis threatens to undermine trade ties between the world’s fastest and slowest-growing regions.
“We must open our markets,” French President Francois Hollande said today in a speech in Vientiane, Laos, where he is attending the Asia-Europe Meeting along with leaders from about 50 countries. “The biggest threat is protectionism.”
Enlarge image
Chinese Prime Minister Wen Jiabao
Hoang Dinh Nam/AFP/Getty Images
Chinese Prime Minister Wen Jiabao reviews an honor guard during a welcoming ceremony at Wattay airport before the 9th Asia-Europe summit in Vientiane, Laos on Nov. 4, 2012.
Chinese Prime Minister Wen Jiabao reviews an honor guard during a welcoming ceremony at Wattay airport before the 9th Asia-Europe summit in Vientiane, Laos on Nov. 4, 2012. Photographer: Hoang Dinh Nam/AFP/Getty Images
Enlarge image
Australia's Prime Minister Julia Gillard
Ian Waldie/Bloomberg
Gillard, Australia's prime minister, called for Australia to do more to take advantage of Asia’s economic boom.
Gillard, Australia's prime minister, called for Australia to do more to take advantage of Asia’s economic boom. Photographer: Ian Waldie/Bloomberg
Europe’s economic woes may exacerbate protectionist tendencies that make it harder to expand trade with its biggest commerce partner at a time when the U.S. and Australia are forging new agreements, according to Fredrik Erixon, head of the European Centre for International Political Economy in Brussels. Apart from a trade deal with South Korea, the 27-member European Union has seen talks lag with China, Japan, India and Southeast Asian countries since 2007.
“Europe needs to improve its policy toward the entire Asian region in order to take up a greater part of Asia’s economic expansion, but we’re not really seeing it,” Erixon said by phone. “The train is about to leave the station and Europe certainly isn’t on it.”
Europe’s leaders face pressure to boost ties with Asia after U.S. President Barack Obama declared a pivot to the region and Australian Prime Minister Julia Gillard unveiled a strategy last week to make her country “a winner in the Asian century.”At stake is safeguarding links that European economies are increasingly counting on, with the 19 Asian nations participating in a summit starting in Laos today accounting for 38 percent of the EU’s total trade last year, up from 30 percent a decade ago.
Euro-Area Slowdown
The International Monetary Fund expects the euro area’s economy to contract 0.4 percent this year, while China is forecast to grow 7.8 percent and the U.S. may expand 2.2 percent. Trade growth between the EU and Asian countries attending this week’s meetings slowed to 6 percent through the first six months of 2012 from a pace of 8 percent last year, according to the bloc’s data.
Asia’s exports to the EU will drop “quite significantly”in the near term as countries deleverage, Changyong Rhee, theAsian Development Bank’s chief economist, said by phone. Closer policy coordination is needed between leaders from the two regions to ensure a global recovery, he said.
“The U.S., Canada and Australia are more aggressive in Asia than Europe,” Rhee said. “The EU may be slow because you have to harmonize all countries together to have a free trade agreement, but once you have one FTA between the EU and another country it’s actually 27 FTAs.”
Trade Talks Stall
The EU suspended trade talks in 2009 with the 10-memberAssociation of Southeast Asian Nations, a bloc with about 600 million people, and is now negotiating separate agreements with individual countries such as Singapore, Malaysia and Vietnam. Similar talks with India that kicked off in 2007 are stalled.
During a visit to Brussels two months ago, Chinese PremierWen Jiabao urged the EU to “exercise restraint in resorting to trade-remedy measures.” The EU was the biggest market for Chinese exports last year, according to Chinese data, while China is the bloc’s No. 2 commercial partner, after the U.S.
“Free, open, and fair international trade is an important driving force for world economic growth,” Wen said in a statement released today in Vientiane, where he is also attending the summit.
‘Made in France’
Earlier in September, the EU started a probe into whether Chinese makers of solar panels sell them below cost, the largest European trade dispute of its kind covering 21 billion euros ($27 billion) of imports. China faces more EU anti-dumping duties than any other country, covering about 1 percent of its exports to the bloc.
China’s official news agency Xinhua published an editorial two weeks ago that criticized protectionist rhetoric in Europe. It singled out French Industry Minister Arnaud Montebourg, who has urged consumers to spurn cheaper imports and buy goods“Made in France.”
Wen agreed that commerce with France must be rebalanced to narrow the European nation’s trade deficit, Hollande told reporters after the two leaders met. He added that China must continue re-evaluating its currency.
“Currencies must represent more faithfully the state of our economies,” Hollande said. “States whose trade are in surplus must necessarily accept a re-evalutation of their currencies. There must be some correction to re-balance exchanges and if we want to support growth.”
Asia Help
More than 30 heads of government and state, including Gillard, Italian Prime Minister Mario Monti, Russian Prime Minister Dmitry Medvedev and Japanese Prime Minister Yoshihiko Noda are attending the summit in Laos. Germany, Spain and the U.K. sent foreign ministers, while Greece is represented by its ambassador in Vientiane.
“Asia is not able to settle Europe’s issues, but Asia can do its part to help Europe,” Singapore Prime Minister Lee Hsien Loong said in a speech. Measures include boosting consumption, broadening safety nets, liberalizing the financial system and by promoting trade, he said.
Negotiations for free trade agreements between the EU and counties including Singapore, Malaysia, and Vietnam can be“building blocks” towards an eventual deal between the EU and the Asean, Lee said.
‘Driving Force’
Norway’s sovereign wealth fund has invested $80 billion in Asian equities and bonds, Prime Minister Jens Stoltenberg told leaders at the summit today.
“Our ships are built in this region and more and more business is in Asia,” he said. “Today this region is a driving force in the global economy.”
Japan is ready to start free-trade negotiations with the EU if it can get a mandate from member states, a Japanese official told reporters last week on condition of anonymity because he was not authorized to speak publicly on the matter. Noda will meet with EU President Herman Van Rompuy and European Commission President Jose Manuel Barroso in Laos.
Noda also wants to improve ties with China and South Korea after territorial spats increased tensions in recent months, Kyodo reported, citing comments he gave before leaving Tokyo. No formal talks are scheduled between the leaders, it said.
Gillard last week called for Australia to do more to take advantage of Asia’s economic boom. She aims to boost trade with the region to at least a third of gross domestic product by 2025, compared with a quarter today.
‘Staggering’ Rise
“The scale and pace of Asia’s rise is staggering,”Gillard said in a report. “There are significant opportunities and challenges for all Australians.”
Obama’s top trade priority has been the Trans-Pacific Partnership, an agreement involving nine Asia-Pacific countries that will undergo its 15th negotiation round next month. Canada and Mexico are preparing to join, while Japan may also sign up.
The slowdown in developed economies has prompted China in recent years to increase trade ties with Asia, the Middle East and Africa, Lim Cheng Teck, who heads China operations for London-based Standard Chartered Plc, said in Bangkok last week. The bank expects use of the yuan in international trade settlement to triple within three years to $1.03 trillion, he said.
“For Europe we believe it’s kind of a structural challenge that will not be so quickly solved,” Lim said. “China is kind of saying ‘OK, let’s turn to other markets.’
“We must open our markets,” French President Francois Hollande said today in a speech in Vientiane, Laos, where he is attending the Asia-Europe Meeting along with leaders from about 50 countries. “The biggest threat is protectionism.”
Enlarge image
Chinese Prime Minister Wen Jiabao
Hoang Dinh Nam/AFP/Getty Images
Chinese Prime Minister Wen Jiabao reviews an honor guard during a welcoming ceremony at Wattay airport before the 9th Asia-Europe summit in Vientiane, Laos on Nov. 4, 2012.
Chinese Prime Minister Wen Jiabao reviews an honor guard during a welcoming ceremony at Wattay airport before the 9th Asia-Europe summit in Vientiane, Laos on Nov. 4, 2012. Photographer: Hoang Dinh Nam/AFP/Getty Images
Enlarge image
Australia's Prime Minister Julia Gillard
Ian Waldie/Bloomberg
Gillard, Australia's prime minister, called for Australia to do more to take advantage of Asia’s economic boom.
Gillard, Australia's prime minister, called for Australia to do more to take advantage of Asia’s economic boom. Photographer: Ian Waldie/Bloomberg
Europe’s economic woes may exacerbate protectionist tendencies that make it harder to expand trade with its biggest commerce partner at a time when the U.S. and Australia are forging new agreements, according to Fredrik Erixon, head of the European Centre for International Political Economy in Brussels. Apart from a trade deal with South Korea, the 27-member European Union has seen talks lag with China, Japan, India and Southeast Asian countries since 2007.
“Europe needs to improve its policy toward the entire Asian region in order to take up a greater part of Asia’s economic expansion, but we’re not really seeing it,” Erixon said by phone. “The train is about to leave the station and Europe certainly isn’t on it.”
Europe’s leaders face pressure to boost ties with Asia after U.S. President Barack Obama declared a pivot to the region and Australian Prime Minister Julia Gillard unveiled a strategy last week to make her country “a winner in the Asian century.”At stake is safeguarding links that European economies are increasingly counting on, with the 19 Asian nations participating in a summit starting in Laos today accounting for 38 percent of the EU’s total trade last year, up from 30 percent a decade ago.
Euro-Area Slowdown
The International Monetary Fund expects the euro area’s economy to contract 0.4 percent this year, while China is forecast to grow 7.8 percent and the U.S. may expand 2.2 percent. Trade growth between the EU and Asian countries attending this week’s meetings slowed to 6 percent through the first six months of 2012 from a pace of 8 percent last year, according to the bloc’s data.
Asia’s exports to the EU will drop “quite significantly”in the near term as countries deleverage, Changyong Rhee, theAsian Development Bank’s chief economist, said by phone. Closer policy coordination is needed between leaders from the two regions to ensure a global recovery, he said.
“The U.S., Canada and Australia are more aggressive in Asia than Europe,” Rhee said. “The EU may be slow because you have to harmonize all countries together to have a free trade agreement, but once you have one FTA between the EU and another country it’s actually 27 FTAs.”
Trade Talks Stall
The EU suspended trade talks in 2009 with the 10-memberAssociation of Southeast Asian Nations, a bloc with about 600 million people, and is now negotiating separate agreements with individual countries such as Singapore, Malaysia and Vietnam. Similar talks with India that kicked off in 2007 are stalled.
During a visit to Brussels two months ago, Chinese PremierWen Jiabao urged the EU to “exercise restraint in resorting to trade-remedy measures.” The EU was the biggest market for Chinese exports last year, according to Chinese data, while China is the bloc’s No. 2 commercial partner, after the U.S.
“Free, open, and fair international trade is an important driving force for world economic growth,” Wen said in a statement released today in Vientiane, where he is also attending the summit.
‘Made in France’
Earlier in September, the EU started a probe into whether Chinese makers of solar panels sell them below cost, the largest European trade dispute of its kind covering 21 billion euros ($27 billion) of imports. China faces more EU anti-dumping duties than any other country, covering about 1 percent of its exports to the bloc.
China’s official news agency Xinhua published an editorial two weeks ago that criticized protectionist rhetoric in Europe. It singled out French Industry Minister Arnaud Montebourg, who has urged consumers to spurn cheaper imports and buy goods“Made in France.”
Wen agreed that commerce with France must be rebalanced to narrow the European nation’s trade deficit, Hollande told reporters after the two leaders met. He added that China must continue re-evaluating its currency.
“Currencies must represent more faithfully the state of our economies,” Hollande said. “States whose trade are in surplus must necessarily accept a re-evalutation of their currencies. There must be some correction to re-balance exchanges and if we want to support growth.”
Asia Help
More than 30 heads of government and state, including Gillard, Italian Prime Minister Mario Monti, Russian Prime Minister Dmitry Medvedev and Japanese Prime Minister Yoshihiko Noda are attending the summit in Laos. Germany, Spain and the U.K. sent foreign ministers, while Greece is represented by its ambassador in Vientiane.
“Asia is not able to settle Europe’s issues, but Asia can do its part to help Europe,” Singapore Prime Minister Lee Hsien Loong said in a speech. Measures include boosting consumption, broadening safety nets, liberalizing the financial system and by promoting trade, he said.
Negotiations for free trade agreements between the EU and counties including Singapore, Malaysia, and Vietnam can be“building blocks” towards an eventual deal between the EU and the Asean, Lee said.
‘Driving Force’
Norway’s sovereign wealth fund has invested $80 billion in Asian equities and bonds, Prime Minister Jens Stoltenberg told leaders at the summit today.
“Our ships are built in this region and more and more business is in Asia,” he said. “Today this region is a driving force in the global economy.”
Japan is ready to start free-trade negotiations with the EU if it can get a mandate from member states, a Japanese official told reporters last week on condition of anonymity because he was not authorized to speak publicly on the matter. Noda will meet with EU President Herman Van Rompuy and European Commission President Jose Manuel Barroso in Laos.
Noda also wants to improve ties with China and South Korea after territorial spats increased tensions in recent months, Kyodo reported, citing comments he gave before leaving Tokyo. No formal talks are scheduled between the leaders, it said.
Gillard last week called for Australia to do more to take advantage of Asia’s economic boom. She aims to boost trade with the region to at least a third of gross domestic product by 2025, compared with a quarter today.
‘Staggering’ Rise
“The scale and pace of Asia’s rise is staggering,”Gillard said in a report. “There are significant opportunities and challenges for all Australians.”
Obama’s top trade priority has been the Trans-Pacific Partnership, an agreement involving nine Asia-Pacific countries that will undergo its 15th negotiation round next month. Canada and Mexico are preparing to join, while Japan may also sign up.
The slowdown in developed economies has prompted China in recent years to increase trade ties with Asia, the Middle East and Africa, Lim Cheng Teck, who heads China operations for London-based Standard Chartered Plc, said in Bangkok last week. The bank expects use of the yuan in international trade settlement to triple within three years to $1.03 trillion, he said.
“For Europe we believe it’s kind of a structural challenge that will not be so quickly solved,” Lim said. “China is kind of saying ‘OK, let’s turn to other markets.’
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Re: New EC Thread
Panda Mon 5 Nov - 15:29
World-Beating Euro Imperiled by Biggest Loan Drop Since ’09
By Lukanyo Mnyanda and Emma Charlton - Nov 5, 2012 9:11 AM GMT
The euro’s three-month rally against all but one of its major peers is imperiled by a deepening credit crunch for European companies that adds to the risk of another recession as the region’s counterparts recover.
The currency has weakened 2.8 percent versus the dollar from a four-month high on Sept. 17 as small and medium-sized companies that Deutsche Bank AG says generate as much as 70 percent of the economy are starved of credit. Loans from European banks plunged in September by 0.8 percent from a year earlier. The last time lending contracted that much, in October 2009, the euro fell 5.8 percent in the following three months.
Enlarge image
Euro Beating World
Simon Dawson/Bloomberg
The 17-nation common currency weakened 0.8 percent last week to $1.2835, and strengthened 0.2 percent to 103.24 yen.
The 17-nation common currency weakened 0.8 percent last week to $1.2835, and strengthened 0.2 percent to 103.24 yen. Photographer: Simon Dawson/Bloomberg
Enlarge image
European Central Bank President Mario Draghi
Michele Tantussi/Bloomberg
Mario Draghi, president of the European Central Bank.
Mario Draghi, president of the European Central Bank. Photographer: Michele Tantussi/Bloomberg
Related stories:
While European Central Bank President Mario Draghi has driven down speculation on the disintegration of the currency bloc, the median of 48 analyst estimates compiled by Bloomberg is for a drop of about 2.3 percent against the dollar by next September. Companies from Italian window maker Fenster Group Srl to Faustino e Ferreira, a Portuguese building materials firm, say they can’t get financing to expand.
“Draghi’s action has reduced sovereign risk but it’s not enough to improve the credit conditions in the periphery,” Athanasios Vamvakidis, the head of Group-of-10 foreign-exchange strategy at Bank of America Merrill Lynch in London, said in a Nov. 1 phone interview. “Private-sector credit growth continues to be negative and lending rates remain a problem. This will continue affecting the euro.”
Draghi’s Offer
The 17-nation common currency fell as much as 0.4 percent to $1.2778, the weakest level since Sept. 11, before trading at $1.2797 at 8:59 a.m. London time, down 0.3 percent from the close in New York last week. It slid 0.5 percent to 102.73 yen from Nov. 2, when it also dropped 0.5 percent.
The euro has slipped from as high as $1.3172 on Sept. 17 as Spanish Prime Minister Mariano Rajoy delayed a decision on whether to accept Draghi’s offer to buy bonds to cut borrowing costs. It’s still up from this year’s low of $1.2043 on July 24, when Spain’s surging yields threatened to shut the region’s fourth-largest economy out of financial markets.
After Draghi unveiled his bond-purchase plan on Sept. 6, strategists surveyed by Bloomberg lifted their median euro prediction for the third quarter of 2013 to $1.25 from as low as $1.21 on Sept. 18.
Bank of America is more pessimistic, Vamvakidis said, calling for the euro to decline to $1.23 by the end of this year and to $1.20 in the third quarter of 2013 because the ECB will have to do more to tackle the squeeze on lending.
‘Hard Work’
Massimo Zappia, who started Fenster Group in Conegliano, northern Italy, after his previous employer went bankrupt, had to rescind signed contracts to supply 3,200 windows as 20 banks refused him loans to buy the raw materials and machinery needed to produce them.
“Banks keep telling me: ‘Why should I lend you money if I don’t lend it to your clients who want to buy a house?’” Zappia said in a telephone interview on Oct. 30. “Bureaucracy and the credit crunch are slaking the energy of those entrepreneurs, like me, who have been trying to react to the crisis with hard work, dedication and innovation. It’s like a bucket of cold water on a timid fire that is trying to remain lit.”
September’s slump in lending was the largest since October 2009, when a new Greek government sparked the debt crisis by revealing that its predecessor had underestimated the nation’s budget shortfall.
Sliding Euro
That was followed by a slide to $1.3863 on Jan. 29, 2010, from $1.4719 on Oct. 30, 2009. The currency weakened against all except two of its 16 major peers in that period and extended its drop to $1.1877 in June 2010, falling below the average of $1.21 since its inception in 1999.
Betting against the euro would be a mistake because the ECB’s bond-purchase program will boost demand for European debt and buoy other assets, according to Hans Redeker, the London- based head of foreign-exchange strategy at Morgan Stanley, who predicts the currency will rise to $1.35 this year.
“Markets are going to rally and it’s going to be accompanied by a stronger euro,” Redeker said in an Oct. 31 telephone interview. Spain will request aid and trigger ECB purchases “sooner or later,” he said.
While bank loans to smaller companies are declining, large firms in Europe’s periphery of Greece, Italy, Ireland, Portugal and Spain sold 7 billion euros of debt last month, the most since October 2009, data compiled by Bloomberg show.
Loan Squeeze
Italian utility Enel SpA (ENEL) issued 2 billion euros of bonds on Oct. 8, while Portugal Telecom SGPS SA (PTC) sold 750 million euros of senior unsecured notes in its first benchmark-sized deal since February 2011.
That’s no comfort for Faustino e Ferreira, based in Leiria, Portugal, which has about 100 workers.
The company says it has been unable to get financing from banks to meet demand for its products from France, Angola and Mozambique. It rejected an offer for a four-year loan of as much as 600,000 euros at an interest rate of 8 percent, which would have been four times the amount charged two years earlier.
“Banks are simply not lending,” Paulo Sousa Alves, a company spokesman, said in phone interview on Oct. 29. “If we could solve our financing problems our sales would increase about 60 percent a year and we could hire more people.”
The volume of loans to non-financial companies in the periphery is 45.7 billion euros this year, down from 62.2 billion euros for the same period of 2011, according to data compiled by Bloomberg.
Spanish Wine
Banks are charging interest at 352.3 basis points, or 3.523 percentage points, more than benchmark rates, up from 314.7 basis points a year ago, the data show.
Access to bank loans for small and medium-sized companies deteriorated in the period from April to September versus the prior six months, according to a Nov. 2 ECB report. Rejection rates for companies applying for loans rose to 15 percent from 13 percent, based on the central bank’s survey of 7,514 firms between Sept. 3 and Oct. 11. That’s the highest since 2009.
“Funding costs have increased significantly in the last three years,” said Luis Zapatero, chairman of Bodegas Riojanas SA (RIO), a La Rioja, Spain-based winemaker founded in 1890. “We really need those costs to decline because it’s affecting our profitability very negatively.”
European banks may have to sell as much as $4.5 trillion in assets through the end of 2013, which may limit lending and curb growth in Greece, Italy, Ireland, Portugal and Spain by as much as 4 percentage points, the Washington-based International Monetary Fund said in its Global Financial Stability Report, published on Oct. 9.
U.S. Lending
The supply of credit in Europe’s weaker economies is forecast to decline 9 percent through the end of next year under the IMF’s baseline scenario, the report said.
In contrast, commercial and industrial loans by U.S. banks rose to almost $1.5 trillion in the week through Oct. 17, up 24 percent from the post-crisis low of $1.2 trillion in October 2010 and the most since May 2009, Federal Reserve data show.
“Corporates in Europe cannot gain access to fair market loans, which is the core of growth,” Robert Savage, chief strategist at New York-based currency fund FX Concepts LLC, which oversees about $3 billion, said in an Oct. 31 telephone interview. “That makes me negative on the euro.”
The shared currency will probably fall to $1.25 by the end of the year and to $1.15 by the end of 2013, Savage said.
Lagging Behind
An ECB survey of 131 lenders between Sept. 20 and Oct. 9 showed the proportion of banks reporting tighter standards on loans to companies rose to a net 15 percent in the three months through September from 10 percent in the second quarter, the central bank said on Oct. 31.
Euro-area growth is lagging behind all G-10 nations, with the U.K. the only other economy set to shrink this year, analyst estimates compiled by Bloomberg show. The nations that share the currency will expand 0.2 percent in 2013, compared with an average of 1.34 percent for the G-10, separate surveys of economists showed yesterday.
Euro-area unemployment climbed to a record 11.6 percent in September, the European Union’s statistics office in Luxembourg said on Oct. 31. The ECB will leave its benchmark interest rate at a record-low 0.75 percent on Nov. 8, according to the median prediction of 63 economists surveyed by Bloomberg.
Eilis Quinlan, who started accountancy firm Quinlan & Co. in Naas, Ireland in 1992, said about a quarter of the company’s 400 clients are considering firing workers because they can’t get loans from banks.
“It’s terribly disheartening,” Quinlan said in a Nov. 1 phone interview. “There are seriously viable businesses that have orders confirmed and they can’t get the working capital, so they are having to close, to lay people off day after day.”
By Lukanyo Mnyanda and Emma Charlton - Nov 5, 2012 9:11 AM GMT
The euro’s three-month rally against all but one of its major peers is imperiled by a deepening credit crunch for European companies that adds to the risk of another recession as the region’s counterparts recover.
The currency has weakened 2.8 percent versus the dollar from a four-month high on Sept. 17 as small and medium-sized companies that Deutsche Bank AG says generate as much as 70 percent of the economy are starved of credit. Loans from European banks plunged in September by 0.8 percent from a year earlier. The last time lending contracted that much, in October 2009, the euro fell 5.8 percent in the following three months.
Enlarge image
Euro Beating World
Simon Dawson/Bloomberg
The 17-nation common currency weakened 0.8 percent last week to $1.2835, and strengthened 0.2 percent to 103.24 yen.
The 17-nation common currency weakened 0.8 percent last week to $1.2835, and strengthened 0.2 percent to 103.24 yen. Photographer: Simon Dawson/Bloomberg
Enlarge image
European Central Bank President Mario Draghi
Michele Tantussi/Bloomberg
Mario Draghi, president of the European Central Bank.
Mario Draghi, president of the European Central Bank. Photographer: Michele Tantussi/Bloomberg
Related stories:
- Euro Falls to Eight-Week Low on Greece Aid Concern
- Euro Area Resolve to Secure Single Currency Faces Greek Test
While European Central Bank President Mario Draghi has driven down speculation on the disintegration of the currency bloc, the median of 48 analyst estimates compiled by Bloomberg is for a drop of about 2.3 percent against the dollar by next September. Companies from Italian window maker Fenster Group Srl to Faustino e Ferreira, a Portuguese building materials firm, say they can’t get financing to expand.
“Draghi’s action has reduced sovereign risk but it’s not enough to improve the credit conditions in the periphery,” Athanasios Vamvakidis, the head of Group-of-10 foreign-exchange strategy at Bank of America Merrill Lynch in London, said in a Nov. 1 phone interview. “Private-sector credit growth continues to be negative and lending rates remain a problem. This will continue affecting the euro.”
Draghi’s Offer
The 17-nation common currency fell as much as 0.4 percent to $1.2778, the weakest level since Sept. 11, before trading at $1.2797 at 8:59 a.m. London time, down 0.3 percent from the close in New York last week. It slid 0.5 percent to 102.73 yen from Nov. 2, when it also dropped 0.5 percent.
The euro has slipped from as high as $1.3172 on Sept. 17 as Spanish Prime Minister Mariano Rajoy delayed a decision on whether to accept Draghi’s offer to buy bonds to cut borrowing costs. It’s still up from this year’s low of $1.2043 on July 24, when Spain’s surging yields threatened to shut the region’s fourth-largest economy out of financial markets.
After Draghi unveiled his bond-purchase plan on Sept. 6, strategists surveyed by Bloomberg lifted their median euro prediction for the third quarter of 2013 to $1.25 from as low as $1.21 on Sept. 18.
Bank of America is more pessimistic, Vamvakidis said, calling for the euro to decline to $1.23 by the end of this year and to $1.20 in the third quarter of 2013 because the ECB will have to do more to tackle the squeeze on lending.
‘Hard Work’
Massimo Zappia, who started Fenster Group in Conegliano, northern Italy, after his previous employer went bankrupt, had to rescind signed contracts to supply 3,200 windows as 20 banks refused him loans to buy the raw materials and machinery needed to produce them.
“Banks keep telling me: ‘Why should I lend you money if I don’t lend it to your clients who want to buy a house?’” Zappia said in a telephone interview on Oct. 30. “Bureaucracy and the credit crunch are slaking the energy of those entrepreneurs, like me, who have been trying to react to the crisis with hard work, dedication and innovation. It’s like a bucket of cold water on a timid fire that is trying to remain lit.”
September’s slump in lending was the largest since October 2009, when a new Greek government sparked the debt crisis by revealing that its predecessor had underestimated the nation’s budget shortfall.
Sliding Euro
That was followed by a slide to $1.3863 on Jan. 29, 2010, from $1.4719 on Oct. 30, 2009. The currency weakened against all except two of its 16 major peers in that period and extended its drop to $1.1877 in June 2010, falling below the average of $1.21 since its inception in 1999.
Betting against the euro would be a mistake because the ECB’s bond-purchase program will boost demand for European debt and buoy other assets, according to Hans Redeker, the London- based head of foreign-exchange strategy at Morgan Stanley, who predicts the currency will rise to $1.35 this year.
“Markets are going to rally and it’s going to be accompanied by a stronger euro,” Redeker said in an Oct. 31 telephone interview. Spain will request aid and trigger ECB purchases “sooner or later,” he said.
While bank loans to smaller companies are declining, large firms in Europe’s periphery of Greece, Italy, Ireland, Portugal and Spain sold 7 billion euros of debt last month, the most since October 2009, data compiled by Bloomberg show.
Loan Squeeze
Italian utility Enel SpA (ENEL) issued 2 billion euros of bonds on Oct. 8, while Portugal Telecom SGPS SA (PTC) sold 750 million euros of senior unsecured notes in its first benchmark-sized deal since February 2011.
That’s no comfort for Faustino e Ferreira, based in Leiria, Portugal, which has about 100 workers.
The company says it has been unable to get financing from banks to meet demand for its products from France, Angola and Mozambique. It rejected an offer for a four-year loan of as much as 600,000 euros at an interest rate of 8 percent, which would have been four times the amount charged two years earlier.
“Banks are simply not lending,” Paulo Sousa Alves, a company spokesman, said in phone interview on Oct. 29. “If we could solve our financing problems our sales would increase about 60 percent a year and we could hire more people.”
The volume of loans to non-financial companies in the periphery is 45.7 billion euros this year, down from 62.2 billion euros for the same period of 2011, according to data compiled by Bloomberg.
Spanish Wine
Banks are charging interest at 352.3 basis points, or 3.523 percentage points, more than benchmark rates, up from 314.7 basis points a year ago, the data show.
Access to bank loans for small and medium-sized companies deteriorated in the period from April to September versus the prior six months, according to a Nov. 2 ECB report. Rejection rates for companies applying for loans rose to 15 percent from 13 percent, based on the central bank’s survey of 7,514 firms between Sept. 3 and Oct. 11. That’s the highest since 2009.
“Funding costs have increased significantly in the last three years,” said Luis Zapatero, chairman of Bodegas Riojanas SA (RIO), a La Rioja, Spain-based winemaker founded in 1890. “We really need those costs to decline because it’s affecting our profitability very negatively.”
European banks may have to sell as much as $4.5 trillion in assets through the end of 2013, which may limit lending and curb growth in Greece, Italy, Ireland, Portugal and Spain by as much as 4 percentage points, the Washington-based International Monetary Fund said in its Global Financial Stability Report, published on Oct. 9.
U.S. Lending
The supply of credit in Europe’s weaker economies is forecast to decline 9 percent through the end of next year under the IMF’s baseline scenario, the report said.
In contrast, commercial and industrial loans by U.S. banks rose to almost $1.5 trillion in the week through Oct. 17, up 24 percent from the post-crisis low of $1.2 trillion in October 2010 and the most since May 2009, Federal Reserve data show.
“Corporates in Europe cannot gain access to fair market loans, which is the core of growth,” Robert Savage, chief strategist at New York-based currency fund FX Concepts LLC, which oversees about $3 billion, said in an Oct. 31 telephone interview. “That makes me negative on the euro.”
The shared currency will probably fall to $1.25 by the end of the year and to $1.15 by the end of 2013, Savage said.
Lagging Behind
An ECB survey of 131 lenders between Sept. 20 and Oct. 9 showed the proportion of banks reporting tighter standards on loans to companies rose to a net 15 percent in the three months through September from 10 percent in the second quarter, the central bank said on Oct. 31.
Euro-area growth is lagging behind all G-10 nations, with the U.K. the only other economy set to shrink this year, analyst estimates compiled by Bloomberg show. The nations that share the currency will expand 0.2 percent in 2013, compared with an average of 1.34 percent for the G-10, separate surveys of economists showed yesterday.
Euro-area unemployment climbed to a record 11.6 percent in September, the European Union’s statistics office in Luxembourg said on Oct. 31. The ECB will leave its benchmark interest rate at a record-low 0.75 percent on Nov. 8, according to the median prediction of 63 economists surveyed by Bloomberg.
Eilis Quinlan, who started accountancy firm Quinlan & Co. in Naas, Ireland in 1992, said about a quarter of the company’s 400 clients are considering firing workers because they can’t get loans from banks.
“It’s terribly disheartening,” Quinlan said in a Nov. 1 phone interview. “There are seriously viable businesses that have orders confirmed and they can’t get the working capital, so they are having to close, to lay people off day after day.”
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Panda Tue 6 Nov - 8:42
G20
Europe lectured over crisis
19 June 2012
PresseuropLibération, De Standaard, Die Zeit, The Indian Express
Shared 47 times in 10 languages
European euphoria over the 17 June Greek elections which returned a party favourable to the memorandum signed with the IMF, the ECB and the EU has been quickly dispelled by the G20 meeting in Los Cabos Mexico, where European leaders have been lectured by their international partners, and in particular the US and emerging countries, for failing to take rapid action to address the Eurozone crisis and relaunch Europe’s economy.
“Much of the criticism amounted to a thinly disguised invitation to liberalise the European model,” notes Paris daily Libération, which continues –
In the same vein, Die Zeit remarks that “Europe will not tolerate taking lessons.” Reporting on the position adopted by Angela Merkel and Barroso at the G20, the German weekly remarks that the Europeans, who will not accept criticism of their management of the crisis, are insisting on the need to make the EU more democratic through greater integration. The Hamburg newspaper continues –
Source profiles
Shared 47 times in 10 languages
Europe lectured over crisis
19 June 2012
PresseuropLibération, De Standaard, Die Zeit, The Indian Express
Shared 47 times in 10 languages
European euphoria over the 17 June Greek elections which returned a party favourable to the memorandum signed with the IMF, the ECB and the EU has been quickly dispelled by the G20 meeting in Los Cabos Mexico, where European leaders have been lectured by their international partners, and in particular the US and emerging countries, for failing to take rapid action to address the Eurozone crisis and relaunch Europe’s economy.
“Much of the criticism amounted to a thinly disguised invitation to liberalise the European model,” notes Paris daily Libération, which continues –
Both affirming that “Europe does not need to take lessons,” the two leaders were keen to show that they would not give in to external pressure, remarks De Standaard. The Brussels daily adds that Barroso was very dismissive in his attitude to countries that criticised measures adopted to address the crisis in Europe: “"Frankly, we are not coming here to receive lessons in terms of democracy”.
The European model is based on support for a social compromise, which in planetary terms is increasingly a minority view. So it was no accident that Commission President José Manuel Barroso European Council President Herman Van Rompuy’s decided to hold a press conference in advance of the official opening of the G20.
In the same vein, Die Zeit remarks that “Europe will not tolerate taking lessons.” Reporting on the position adopted by Angela Merkel and Barroso at the G20, the German weekly remarks that the Europeans, who will not accept criticism of their management of the crisis, are insisting on the need to make the EU more democratic through greater integration. The Hamburg newspaper continues –
According to the Indian Express, emerging countries view the European financial crisis and the response to it as “a leadership crisis.” The New Delhi daily explains that the EU sorely needs a statesman like B.R. Ambedkar –
In discussions, Merkel and US President Barack Obama found common ground on the urgent need for progress on European integration […]. Barroso wants to adapt the financial structures of the union to pave the way for the introduction of eurobonds which, to date, Merkel has consistently refused to accept in the absence of greater financial and political integration.
On the web
Despite its inability to act, in time, competently and with authority, the EU will continue to seek a solution to its current economic woes within the framework of a union. However, it has to get its sequencing right. Last week’s initiative of seeking a banking union amounts to placing the cart before the horse. Without a fiscal union and an EU-wide bailout strategy, just a banking union will have no takers.
The challenge for the EU is to find its Ambedkar. It needs a constitution that will enable a continental political leadership to offer continent-wide solutions to a continent-wide problem. Europe needs emotional unity as much as it needs a new strategy for generating employment in a globally competitive way. If this sounds daunting and impossible, then the EU should return to what many in Britain prefer – a normal single market, like the South Asian Free Trade Area (SAFTA)! A single market with multiple currencies and sovereign member nations. Britain’s Eurosceptics in fact advocate this course. That the EU should give up the idea of a fiscal and monetary union and remain just a single market. But that would also imply the decline of Europe as a geopolitical power.
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Shared 47 times in 10 languages
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Re: New EC Thread
Panda Tue 6 Nov - 9:40
Anger as EU budget fails to get clean bill of health for 18th year in a row
British opposition to European Union budget increases will harden today after its auditor's report failed to give a clean bill of health to £89 billion (€111.2bn) of spending "affected by material error".
Photo: AP
By Bruno Waterfield, Brussels
9:11AM GMT 06 Nov 2012
Comment
The findings by the European Court of Auditors that controls over 86 per cent of the EU budgets are only "partially effective" will further polarise a fierce battle over European Commission demands for increases in spending.
Vitor Caldeira, the ECA's chairman, said that auditors had "found too many cases of EU money not hitting the target or being used sub-optimally".
"This annual report's message is consistent with previous years, but this year it matters more than ever. With Europe's public finances under severe pressure, there remains scope to spend EU money more efficiently and in a better targeted manner," he said.
"Member states must agree on better rules for how EU money is spent, and member states and the commission must enforce them properly. In this way, the EU budget could be used more efficiently and effectively to deliver greater added value for citizens."
Despite 18 years of critical reports by the EU auditors, the Commission and European Parliament have defied national austerity measures by agreeing a series of demands that will increase Brussels expenditure by £95 billion over the next eight years.
The frequency rate for "material error" rose by eight per cent in 2011, from 36 to 44 per cent, with £4 billion (€5.1bn) in EU payments directly affected by irregularities, funds that are overseen in Brussels but mostly spent by national governments.
The report will pile renewed pressure on David Cameron, the Prime Minister, to be tougher during negotiations on the future EU budget following his embarrassing defeat on the issue in the House of Commons last week.
"This is now the 18th year in a row that the European Court of Auditors have refused to give the EU Budget a clean bill of health. Worse still the 'error rate', shorthand for unnacounted money, is on the rise," said Marta Andreasen, a Ukip MEP and member of the European Parliamentﾒs budget control committee.
"If this report, outlining as it does the continued gross mismanagement of EU funds, doesn't set alarm bells ringing in Downing Street then nothing will."
A fortnight ago, MEPs and commission rejected Britain's call for an EU spending freeze, by tabling demands for increased expenditure in 2012 and 2013.
The commission has demanded a £7.3 billion spending increase by the end of this year to meet a funding shortfall, figures that are disputed by Britain and other governments.
MEPs have also voted to reinstate over £6.5 billion in funding that had been cut by national government from next year's budget.
On top of increase over the next two years, the EU assembly and commission have demanded an 11 per cent increase in the "multi-annual financing framework" (MFF) for 2014-2020.
The combined series of demands would mean that British taxpayers will have to pay out an extra £11.5 billion in contributions to fund the increases in Brussels budgets unless the spending rises can be blocked by governments.
===========================
It was reported a long time ago that the Auditors could not sign off the Accounts because of the lack of information on
expenditure. Maggie Thatcher, an Economist, always fought for cuts in the amount Britain paid to the EU , now, when so many million EU Members are unemployed , if this matterr is not resolved and a paring down of the EU buerocracy NOW there is no hope of stability and fairness.
British opposition to European Union budget increases will harden today after its auditor's report failed to give a clean bill of health to £89 billion (€111.2bn) of spending "affected by material error".
Photo: AP
By Bruno Waterfield, Brussels
9:11AM GMT 06 Nov 2012
Comment The findings by the European Court of Auditors that controls over 86 per cent of the EU budgets are only "partially effective" will further polarise a fierce battle over European Commission demands for increases in spending.
Vitor Caldeira, the ECA's chairman, said that auditors had "found too many cases of EU money not hitting the target or being used sub-optimally".
"This annual report's message is consistent with previous years, but this year it matters more than ever. With Europe's public finances under severe pressure, there remains scope to spend EU money more efficiently and in a better targeted manner," he said.
"Member states must agree on better rules for how EU money is spent, and member states and the commission must enforce them properly. In this way, the EU budget could be used more efficiently and effectively to deliver greater added value for citizens."
Despite 18 years of critical reports by the EU auditors, the Commission and European Parliament have defied national austerity measures by agreeing a series of demands that will increase Brussels expenditure by £95 billion over the next eight years.
- The auditors also criticised the commission for failing to use "all available means to enforce recovery" of public money in 57 per cent of audited cases where fines or penalties were levied on EU funded projects where irregularities had taken place.
The frequency rate for "material error" rose by eight per cent in 2011, from 36 to 44 per cent, with £4 billion (€5.1bn) in EU payments directly affected by irregularities, funds that are overseen in Brussels but mostly spent by national governments.
The report will pile renewed pressure on David Cameron, the Prime Minister, to be tougher during negotiations on the future EU budget following his embarrassing defeat on the issue in the House of Commons last week.
"This is now the 18th year in a row that the European Court of Auditors have refused to give the EU Budget a clean bill of health. Worse still the 'error rate', shorthand for unnacounted money, is on the rise," said Marta Andreasen, a Ukip MEP and member of the European Parliamentﾒs budget control committee.
"If this report, outlining as it does the continued gross mismanagement of EU funds, doesn't set alarm bells ringing in Downing Street then nothing will."
A fortnight ago, MEPs and commission rejected Britain's call for an EU spending freeze, by tabling demands for increased expenditure in 2012 and 2013.
The commission has demanded a £7.3 billion spending increase by the end of this year to meet a funding shortfall, figures that are disputed by Britain and other governments.
MEPs have also voted to reinstate over £6.5 billion in funding that had been cut by national government from next year's budget.
On top of increase over the next two years, the EU assembly and commission have demanded an 11 per cent increase in the "multi-annual financing framework" (MFF) for 2014-2020.
The combined series of demands would mean that British taxpayers will have to pay out an extra £11.5 billion in contributions to fund the increases in Brussels budgets unless the spending rises can be blocked by governments.
===========================
It was reported a long time ago that the Auditors could not sign off the Accounts because of the lack of information on
expenditure. Maggie Thatcher, an Economist, always fought for cuts in the amount Britain paid to the EU , now, when so many million EU Members are unemployed , if this matterr is not resolved and a paring down of the EU buerocracy NOW there is no hope of stability and fairness.
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Re: New EC Thread
Panda Tue 6 Nov - 10:27
Debt crisis: Greece 48-hour strikes anti-austerity strikes begin - live
Greece's powerful main public and private sector unions launch a 48-hour strike today against the austerity budget whcih is due to be voted on by parliament on Wednesday.
Greece is facing two days of strikes as they protest against the government austerity budget, which parliament is due to vote on on Wednesday.
By Rebecca Clancy
9:52AM GMT 06 Nov 2012
36 Comments
runUpdate = true;
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2012-11-06 10:17:54.0
http://www.telegraph.co.uk/finance/debt-crisis-live/9656859/Debt-crisis-Greece-48-hour-strikes-anti-austerity-strikes-begin-live.html?service=artBody
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• UK's economy will grow faster than other European countries
• 'Mafiosi' to gain most from Cyprus bail-out
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• ECB investigates if Spanish loans broke rules
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Latest
10.17 Back to Greece. The austerity budget was handed in to parliament late last night and some journalists have got their hands on it and you can read it here (it's all in Greek).
To save you the time of learning Greek and then having to read the budget Yiannis Mouzakis has noted some key points.
Twitter: Yiannis Mouzakis - Again, #Greece gov follows troika demands, gives up 2013 primary surplus that allows servicing all privatelyheld debt http://t.co/6wQlPmR3
The bits to note in the budget
09.58 Back in the UK, industrial output fell more than expected in September, reinforcing fears that Britain's recovery will struggle to gather pace towards the end of the year.
The wider reading of industrial output, which includes energy production and mining, fell by 1.7pc in September after a 0.5pc drop in August, the Office for National Statistics said.
Excluding a decline in June that was affected by an extra public holiday, the monthly reading was the lowest since August 2009 and below forecasts for a 0.6pc drop on the month.
09.52And here are those protests arriving at the square in Athens, from Peter Oliver, RT news correspondent.
Twitter: Peter Oliver - First demonstrators arrive at #syntagma sq to protest fresh austerity measures in #Greece http://t.co/DaAoQ6hu
And here is his picture
09.45 Back over to Athens where the Police are getting ready at Syntagma Sqauare ahead of the demonstrations in the capital (see 08.20).
Twitter: Peter Oliver - Police getting ready at #syntagma square ahead of demonstration crowds expected in about an hour #Greece http://t.co/irq9db2F
And here is his picture:
09.22 Some more PMI figures to report, this time its the eurozone composite PMI which shows that the combined output of the manufacturing and services sector fell at the fastest pace since June 2009.
Greece's powerful main public and private sector unions launch a 48-hour strike today against the austerity budget whcih is due to be voted on by parliament on Wednesday.
Greece is facing two days of strikes as they protest against the government austerity budget, which parliament is due to vote on on Wednesday.
By Rebecca Clancy
9:52AM GMT 06 Nov 2012
36 Comments runUpdate = true;
90000
2012-11-06 10:17:54.0
http://www.telegraph.co.uk/finance/debt-crisis-live/9656859/Debt-crisis-Greece-48-hour-strikes-anti-austerity-strikes-begin-live.html?service=artBody
This page will automatically update every 90 secondsOn Off
• UK's economy will grow faster than other European countries
• 'Mafiosi' to gain most from Cyprus bail-out
• Bank of England to vote against stimulus
• ECB investigates if Spanish loans broke rules
• Merkel: crisis will last at least another five years
Latest
10.17 Back to Greece. The austerity budget was handed in to parliament late last night and some journalists have got their hands on it and you can read it here (it's all in Greek).
To save you the time of learning Greek and then having to read the budget Yiannis Mouzakis has noted some key points.
Twitter: Yiannis Mouzakis - Again, #Greece gov follows troika demands, gives up 2013 primary surplus that allows servicing all privatelyheld debt http://t.co/6wQlPmR3
The bits to note in the budget
09.58 Back in the UK, industrial output fell more than expected in September, reinforcing fears that Britain's recovery will struggle to gather pace towards the end of the year.
The wider reading of industrial output, which includes energy production and mining, fell by 1.7pc in September after a 0.5pc drop in August, the Office for National Statistics said.
Excluding a decline in June that was affected by an extra public holiday, the monthly reading was the lowest since August 2009 and below forecasts for a 0.6pc drop on the month.
09.52And here are those protests arriving at the square in Athens, from Peter Oliver, RT news correspondent.
Twitter: Peter Oliver - First demonstrators arrive at #syntagma sq to protest fresh austerity measures in #Greece http://t.co/DaAoQ6hu
And here is his picture
09.45 Back over to Athens where the Police are getting ready at Syntagma Sqauare ahead of the demonstrations in the capital (see 08.20).
Twitter: Peter Oliver - Police getting ready at #syntagma square ahead of demonstration crowds expected in about an hour #Greece http://t.co/irq9db2F
And here is his picture:
09.22 Some more PMI figures to report, this time its the eurozone composite PMI which shows that the combined output of the manufacturing and services sector fell at the fastest pace since June 2009.
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Re: New EC Thread
Panda Tue 6 Nov - 12:56
Greece: General Strike Before Austerity Vote
Public services grind to a halt in Greece as the debt-laden country prepares for a crucial vote on its financial future.
12:46pm UK, Tuesday 06 November 2012
Protests in Athens have attracted more than 35,000 people
Eurostat
Graph: Greece 10-Year Economic Growth
A two-day general strike is under way in Greece as the country's parliament prepares to vote on a new round of austerity measures.
Tens of thousands joined two marches in Athens in protest against the 13.5bn euro (£10.8bn) package of proposed cuts and tax increases, which include a rise in the retirement age to 67 as well as pensions being slashed by up to 15% for workers whose pots are worth more than 1,000 euros (£800) per month.
The effects of the strike - the third general strike in six weeks organised by the country's two main unions - are being felt in both the public and private sectors with at least hundreds of thousands failing to show for work.
Many schools, banks and local government offices have been closed while scores of flights have been cancelled because air traffic controllers joined the walkout.
The General Strike has largely shut down the Greek public transport system
Public bus workers in the capital and taxi drivers as well as metro, tram and train workers also walked out, paralysing traffic in the capital.
Ferry lines were also crippled, as ships linking to Greece's islands remained docked.
The government argues that the strikes only make the country's dire economic situation more perilous.
It needs the austerity bill to pass through parliament to secure crucial international aid totalling 31.5bn euros (£25bn) and prevent the debt-laden nation from potentially defaulting later this month.
According to EU economic and monetary affairs commissioner Olli Rehn, the international lenders and Greece are on track to reach a deal to unfreeze the next tranche of loans at a meeting of eurozone finance ministers on November 12.
The EU, European Central Bank and International Monetary Fund demanded more savings in return for further financial support.
The austerity package, which was put to the Greek parliament late on Monday, would also include salary cuts for academics, hospital doctors, judges, diplomats and members of the armed forces.
Greek MPs are due to hold an emergency vote on Wednesday with opposition critics saying the measures will only deepen the country's five-year recession.
It is understood unions are lobbying sceptics of the plan in a bid to force a defeat on the government - a nightmare scenario for the pro-euro camp which could force the country back to the drachma.
But there is support among the public for the austerity plan as many admit there may not be a better solution.
Yannis Levas, who works in a recruitment company aimed at finding jobs for Greeks abroad, called the measures "a double-edged sword".
"On the one side they must not go through, on the other they must. There is always that dilemma if we will return or not to the drachma," he said.
Public services grind to a halt in Greece as the debt-laden country prepares for a crucial vote on its financial future.
12:46pm UK, Tuesday 06 November 2012
Protests in Athens have attracted more than 35,000 people
Eurostat
Graph: Greece 10-Year Economic Growth
A two-day general strike is under way in Greece as the country's parliament prepares to vote on a new round of austerity measures.
Tens of thousands joined two marches in Athens in protest against the 13.5bn euro (£10.8bn) package of proposed cuts and tax increases, which include a rise in the retirement age to 67 as well as pensions being slashed by up to 15% for workers whose pots are worth more than 1,000 euros (£800) per month.
The effects of the strike - the third general strike in six weeks organised by the country's two main unions - are being felt in both the public and private sectors with at least hundreds of thousands failing to show for work.
Many schools, banks and local government offices have been closed while scores of flights have been cancelled because air traffic controllers joined the walkout.
The General Strike has largely shut down the Greek public transport system Public bus workers in the capital and taxi drivers as well as metro, tram and train workers also walked out, paralysing traffic in the capital.
Ferry lines were also crippled, as ships linking to Greece's islands remained docked.
The government argues that the strikes only make the country's dire economic situation more perilous.
It needs the austerity bill to pass through parliament to secure crucial international aid totalling 31.5bn euros (£25bn) and prevent the debt-laden nation from potentially defaulting later this month.
According to EU economic and monetary affairs commissioner Olli Rehn, the international lenders and Greece are on track to reach a deal to unfreeze the next tranche of loans at a meeting of eurozone finance ministers on November 12.
The EU, European Central Bank and International Monetary Fund demanded more savings in return for further financial support.
The austerity package, which was put to the Greek parliament late on Monday, would also include salary cuts for academics, hospital doctors, judges, diplomats and members of the armed forces.
Greek MPs are due to hold an emergency vote on Wednesday with opposition critics saying the measures will only deepen the country's five-year recession.
It is understood unions are lobbying sceptics of the plan in a bid to force a defeat on the government - a nightmare scenario for the pro-euro camp which could force the country back to the drachma.
But there is support among the public for the austerity plan as many admit there may not be a better solution.
Yannis Levas, who works in a recruitment company aimed at finding jobs for Greeks abroad, called the measures "a double-edged sword".
"On the one side they must not go through, on the other they must. There is always that dilemma if we will return or not to the drachma," he said.
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Re: New EC Thread
Panda Tue 6 Nov - 13:49
Greece — more austerity, less liberty
6 November 2012The Observer London
Graff
While the EU is keen to expose increasing authoritarianism in Viktor Orbán's Hungary, it tellingly turns a blind eye on the erosion of press freedom in Greece, the country on which it has foisted a raft of self-defeating austerity measures, argues a British columnist.
Nick Cohen
When those madcap Scandinavian satirists awarded the Nobel peace prize to the European Union, they let everyone in on the joke by praising its commitment to "reconciliation, democracy and human rights". If the committee's 2012 citation were anything other than a spoof, you would have read denunciations of the rise of oppressive state power and neo-Nazism in Greece from concerned Euro commissioners long before now.
The EU denounces threats to freedom of speech in Viktor Orbán's Hungary with vigour. European politicians worry with good reason about the fate of independent institutions that stand in the way of the rabble-rousing regime. They notice the fascistic element in the new Hungarian right's flirtations with antisemitic and anti-Roma hatreds and its willingness to indulge the revanchist fantasy that Hungary can regain the lands it lost after the First World War. On the fate of Greek democracy there is silence, however, although there is much that Europe's leaders might talk about.
You spot the pressure points of a failing state by looking at what it censors. In the case of Greece, the authorities' prosecution last week of Kostas Vaxevanis showed that he had hit a pressure point with the accuracy of a doctor sticking a needle into a nerve. While Greeks live with austerity without end, while Greek GDP has shrunk by 4.5% in 2010 and 6.9% in 2011, and will shrink by a predicted 6.5% this year and 4.5% in 2013, the list of the names of 2,000 Greeks with bank accounts in Switzerland Vaxevanis published, suggested that the well-connected were escaping the burdens that fall on the masses.
"Instead of arresting the tax evaders and the ministers who had the list in their hands," thundered Vaxevanis in a call to arms that stirred the blood, "they're trying to arrest the truth and freedom of the press."
His acquittal on privacy law charges, though welcome, was less important than it appeared. It did not mean that freedom of the press was secure in Greece. Even in good times, independent journalism has rarely been a force in the land. Most Greek TV stations and newspapers are owned by either the state or plutocratic corporations, neither of which likes seeing corruption exposed. The leftwing daily, Eleftherotypia, which for all its faults and flirtations with terrorism at least challenged the oligarchs, filed for bankruptcy last year.
6 November 2012The Observer London
Graff
While the EU is keen to expose increasing authoritarianism in Viktor Orbán's Hungary, it tellingly turns a blind eye on the erosion of press freedom in Greece, the country on which it has foisted a raft of self-defeating austerity measures, argues a British columnist.
Nick Cohen
When those madcap Scandinavian satirists awarded the Nobel peace prize to the European Union, they let everyone in on the joke by praising its commitment to "reconciliation, democracy and human rights". If the committee's 2012 citation were anything other than a spoof, you would have read denunciations of the rise of oppressive state power and neo-Nazism in Greece from concerned Euro commissioners long before now.
The EU denounces threats to freedom of speech in Viktor Orbán's Hungary with vigour. European politicians worry with good reason about the fate of independent institutions that stand in the way of the rabble-rousing regime. They notice the fascistic element in the new Hungarian right's flirtations with antisemitic and anti-Roma hatreds and its willingness to indulge the revanchist fantasy that Hungary can regain the lands it lost after the First World War. On the fate of Greek democracy there is silence, however, although there is much that Europe's leaders might talk about.
You spot the pressure points of a failing state by looking at what it censors. In the case of Greece, the authorities' prosecution last week of Kostas Vaxevanis showed that he had hit a pressure point with the accuracy of a doctor sticking a needle into a nerve. While Greeks live with austerity without end, while Greek GDP has shrunk by 4.5% in 2010 and 6.9% in 2011, and will shrink by a predicted 6.5% this year and 4.5% in 2013, the list of the names of 2,000 Greeks with bank accounts in Switzerland Vaxevanis published, suggested that the well-connected were escaping the burdens that fall on the masses.
"Instead of arresting the tax evaders and the ministers who had the list in their hands," thundered Vaxevanis in a call to arms that stirred the blood, "they're trying to arrest the truth and freedom of the press."
His acquittal on privacy law charges, though welcome, was less important than it appeared. It did not mean that freedom of the press was secure in Greece. Even in good times, independent journalism has rarely been a force in the land. Most Greek TV stations and newspapers are owned by either the state or plutocratic corporations, neither of which likes seeing corruption exposed. The leftwing daily, Eleftherotypia, which for all its faults and flirtations with terrorism at least challenged the oligarchs, filed for bankruptcy last year.
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Re: New EC Thread
fuzeta Tue 6 Nov - 21:33
Well 15% taken off a pension of 800 euro a month, then they are lucky. Gordon Brown managed to make private pensions here worth nothing.
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Panda Wed 7 Nov - 8:46
Eurozone combined output falls at fastest rate since 2009
The downturn in Europe deepened as the combined output in manufacturing and services fell at the sharpest pace since July 2009, according to official data.
The Markit eurozone PMI Composite Output Index fell to 45.7 in October, down from 46.1 in September and the earlier flash estimate of 45.8.
By Rebecca Clancy
9:37AM GMT 06 Nov 2012
Comment
The downturn spread to the core economies of the 17-nation bloc, with output falling at both manufacturers and service providers in all of the big-four economies.
Ireland, which was the second country to receive a bailout, recorded the only positive performance, where faster rates of expansion in manufacturing and services took combined growth to a 20-month peak.
The Markit eurozone PMI Composite Output Index fell to 45.7 in October, down from 46.1 in September and the earlier flash estimate of 45.8. Overall activity has now fallen for nine straight months.
Manufacturing production fell for the eighth month running, as companies experienced reduced inflows of new orders from domestic clients and lower intra- and extra-eurozone trade.
Meanwhile, service sector activity meanwhile fell at the sharpest pace since July 2009.
Related Articles
Steep contractions were signalled for Spain, France and Italy in October, although the rates of decline eased slightly in each of these nations compared with one month earlier.
The downturn in Germany was less severe overall, but nonetheless faster than that seen in September.
Sentiment is still being hit hard as companies worry about the dual aspect of weak domestic demand and a slowing global economy, Rob Dobson, senior economist at Markit said
“This is likely to hit growth in the coming months, especially at a time when cost-caution at manufacturers and service providers is filtering through to the wider economy through rising job losses, reduced purchasing and inventory depletion.
“The downturn is still widespread, with all of the big-four economies seeing output decline in October.
Signs that the contraction in Germany gathered pace are particularly disappointing, given the important role a strong performing Germany could play in stimulating growth elsewhere in the currency zone.
“Ireland was the only real brighter spot in October, with growth improving as it continues to make up lost ground.”
The downturn in Europe deepened as the combined output in manufacturing and services fell at the sharpest pace since July 2009, according to official data.
The Markit eurozone PMI Composite Output Index fell to 45.7 in October, down from 46.1 in September and the earlier flash estimate of 45.8.
By Rebecca Clancy
9:37AM GMT 06 Nov 2012
Comment The downturn spread to the core economies of the 17-nation bloc, with output falling at both manufacturers and service providers in all of the big-four economies.
Ireland, which was the second country to receive a bailout, recorded the only positive performance, where faster rates of expansion in manufacturing and services took combined growth to a 20-month peak.
The Markit eurozone PMI Composite Output Index fell to 45.7 in October, down from 46.1 in September and the earlier flash estimate of 45.8. Overall activity has now fallen for nine straight months.
Manufacturing production fell for the eighth month running, as companies experienced reduced inflows of new orders from domestic clients and lower intra- and extra-eurozone trade.
Meanwhile, service sector activity meanwhile fell at the sharpest pace since July 2009.
Related Articles
Slump in British industry dents recovery hopes
06 Nov 2012
Weak services data raises triple-dip risk
05 Nov 2012
Debt crisis: as it happened - November 2, 2012
01 Nov 2012
Services PMI show recovery lacks 'oomph'
03 Oct 2012
UK manufacturing declines for sixth month
01 Nov 2012
Sharp fall in British industrial output
06 Nov 2012
Steep contractions were signalled for Spain, France and Italy in October, although the rates of decline eased slightly in each of these nations compared with one month earlier.
The downturn in Germany was less severe overall, but nonetheless faster than that seen in September.
Sentiment is still being hit hard as companies worry about the dual aspect of weak domestic demand and a slowing global economy, Rob Dobson, senior economist at Markit said
“This is likely to hit growth in the coming months, especially at a time when cost-caution at manufacturers and service providers is filtering through to the wider economy through rising job losses, reduced purchasing and inventory depletion.
“The downturn is still widespread, with all of the big-four economies seeing output decline in October.
Signs that the contraction in Germany gathered pace are particularly disappointing, given the important role a strong performing Germany could play in stimulating growth elsewhere in the currency zone.
“Ireland was the only real brighter spot in October, with growth improving as it continues to make up lost ground.”
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Debt crisis: German economic data is a 'catastrophe', say economists
German factory orders recorded their biggest drop for a year according to figures that lead a raft of economic data from Spain, France and Italy, that underscored the advancing debt crisis.
Poor economic data from Germany as well as France, Spain and Italy has underscored the advancing debt crisis. Photo: Reuters
By Louise Armitstead, Chief Business Correspondent
6:58PM GMT 06 Nov 2012
20 Comments
The German finance ministry said factory orders were down 3.3pc in September from the month before shocking economists who had forecast a 0.4pc drop, according to Bloomberg poll.
Taken with figures showing German business confidence has fallen to the lowest in two-and-a-half years, the data was described as “a catastrophe and very bad news” by Thomas Harjes, European economist at Barclays in Frankfurt. “We have a huge problem in the rest of the euro area that now seems to be reaching Germany and its labour market,” he said. “For the coming quarters, the economic outlook is quite gloomy.”
Fresh data from Markit Economics showed that the eurozone’s combined output of the manufacturing and services sector fell at the fastest pace since June 2009. The composite PMI for the 17 member states fell to 45.7 in October, down from 46.1 in September. It was the nineth consecutive monthly fall.
Politicians continued to argue over the rescue mechanisms. Germany’s “wiseman” panel of economic advisers said the European Central Bank’s radical bond buying programme - the prospect of which has underpinned the markets since the summer - should only be used in an emergency and should not be relied upon as a permanent method for economic stabilisation.
Spain is braced for the European Commission to axe its forecast growth for the country after El Pais obtained a draft of the predictions. According to the Spanish newspaper, the EC, which is due to publish figures tomorrow has changed its forecast for 2013 GDP from 0.5pc to 1.5pc.
German factory orders recorded their biggest drop for a year according to figures that lead a raft of economic data from Spain, France and Italy, that underscored the advancing debt crisis.
Poor economic data from Germany as well as France, Spain and Italy has underscored the advancing debt crisis. Photo: Reuters
By Louise Armitstead, Chief Business Correspondent
6:58PM GMT 06 Nov 2012
20 Comments The German finance ministry said factory orders were down 3.3pc in September from the month before shocking economists who had forecast a 0.4pc drop, according to Bloomberg poll.
Taken with figures showing German business confidence has fallen to the lowest in two-and-a-half years, the data was described as “a catastrophe and very bad news” by Thomas Harjes, European economist at Barclays in Frankfurt. “We have a huge problem in the rest of the euro area that now seems to be reaching Germany and its labour market,” he said. “For the coming quarters, the economic outlook is quite gloomy.”
Fresh data from Markit Economics showed that the eurozone’s combined output of the manufacturing and services sector fell at the fastest pace since June 2009. The composite PMI for the 17 member states fell to 45.7 in October, down from 46.1 in September. It was the nineth consecutive monthly fall.
Politicians continued to argue over the rescue mechanisms. Germany’s “wiseman” panel of economic advisers said the European Central Bank’s radical bond buying programme - the prospect of which has underpinned the markets since the summer - should only be used in an emergency and should not be relied upon as a permanent method for economic stabilisation.
Spain is braced for the European Commission to axe its forecast growth for the country after El Pais obtained a draft of the predictions. According to the Spanish newspaper, the EC, which is due to publish figures tomorrow has changed its forecast for 2013 GDP from 0.5pc to 1.5pc.
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7 November 2012 Last updated at 11:57
Greece braces for key vote on fresh austerity measures
Greek Prime Minister Antonis Samaras says there will be "chaos" if the cuts are not approved
Continue reading the main story
Eurozone crisis
Greek Prime Minister Antonis Samaras has pleaded with politicians to vote through a fresh round of austerity measures crucial to securing the country's next round of bailout funds.
Parliament will vote later on 13.5bn euros ($17.3bn; £10.5bn) of measures, including tax rises and pension cuts.
Greek unions are planning to mass outside parliament in protest.
Mr Samaras said without the bailout aid, the country would run out of money by 15 November and face "catastrophe".
The fresh package of austerity measures - Greece's fourth in three years - is meant to close Greece's budget deficit, lower its huge debt burden and make its economy more competitive.
It includes a two-year increase in the retirement age from the current average of 65, as well as salary cuts and labour market reforms including cuts to holiday benefits, notice periods and severance pay.
Workers fear this will just make it easier and cheaper for them to be fired at a time when unemployment has already soared to 25% and a five-year recession means there are few job prospects.
The unions have staged what they described as the "mother of all strikes" - a 48-hour walkout which culminates on Wednesday evening with protests outside parliament in Athens.
Continue reading the main story
Measures in austerity package
The third major strike in just two months has brought public transport to a halt and shut schools, banks and government buildings.
Alexis Tsipras, leader of the left-wing opposition party Syriza, said: "The bailout policies are completely catastrophic, outrageously absurd, and an utter failure.
"Let's not kid ourselves. The bailouts can no longer be acceptable, not even under the toughest blackmail," he told the Efimerida Syntakton newspaper.
Tight vote
Wednesday's vote on the cuts will be followed by a second vote this Sunday on Greece's revised budget for 2013.
A positive vote on both is required for Greece to secure 31.5bn euros in fresh loans from the European Union (EU) and the International Monetary Fund (IMF).
Continue reading the main story
Key dates
Mr Samaras has said without this money, which will be used largely to recapitalise the country's banks, the country will be bankrupt by the middle of the month.
However, the Democratic Left Party, which is the junior member of the three-party governing coalition, is refusing to back the austerity package.
The second biggest coalition party, the socialist Pasok, is also facing a rebellion by some of its MPs.
Despite the opposition, analysts are optimistic the fresh cuts will be approved.
Mr Samaras is believed to have the support of about 154 votes in the 300-seat parliament, assuming there are no more defections
Greece braces for key vote on fresh austerity measures
Greek Prime Minister Antonis Samaras says there will be "chaos" if the cuts are not approved Continue reading the main story
Eurozone crisis
- Q&A: Greek debt crisis
- Will vote secure Greece's future?
- What if Greece quits the euro?
- Are all summits a waste of time?
Greek Prime Minister Antonis Samaras has pleaded with politicians to vote through a fresh round of austerity measures crucial to securing the country's next round of bailout funds.
Parliament will vote later on 13.5bn euros ($17.3bn; £10.5bn) of measures, including tax rises and pension cuts.
Greek unions are planning to mass outside parliament in protest.
Mr Samaras said without the bailout aid, the country would run out of money by 15 November and face "catastrophe".
The fresh package of austerity measures - Greece's fourth in three years - is meant to close Greece's budget deficit, lower its huge debt burden and make its economy more competitive.
It includes a two-year increase in the retirement age from the current average of 65, as well as salary cuts and labour market reforms including cuts to holiday benefits, notice periods and severance pay.
Workers fear this will just make it easier and cheaper for them to be fired at a time when unemployment has already soared to 25% and a five-year recession means there are few job prospects.
The unions have staged what they described as the "mother of all strikes" - a 48-hour walkout which culminates on Wednesday evening with protests outside parliament in Athens.
Continue reading the main story
Measures in austerity package
- Retirement age up from 65 to 67
- A further round of pension cuts, of 5-15%
- Salary cuts, notably for police officers, soldiers, firefighters, professors, judges, justice officials; minimum wage also reduced
- Holiday benefits cut
- 35% cut to severance pay
- Redundancy notice reduced from six to four months
The third major strike in just two months has brought public transport to a halt and shut schools, banks and government buildings.
Alexis Tsipras, leader of the left-wing opposition party Syriza, said: "The bailout policies are completely catastrophic, outrageously absurd, and an utter failure.
"Let's not kid ourselves. The bailouts can no longer be acceptable, not even under the toughest blackmail," he told the Efimerida Syntakton newspaper.
Tight vote
Wednesday's vote on the cuts will be followed by a second vote this Sunday on Greece's revised budget for 2013.
A positive vote on both is required for Greece to secure 31.5bn euros in fresh loans from the European Union (EU) and the International Monetary Fund (IMF).
Continue reading the main story
Key dates
- 6-7 Nov General strike
- 7 Nov Vote on austerity package
- 11 Nov Vote on budget
- 12 Nov Eurozone finance ministers to discuss releasing new cash for Greece
- 16 Nov Deadline for Greece to repay 5bn euros in debt
Mr Samaras has said without this money, which will be used largely to recapitalise the country's banks, the country will be bankrupt by the middle of the month.
However, the Democratic Left Party, which is the junior member of the three-party governing coalition, is refusing to back the austerity package.
The second biggest coalition party, the socialist Pasok, is also facing a rebellion by some of its MPs.
Despite the opposition, analysts are optimistic the fresh cuts will be approved.
Mr Samaras is believed to have the support of about 154 votes in the 300-seat parliament, assuming there are no more defections
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debt crisis latest
Debt crisis: Cameron attacks 'ludicrous' EU budget
Britain is set to miss its debt target if it continues on its current trajectory, according to a report by the European Commission, which added that the outlook for growth in the UK remains "very weak" in the short term.
07 Nov 2012
| 466 Comments
Debt crisis: as it happenend - November 6, 2012
French Prime Minister Jean-Marc Ayrault has has unveiled €20bn (£16bn) worth of tax breaks, which will allow companies to cut labour costs, in a bid to restore the competitiveness of the country's declining industry.
06 Nov 2012
| 389 Comments
Debt crisis: as it happened - November 5, 2012
European markets have fallen ahead of the US presidential election and Greece's make-or-break parliamentary vote, which is needed to allow the country to receive the next tranche of its bailout and avoid defaulting.
05 Nov 2012
| 515 Comments
Debt crisis: as it happened - November 2, 2012
Pimco's managing director Andrew Bosomworth has said Greece is insolvent and it's going to default. It's just a question of how and when that is realized.
01 Nov 2012
| 259 Comments
Debt crisis: as it happened - November 1, 2012
Angela Merkel and Ireland's Taoiseach Enda Kenny met in Berlin today where Merkel said Ireland was an "excellent example" of reforms and said the country's respective finance ministers were working on specific Irish problems.
01 Nov 2012
| 260 Comments
Debt crisis: as it happened - 31 October, 2012
Conservative MPs have rebelled against Prime Minister David Cameron and voted to back demands for a reduction in EU spending.
31 Oct 2012
| 965 Comments
Debt crisis: as it happened - October 30, 2012
Spain's economy shrank for a fifth straight quarter in July to September, undermining efforts to plug the budget deficit that is pushing the nation closer to a bailout.
30 Oct 2012
| 346 Comments
Debt crisis: as it happened - 29 October, 2012
Mario Monti and Mariano Rajoy were both cool on German plans to allow the EU to intervene in countries' budgets and propose changes before they are agreed in parliaments.
29 Oct 2012
| 294 Comments
Debt crisis: as it happened, October 26
Ireland must negotiate "new conditions" with its international lenders if it is to use the eurozone's permanent bail-out fund to recapitalise its battered banks, Angela Merkel's spokesman has said.
26 Oct 2012
| 316 Comments
Debt crisis: as it happened - 25 October, 2012
The IMF has urged Europe to follow through on its pledge to ease Ireland's debt burden by directly recapitilising its banks, which could cut the country's debt by up to 15pc.
25 Oct 2012
| 216 Comments
Debt crisis: as it happened - October 24, 2012
ECB President Mario Draghi has defended his bond-buying plan to ease the eurozone's debt crisis, telling German lawmakers that bond purchases won’t fuel inflation, jeopardize the bank’s independence or put taxpayer money at risk.
24 Oct 2012
| 449 Comments
Debt crisis: as it happened - October 23, 2012
Pressure on Rajoy to seek bail-out after Spain's economy contracts further and Moody's downgrades five regions citing worries over reliance on short-term credit lines to fund day-to-day operations.
23 Oct 2012
| 314 Comments
Debt crisis: as it happened - October 22
The eurozone and European Union's debt hit a high in 2011, according to Eurostat, but the deficit has decreased. However 17 members of the EU had public deficits higher than the 3pc permitted by EU law.
22 Oct 2012
| 368 Comments
Debt crisis: Cameron attacks 'ludicrous' EU budget
Britain is set to miss its debt target if it continues on its current trajectory, according to a report by the European Commission, which added that the outlook for growth in the UK remains "very weak" in the short term.
07 Nov 2012
| 466 Comments
Debt crisis: as it happenend - November 6, 2012
French Prime Minister Jean-Marc Ayrault has has unveiled €20bn (£16bn) worth of tax breaks, which will allow companies to cut labour costs, in a bid to restore the competitiveness of the country's declining industry.
06 Nov 2012
| 389 Comments
Debt crisis: as it happened - November 5, 2012
European markets have fallen ahead of the US presidential election and Greece's make-or-break parliamentary vote, which is needed to allow the country to receive the next tranche of its bailout and avoid defaulting.
05 Nov 2012
| 515 Comments
Debt crisis: as it happened - November 2, 2012
Pimco's managing director Andrew Bosomworth has said Greece is insolvent and it's going to default. It's just a question of how and when that is realized.
01 Nov 2012
| 259 Comments
Debt crisis: as it happened - November 1, 2012
Angela Merkel and Ireland's Taoiseach Enda Kenny met in Berlin today where Merkel said Ireland was an "excellent example" of reforms and said the country's respective finance ministers were working on specific Irish problems.
01 Nov 2012
| 260 Comments
Debt crisis: as it happened - 31 October, 2012
Conservative MPs have rebelled against Prime Minister David Cameron and voted to back demands for a reduction in EU spending.
31 Oct 2012
| 965 Comments
Debt crisis: as it happened - October 30, 2012
Spain's economy shrank for a fifth straight quarter in July to September, undermining efforts to plug the budget deficit that is pushing the nation closer to a bailout.
30 Oct 2012
| 346 Comments
Debt crisis: as it happened - 29 October, 2012
Mario Monti and Mariano Rajoy were both cool on German plans to allow the EU to intervene in countries' budgets and propose changes before they are agreed in parliaments.
29 Oct 2012
| 294 Comments
Debt crisis: as it happened, October 26
Ireland must negotiate "new conditions" with its international lenders if it is to use the eurozone's permanent bail-out fund to recapitalise its battered banks, Angela Merkel's spokesman has said.
26 Oct 2012
| 316 Comments
Debt crisis: as it happened - 25 October, 2012
The IMF has urged Europe to follow through on its pledge to ease Ireland's debt burden by directly recapitilising its banks, which could cut the country's debt by up to 15pc.
25 Oct 2012
| 216 Comments
Debt crisis: as it happened - October 24, 2012
ECB President Mario Draghi has defended his bond-buying plan to ease the eurozone's debt crisis, telling German lawmakers that bond purchases won’t fuel inflation, jeopardize the bank’s independence or put taxpayer money at risk.
24 Oct 2012
| 449 Comments
Debt crisis: as it happened - October 23, 2012
Pressure on Rajoy to seek bail-out after Spain's economy contracts further and Moody's downgrades five regions citing worries over reliance on short-term credit lines to fund day-to-day operations.
23 Oct 2012
| 314 Comments
Debt crisis: as it happened - October 22
The eurozone and European Union's debt hit a high in 2011, according to Eurostat, but the deficit has decreased. However 17 members of the EU had public deficits higher than the 3pc permitted by EU law.
22 Oct 2012
| 368 Comments
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Nov 7, 11:44 AM EST EU: Eurozone recession to be worse, rebound slower By SARAH DiLORENZO AP Business Writer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BRUSSELS (AP) -- Europe's economy is still reeling and unemployment could remain high for years despite the progress made in solving the debt crisis, the European Union warned Wednesday, as it downgraded next year's forecasts for the 27-country bloc. The European Commission, the executive arm of the EU, on Wednesday revised down its forecast for the region's gross domestic product, which it now expects to grow by just 0.4 percent in 2013, compared to its expectations this spring of 1.3 percent growth. The commission had previously expected the 17 countries that use the euro to find its footing next year, with 1 percent growth. Now it predicts only a 0.1 percent uptick. The report also suggests that unemployment won't start falling until 2014 - and then only slightly. "Europe is going through a difficult process of macroeconomic rebalancing and adjustment, which will last for some time still," Olli Rehn, the EU's economic and monetary affairs commissioner, told reporters. "Market stress has been reduced but there is certainly no room for complacency." The downbeat forecast helped erase an initial euphoria in markets over President Barack Obama's re-election, with France's CAC-40 stock index and the DAX in Germany both down 1.5 percent in afternoon trading Wednesday. The eurozone has made progress this year toward resolving its debt crisis, which has been dragging down economies throughout the EU and beyond. Countries that use the euro have slashed spending and promised to keep their deficits in check; they've vowed to better protect their banks by improving how they're regulated and supervised; and the European Central Bank has put in place a plan to help countries struggling with high borrowing costs, the hallmark of the crisis and the reason some have sought bailouts. But those measures have not yet been felt in the real economy. The unemployment rate across the eurozone is at a record high of 11.6 percent, and it is 10.6 percent in the wider EU. In the latest in a steady stream of job cuts, Danish wind turbine maker Vestas, Swedish wireless equipment group LM Ericsson, and Dutch bank ING announced a total of almost 7,000 layoffs Wednesday. Eurostat, the EU's statistics agency, also said retail sales in the eurozone shrank 0.2 percent in September. This commission's predictions for this year reflect that grim reality. It expects the EU's economy to contract by 0.3 percent, rather than remaining flat as it forecast in the spring. It also predicts that the eurozone GDP will fall 0.4 percent, against a previous expectation of a 0.3 percent drop. Official third-quarter GDP figures - which will show whether the eurozone has entered recession as economists suspect it has - are due to be released on Nov. 15. A recession is defined as two quarters in a row with negative growth. Many economists have argued that, in solving one crisis by cutting government spending and raising taxes, politicians have exacerbated another - slow or negative growth. Meanwhile, tighter banking rules have hurt lending, the fuel economies need to grow. The commission's report also confirms that the crisis is not sparing even Germany, Europe's largest economy and the traditional motor for growth. It predicted that Germany would eke out just 0.8 percent growth in 2012, compared with its earlier forecast of 1.7 percent. ECB President Mario Draghi warned Wednesday that "the latest data suggest that these developments are now starting to affect" the German economy. In a speech given in Frankfurt, Draghi called on governments to back up the ECB's plans to help countries with their borrowing costs by cutting debt and improving growth through cutting excessive red tape. "Across the whole euro area, governments are making determined efforts to reverse economic imbalances," he said. "They are implementing reforms to redress the misguided policies of the past and to create sustainable long-term growth. It is a difficult road and there is still a long way to go. But the early signs are encouraging." "Financial developments in Germany are the mirror-image of financial developments in the rest of the euro area," Draghi added. "And this means that measures to ensure the stability of the euro area as a whole will also be to the benefit of Germany." Greece has suffered the most from the vicious slow growth cycle and is now in its fifth year of recession. Many say it's unclear how the country will ever manage to reduce its debts, spark growth and break the cycle. The new forecast expects Greece's economy to contract 6 percent this year and another 4.2 percent next year. In the spring, the commission had hoped growth would be flat in 2013. Because low or negative growth reduces the amount of money governments receive in taxes, stagnation also threatens to throw countries off their deficit targets. According to the report, both Greece and Spain won't meet their goal of reducing their deficits to 3 percent by 2014. It predicts Greece's will be 4.5 percent at that point and Spain's 6.4 percent. In Greece's case, that could mean jeopardizing the rescue loans it is using to fund itself. Greece has asked its international creditors for more time to reach its goal. Rehn said Wednesday that the country's debt levels look increasingly unsustainable and that something must be done, but he stopped short of saying what. --- David McHugh in Frankfurt contributed to this report. |
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Blogs Home » Finance » Economics » Ambrose Evans-Pritchard
Ambrose Evans-Pritchard
Ambrose Evans-Pritchard has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels. He is now International Business Editor in London. Subscribe to the City Briefing e-mail.
Who will stop the Sado-Monetarists as jobless youth hits 58pc in Greece?
By Ambrose Evans-PritchardEconomicsLast updated: November 8th, 2012
117 CommentsComment on this article
Greek unemployment rose to 25.4pc in August. Youth unemployment rose to 58pc.
Under the official forecast, the economy will contract by a further 4.5pc next year, so it fair to assume that lots more people are going to lose their jobs. It is certainly not going to improve in any meaningful way for years to come.
This is what happens when you lock into the wrong currency and block the escape routes – or join a "burning building with no exits" in the words of William Hague.
Even if Greeks comply with all demands, public debt will reach 179pc of GDP next year. Perhaps there will be some sort of formula to cut debt service costs by shaving 50 basis points off interest on rescue loans, and persuading the ECB to forgo "profits" on its estimated €40 billion holdings of Greek bonds (though unrealised profits would seem be courting fate).
Yet it is hard to see how the salary and pension cuts, etc, pushed through the Greek parliament last night with enormous difficulty can do any more than buy a few months’ delay. The protests on Wednesday bordered on urban guerrilla warfare. It will not take much to cross that line.
Even if the EMU machine succeeds in keeping Greece in the system, is this any longer a remotely desirable goal? Has it not become a vicious and immoral policy in itself?
I agree with the IFO Institute’s Hans-Werner Sinn that upholding euro membership has by now become an act of cruelty. It not being done in the interests of Greeks. It is being done for the Project, by enforcers of the Project. Only by breaking free can Greece restore a minimum of economic vibrancy and national dignity.
Everything we know from labour studies is that the early twenties are crucial years, shaping lifelong career paths and earnings ten to fifteen years beyond. The worst economic crime you cannot commit is to leave 58pc of youth grinding away their days in frustration in cafés, if they can afford the coffee.
Premier Antonis Samaras issued hysterical warnings before the vote of what would happen if parliament refused to obey the EU-IMF Troika, talking of catastrophe and a collapse of Greek society.
He has little credibility. His party was chiefly responsible for the grotesque mismanagement of Greece in the early EMU years. There is no necessary reason why Greece should spiral into collapse outside EMU, or why the Drachma would plummet to Third World levels.
This would happen only if the EU decided to make that happen. Why would the EU behave in such a fashion? It would have every reason to try to salvage what it could from the fiasco and demonstrate that EU solidarity is still worth something.
Technically, the ECB could be instructed to defend a euro-drachma rate – let us say a 30pc devaluation – until the dust had settled.
The EIB and Commission could intervene with all kinds of investment and trade support to cushion the blow. An orderly transition is not beyond the wit of man. It would restore the basic competitiveness of the Greek economy at a stroke.
We all know the reason why this is not being done. The ideologues running monetary union cannot bring themselves to contemplate any step back in the Project, just as they would not admit yesterday in the Commission’s economic report that they have gravely misjudged the effects of fiscal tightening (the fiscal multiplier) and have therefore miscrafted their entire austerity strategy.
We are not dealing with rational people. We are dealing with a religious order, and these monks are becoming an increasing danger to Europe’s societies and democracies.
Margaret Thatcher’s advisers were tagged Sado-Monetarists in the early 1980s but they never inflicted anything remotely close to this level of suffering. The strange silence of the Left on this is baffling. Sooner or later my Fabian friends will have make up their minds whether they are for the workers, or for the "bankers ramp" — as old Socialists like Peter Shore used to describe monetary union.
The Draghi Put has lifted the immediate financial threat, but this makes matters worse. The drip-drip of ugly economic data continues each day. The deeper structural crisis is still getting worse. Loan demand has crashed 50pc in Italy and France. Spain’s unemployment is 25.8pc and may reach 30pc next year.
Yet there is no longer any immediate catalyst or external umpire in the markets that can bring this mass civic abuse to an end. Unless the Bundestag comes to the rescue by refusing to pay for any more can-kicking, we may have to wait until internal devaluations in the Club Med bloc push jobless rates to such excruciating levels that the political system snaps.
It is the worst of all Worlds
Ambrose Evans-Pritchard
Ambrose Evans-Pritchard has covered world politics and economics for 30 years, based in Europe, the US, and Latin America. He joined the Telegraph in 1991, serving as Washington correspondent and later Europe correspondent in Brussels. He is now International Business Editor in London. Subscribe to the City Briefing e-mail.
Who will stop the Sado-Monetarists as jobless youth hits 58pc in Greece?
By Ambrose Evans-PritchardEconomicsLast updated: November 8th, 2012
117 CommentsComment on this article
Greek unemployment rose to 25.4pc in August. Youth unemployment rose to 58pc.
Under the official forecast, the economy will contract by a further 4.5pc next year, so it fair to assume that lots more people are going to lose their jobs. It is certainly not going to improve in any meaningful way for years to come.
This is what happens when you lock into the wrong currency and block the escape routes – or join a "burning building with no exits" in the words of William Hague.
Even if Greeks comply with all demands, public debt will reach 179pc of GDP next year. Perhaps there will be some sort of formula to cut debt service costs by shaving 50 basis points off interest on rescue loans, and persuading the ECB to forgo "profits" on its estimated €40 billion holdings of Greek bonds (though unrealised profits would seem be courting fate).
Yet it is hard to see how the salary and pension cuts, etc, pushed through the Greek parliament last night with enormous difficulty can do any more than buy a few months’ delay. The protests on Wednesday bordered on urban guerrilla warfare. It will not take much to cross that line.
Even if the EMU machine succeeds in keeping Greece in the system, is this any longer a remotely desirable goal? Has it not become a vicious and immoral policy in itself?
I agree with the IFO Institute’s Hans-Werner Sinn that upholding euro membership has by now become an act of cruelty. It not being done in the interests of Greeks. It is being done for the Project, by enforcers of the Project. Only by breaking free can Greece restore a minimum of economic vibrancy and national dignity.
Everything we know from labour studies is that the early twenties are crucial years, shaping lifelong career paths and earnings ten to fifteen years beyond. The worst economic crime you cannot commit is to leave 58pc of youth grinding away their days in frustration in cafés, if they can afford the coffee.
Premier Antonis Samaras issued hysterical warnings before the vote of what would happen if parliament refused to obey the EU-IMF Troika, talking of catastrophe and a collapse of Greek society.
He has little credibility. His party was chiefly responsible for the grotesque mismanagement of Greece in the early EMU years. There is no necessary reason why Greece should spiral into collapse outside EMU, or why the Drachma would plummet to Third World levels.
This would happen only if the EU decided to make that happen. Why would the EU behave in such a fashion? It would have every reason to try to salvage what it could from the fiasco and demonstrate that EU solidarity is still worth something.
Technically, the ECB could be instructed to defend a euro-drachma rate – let us say a 30pc devaluation – until the dust had settled.
The EIB and Commission could intervene with all kinds of investment and trade support to cushion the blow. An orderly transition is not beyond the wit of man. It would restore the basic competitiveness of the Greek economy at a stroke.
We all know the reason why this is not being done. The ideologues running monetary union cannot bring themselves to contemplate any step back in the Project, just as they would not admit yesterday in the Commission’s economic report that they have gravely misjudged the effects of fiscal tightening (the fiscal multiplier) and have therefore miscrafted their entire austerity strategy.
We are not dealing with rational people. We are dealing with a religious order, and these monks are becoming an increasing danger to Europe’s societies and democracies.
Margaret Thatcher’s advisers were tagged Sado-Monetarists in the early 1980s but they never inflicted anything remotely close to this level of suffering. The strange silence of the Left on this is baffling. Sooner or later my Fabian friends will have make up their minds whether they are for the workers, or for the "bankers ramp" — as old Socialists like Peter Shore used to describe monetary union.
The Draghi Put has lifted the immediate financial threat, but this makes matters worse. The drip-drip of ugly economic data continues each day. The deeper structural crisis is still getting worse. Loan demand has crashed 50pc in Italy and France. Spain’s unemployment is 25.8pc and may reach 30pc next year.
Yet there is no longer any immediate catalyst or external umpire in the markets that can bring this mass civic abuse to an end. Unless the Bundestag comes to the rescue by refusing to pay for any more can-kicking, we may have to wait until internal devaluations in the Club Med bloc push jobless rates to such excruciating levels that the political system snaps.
It is the worst of all Worlds
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ECB Stands Ready to Buy Bonds as Economy Weakens
By Jeff Black and Jana Randow - Nov 8, 2012 4:27 PM GMT
European Central Bank President Mario Draghi said the economic outlook is worsening and the bank stands ready to activate its bond-purchase program if governments fulfil the necessary conditions.
“We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said at a press conference in Frankfurt today after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said.
Enlarge image
ECB President Mario Draghi
Ralph Orlowski/Bloomberg
European Central Bank President Mario Draghi speaks during a news conference at the bank's headquarters in Frankfurt.
European Central Bank President Mario Draghi speaks during a news conference at the bank's headquarters in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
7:08
Nov. 8 (Bloomberg) -- European Central Bank President Mario Draghi talks about monetary policy, inflation expectations and the ECB's bond-purchase program. Draghi, speaking in Frankfurt at his monthly news conference, also discusses the outlook for the euro-area economy. (Excerpts. Source: Bloomberg)
10:56
Nov. 8 (Bloomberg) - European Central Bank President Mario Draghi speaks at a news conference in Frankfurt about the ECB's decision to keep the benchmark interest rate at its historic low of 0.75 percent. (This is Draghi's statement only. Source: Europe by Satellite)
Draghi indicated the ECB is likely to lower its economic forecasts next month as the sovereign debt crisis curbs growth in Germany, the region’s largest economy. He stopped short of signalling a further rate cut, saying the ECB’s monetary policy is already “very accommodative” and the announcement of its bond program has led to “a series of improvements” on financial markets.
Still, “the chances are high that the ECB will need to come up with additional measures to support the euro-zone economy,” said Carsten Brzeski, an economist at ING Group in Brussels. “A rate cut, even if it will not come next month, could be part of the measures.”
Policy Transmission
While bond yields have fallen in Spain and Italy since the ECB unveiled its OMT program, investors are still waiting for Spain to request aid from Europe’s bailout fund, a pre-requisite for the ECB to actually intervene in debt markets.
Spanish Prime Minister Mariano Rajoy said on Nov. 6 he needs to know how much the ECB would push down Spain’s borrowing costs before his government applies for aid and signs up to the conditions attached.
“It’s entirely up to Spain and the Spanish government to take the decision,” Draghi said. “The ECB can’t give any assurances ex ante. The Governing Council will take the decision in total independence. There isn’t any automatic quid pro quo.”
Spanish 10-year bonds fell for a second day as Draghi spoke, pushing the yield up to 5.85 percent. The euro weakened before recovering to trade little changed at $1.2736 at 5:10 p.m. in Frankfurt.
Euro-Area Recession
Economic confidence in the 17-member euro area dropped to a three-year low in October, adding to signs that the region is in recession after gross domestic product fell 0.2 percent in the second quarter. Third-quarter GDP is due on Nov. 15.
In Germany, Europe’s largest economy, reports this week suggested growth is grinding to a halt. Exports, factory orders and industrial production all fell more than forecast in September. Last month, business confidence dropped to a 2 1/2 year low.
The European Commission yesterday lowered its 2013 growth forecast for Germany to 0.8 percent from 1.7 percent and said the euro-area economy will expand just 0.1 percent after contracting 0.4 percent this year.
Draghi said the ECB will take the weaker outlook into account when it publishes new economic and inflation forecasts next month.
“Certainly the outlook is being revised and there’s a picture of a weaker economy,” he said. “The Governing Council decided to keep interest rates unchanged. We have not discussed what we’re going to do next year in terms of monetary policy.”
‘Broadly Balanced’
Asked why the ECB didn’t cut rates today given the outlook, Draghi said policy makers currently consider risks for price stability to be “broadly balanced.” The bank has done a lot to support the economy, he said. Still, “we also stand ready with our normal monetary policy instruments” should further accommodation be needed.
“We have pencilled in an interest-rate cut in December,” said Howard Archer, chief European economist at IHS Global Insight in London. “However, it is very possible that the ECB could delay trimming interest rates until early 2013 due to concerns that the impact of a near-term cut could be diluted by the problems in monetary policy transmission channels.”
Draghi sought to end a debate on whether the central bank will do more to ease the debt burden of Greece, where Prime Minister Antonis Samaras yesterday gathered the support of enough lawmakers to pass austerity measures needed to unlock the next tranche of European funds.
The ECB can’t take losses on the Greek bonds it holds and has already distributed any profits made on them to governments, Draghi said.
“It’s up to the governments to decide whether they want to use these profits for Greece,” he said. “The governments actually committed themselves to do so. So, the ECB is by and large done.”
By Jeff Black and Jana Randow - Nov 8, 2012 4:27 PM GMT
European Central Bank President Mario Draghi said the economic outlook is worsening and the bank stands ready to activate its bond-purchase program if governments fulfil the necessary conditions.
“We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” Draghi said at a press conference in Frankfurt today after policy makers left the benchmark interest rate at a historic low of 0.75 percent. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate,” he said.
Enlarge image
ECB President Mario Draghi
Ralph Orlowski/Bloomberg
European Central Bank President Mario Draghi speaks during a news conference at the bank's headquarters in Frankfurt.
European Central Bank President Mario Draghi speaks during a news conference at the bank's headquarters in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
7:08
Nov. 8 (Bloomberg) -- European Central Bank President Mario Draghi talks about monetary policy, inflation expectations and the ECB's bond-purchase program. Draghi, speaking in Frankfurt at his monthly news conference, also discusses the outlook for the euro-area economy. (Excerpts. Source: Bloomberg)
10:56
Nov. 8 (Bloomberg) - European Central Bank President Mario Draghi speaks at a news conference in Frankfurt about the ECB's decision to keep the benchmark interest rate at its historic low of 0.75 percent. (This is Draghi's statement only. Source: Europe by Satellite)
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Draghi indicated the ECB is likely to lower its economic forecasts next month as the sovereign debt crisis curbs growth in Germany, the region’s largest economy. He stopped short of signalling a further rate cut, saying the ECB’s monetary policy is already “very accommodative” and the announcement of its bond program has led to “a series of improvements” on financial markets.
Still, “the chances are high that the ECB will need to come up with additional measures to support the euro-zone economy,” said Carsten Brzeski, an economist at ING Group in Brussels. “A rate cut, even if it will not come next month, could be part of the measures.”
Policy Transmission
While bond yields have fallen in Spain and Italy since the ECB unveiled its OMT program, investors are still waiting for Spain to request aid from Europe’s bailout fund, a pre-requisite for the ECB to actually intervene in debt markets.
Spanish Prime Minister Mariano Rajoy said on Nov. 6 he needs to know how much the ECB would push down Spain’s borrowing costs before his government applies for aid and signs up to the conditions attached.
“It’s entirely up to Spain and the Spanish government to take the decision,” Draghi said. “The ECB can’t give any assurances ex ante. The Governing Council will take the decision in total independence. There isn’t any automatic quid pro quo.”
Spanish 10-year bonds fell for a second day as Draghi spoke, pushing the yield up to 5.85 percent. The euro weakened before recovering to trade little changed at $1.2736 at 5:10 p.m. in Frankfurt.
Euro-Area Recession
Economic confidence in the 17-member euro area dropped to a three-year low in October, adding to signs that the region is in recession after gross domestic product fell 0.2 percent in the second quarter. Third-quarter GDP is due on Nov. 15.
In Germany, Europe’s largest economy, reports this week suggested growth is grinding to a halt. Exports, factory orders and industrial production all fell more than forecast in September. Last month, business confidence dropped to a 2 1/2 year low.
The European Commission yesterday lowered its 2013 growth forecast for Germany to 0.8 percent from 1.7 percent and said the euro-area economy will expand just 0.1 percent after contracting 0.4 percent this year.
Draghi said the ECB will take the weaker outlook into account when it publishes new economic and inflation forecasts next month.
“Certainly the outlook is being revised and there’s a picture of a weaker economy,” he said. “The Governing Council decided to keep interest rates unchanged. We have not discussed what we’re going to do next year in terms of monetary policy.”
‘Broadly Balanced’
Asked why the ECB didn’t cut rates today given the outlook, Draghi said policy makers currently consider risks for price stability to be “broadly balanced.” The bank has done a lot to support the economy, he said. Still, “we also stand ready with our normal monetary policy instruments” should further accommodation be needed.
“We have pencilled in an interest-rate cut in December,” said Howard Archer, chief European economist at IHS Global Insight in London. “However, it is very possible that the ECB could delay trimming interest rates until early 2013 due to concerns that the impact of a near-term cut could be diluted by the problems in monetary policy transmission channels.”
Draghi sought to end a debate on whether the central bank will do more to ease the debt burden of Greece, where Prime Minister Antonis Samaras yesterday gathered the support of enough lawmakers to pass austerity measures needed to unlock the next tranche of European funds.
The ECB can’t take losses on the Greek bonds it holds and has already distributed any profits made on them to governments, Draghi said.
“It’s up to the governments to decide whether they want to use these profits for Greece,” he said. “The governments actually committed themselves to do so. So, the ECB is by and large done.”
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Re: New EC Thread
Panda Thu 8 Nov - 17:29
Greek Aid Payment Call Won’t Be Made Next Week, EU Official Says
By Craig Stirling - Nov 8, 2012 3:41 PM GMT
Euro-area finance ministers may not make a decision on unlocking funds for Greece until late November as they await a full report on the country’s compliance with the terms of its bailout, a European Union official said.
Finance chiefs won’t make the call to release 31.5 billion euros ($40.1 billion) of aid for Greece that has been frozen since June when they meet in Brussels on Nov. 12, the official said today on condition of anonymity because the deliberations are private.
Enlarge image
Greek Aid Payment Call Won’t Be Made Next Week, EU Official Says
Kostas Tsironis/Bloomberg
Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy.
Ministers will await a final report from the so-called troika that oversees euro-area bailouts on Greece’s efforts to meet the conditions of its second bailout since 2010 before taking action, the official said. That report isn’t finished yet, the official said, and while a preliminary version may be available for the Nov. 12 meeting, that won’t be enough for ministers to base their decision on.
Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy. While German Chancellor Angela Merkel last month traveled to Athens to signal her willingness to keep the Greece in the euro, the country is still struggling to reach its debt-reduction targets amid a combination of Greek political resistance to more cuts and economic collapse that has brought record unemployment.
“We’re not out of the woods yet,” German Finance MinisterWolfgang Schaeuble said in Hamburg today. “At the moment, I don’t see how we can take the decision already next week.”
General Strike
The EU official said Nov. 26 is a possible date for euro-area finance ministers to sign off on the next disbursement of rescue aid to Greece.
A Greek government spokesman declined to comment when asked if a decision on the aid payment would be made at the Nov. 12 meeting.
Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of a bill on pension, wage and benefit cuts needed for bailout funds to flow. The vote occurred on the second day of a 48-hour general strike which shut down hospitals, schools and government services and brought public transport to a standstill. Apparent changes in privatization laws will need to be evaluated, the official said.
The parliament will convene again on Nov. 11 to vote on the 2013 budget. European Commission spokesman Simon O’Connor said today that the vote will be another “crucial” step toward freeing up rescue funds.
Policy Decisions
The Greek government is working “in a good and constructive spirit” with the troika, comprising the commission, the European Central Bank and the International Monetary Fund.
“We certainly hope and expect that we will be able to conclude this work in the coming days and to work toward what we hope will be policy decisions on Monday at the eurogroup,”O’Connor said.
Greece has received 240 billion euros in aid pledges from the EU and the International Monetary Fund since 2010.
========================
It's like drip, drip,drip, .......this because Germany Spain France and Italy , Switzerland , in fact all the EU countries, like the rest of the world is in recession so if the bail-out is given the Troika knows Greece will not be able to meet the austerity requirements. The Troika said in June that Greece was meeting the target , but now , with the worsening economies around the World and civil unrest in Greece and Spain it may prove less painful if Greece leaves the Euro.
By Craig Stirling - Nov 8, 2012 3:41 PM GMT
Euro-area finance ministers may not make a decision on unlocking funds for Greece until late November as they await a full report on the country’s compliance with the terms of its bailout, a European Union official said.
Finance chiefs won’t make the call to release 31.5 billion euros ($40.1 billion) of aid for Greece that has been frozen since June when they meet in Brussels on Nov. 12, the official said today on condition of anonymity because the deliberations are private.
Enlarge image
Greek Aid Payment Call Won’t Be Made Next Week, EU Official Says
Kostas Tsironis/Bloomberg
Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy.
Ministers will await a final report from the so-called troika that oversees euro-area bailouts on Greece’s efforts to meet the conditions of its second bailout since 2010 before taking action, the official said. That report isn’t finished yet, the official said, and while a preliminary version may be available for the Nov. 12 meeting, that won’t be enough for ministers to base their decision on.
Greece is under pressure to make more efforts to rein in its budget deficit and deregulate the economy. While German Chancellor Angela Merkel last month traveled to Athens to signal her willingness to keep the Greece in the euro, the country is still struggling to reach its debt-reduction targets amid a combination of Greek political resistance to more cuts and economic collapse that has brought record unemployment.
“We’re not out of the woods yet,” German Finance MinisterWolfgang Schaeuble said in Hamburg today. “At the moment, I don’t see how we can take the decision already next week.”
General Strike
The EU official said Nov. 26 is a possible date for euro-area finance ministers to sign off on the next disbursement of rescue aid to Greece.
A Greek government spokesman declined to comment when asked if a decision on the aid payment would be made at the Nov. 12 meeting.
Greek Prime Minister Antonis Samaras mustered the support of enough lawmakers to secure approval of a bill on pension, wage and benefit cuts needed for bailout funds to flow. The vote occurred on the second day of a 48-hour general strike which shut down hospitals, schools and government services and brought public transport to a standstill. Apparent changes in privatization laws will need to be evaluated, the official said.
The parliament will convene again on Nov. 11 to vote on the 2013 budget. European Commission spokesman Simon O’Connor said today that the vote will be another “crucial” step toward freeing up rescue funds.
Policy Decisions
The Greek government is working “in a good and constructive spirit” with the troika, comprising the commission, the European Central Bank and the International Monetary Fund.
“We certainly hope and expect that we will be able to conclude this work in the coming days and to work toward what we hope will be policy decisions on Monday at the eurogroup,”O’Connor said.
Greece has received 240 billion euros in aid pledges from the EU and the International Monetary Fund since 2010.
========================
It's like drip, drip,drip, .......this because Germany Spain France and Italy , Switzerland , in fact all the EU countries, like the rest of the world is in recession so if the bail-out is given the Troika knows Greece will not be able to meet the austerity requirements. The Troika said in June that Greece was meeting the target , but now , with the worsening economies around the World and civil unrest in Greece and Spain it may prove less painful if Greece leaves the Euro.
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Re: New EC Thread
Panda Thu 8 Nov - 18:33
EU-United States
Take advantage of US indifference
6 November 2012Libération Paris
Shooty
Whoever takes the White House for the next four years, Europe must face the facts: it is no longer considered a strategic priority by the United States. Europe must therefore reinforce its common defence structures and spearhead decisive diplomatic initiatives towards Russia and the Mediterranean countries, suggests a French commentator.
Bernard Guetta
No matter whether Mitt Romney or Barack Obama is elected as the next president of the United States on November 6, he will think Pacific rather than Atlantic; Asia rather than Europe. The most convincing sign of this change is that during their foreign policy debate neither of the candidates mentioned Europe or NATO, substantial allies on which all US diplomacy relied for some seven decades.
Because Europe is no longer a strategic problem for the US since the Soviet Union crumbled and because it has no new markets to conquer there, the US has turned all of its attention towards an emerging Asia where it must ensure its industrial position and curb the competing power, China, before it imposes its dominance on its neighbours and rivals in this New World.
Battle of giants
Now that the USSR is confined to the dustbin of history, a battle of giants is beginning between the US and China. It will dominate this century and will modify geo-politics; the West will no longer straddle the Atlantic but will be on the one hand the United States and Asia and on the other Europe and its Eastern and Southern neighbours – two major zones in search of an internal balance that will take a long time to achieve.
This does not mean that all solidarity will disappear overnight between the two shores of the Atlantic. A privileged tie will continue but it will constantly be weakened because the US and the European Union will have other priorities than to maintain it.
To counter Asia, the former will have to build an Americas' Front unifying, from Alaska to Argentina, into a single market zone. This would be coupled with a reinforcement of alliances with Japan, Southeast Asia and, if possible, India. The rise in Asian military spending and the redeployment of US troops towards the Pacific as well as the Sino-Japanese stalemate over a few, tiny uninhabited, but disputed islands proves that the manoeuvres have begun.
The new century began in the Pacific and is also starting, in parallel, in the basin around that large communal lake – the Mediterranean.
Foundations of a common destiny
Whether it wants it or not, whether it accepts to see it or not, the European Union cannot sustainably count on the military protection of the United States. Not only will it have to build a common defence system, but it is up to Europe to ensure the stability of its borders by weaving solid ties with Russia, Africa and the Middle East, three major neighbours in which changes cannot leave Europe indifferent and which are, in any case, closer to it than America.
Russia is regressing under the rule of Vladimir Putin who would like to hitch his country to China so as to consolidate his dictatorship far from European democracy, but this project has no future. Russia needs Europe to prevent Chinese labour and merchants from continuing their rampant annexation of Siberia. The new Russian, urban middle class is looking towards Europe and certainly not towards Asia. The Union must offer a democratic option to Russia by offering it binding ties to Europe so it can call on these when its current impasse is revealed. The same holds true for Africa and in the Middle East.
If Europe wants to stabilise the other shore of the Mediterranean, if it wants to accompany the emerging growth in Africa and the first steps of Arab democracy, if it wants to open markets, slow illegal immigration and finally turn the page of jihad it must invest in Northern Africa, in the Arabian Mashriq countries and in sub-Saharan Africa so that they are bound as long-term economic partners. As with Russia, the foundations of a common destiny must be established, which is much more obvious than it would be with China whose own stability is no longer guaranteed. That is where the future of Europe will be determined, just as that of the US will be determined in Asia.
Translated from the French by Pat Brett
Take advantage of US indifference
6 November 2012Libération Paris
Shooty
Whoever takes the White House for the next four years, Europe must face the facts: it is no longer considered a strategic priority by the United States. Europe must therefore reinforce its common defence structures and spearhead decisive diplomatic initiatives towards Russia and the Mediterranean countries, suggests a French commentator.
Bernard Guetta
No matter whether Mitt Romney or Barack Obama is elected as the next president of the United States on November 6, he will think Pacific rather than Atlantic; Asia rather than Europe. The most convincing sign of this change is that during their foreign policy debate neither of the candidates mentioned Europe or NATO, substantial allies on which all US diplomacy relied for some seven decades.
Because Europe is no longer a strategic problem for the US since the Soviet Union crumbled and because it has no new markets to conquer there, the US has turned all of its attention towards an emerging Asia where it must ensure its industrial position and curb the competing power, China, before it imposes its dominance on its neighbours and rivals in this New World.
Battle of giants
Now that the USSR is confined to the dustbin of history, a battle of giants is beginning between the US and China. It will dominate this century and will modify geo-politics; the West will no longer straddle the Atlantic but will be on the one hand the United States and Asia and on the other Europe and its Eastern and Southern neighbours – two major zones in search of an internal balance that will take a long time to achieve.
This does not mean that all solidarity will disappear overnight between the two shores of the Atlantic. A privileged tie will continue but it will constantly be weakened because the US and the European Union will have other priorities than to maintain it.
To counter Asia, the former will have to build an Americas' Front unifying, from Alaska to Argentina, into a single market zone. This would be coupled with a reinforcement of alliances with Japan, Southeast Asia and, if possible, India. The rise in Asian military spending and the redeployment of US troops towards the Pacific as well as the Sino-Japanese stalemate over a few, tiny uninhabited, but disputed islands proves that the manoeuvres have begun.
The new century began in the Pacific and is also starting, in parallel, in the basin around that large communal lake – the Mediterranean.
Foundations of a common destiny
Whether it wants it or not, whether it accepts to see it or not, the European Union cannot sustainably count on the military protection of the United States. Not only will it have to build a common defence system, but it is up to Europe to ensure the stability of its borders by weaving solid ties with Russia, Africa and the Middle East, three major neighbours in which changes cannot leave Europe indifferent and which are, in any case, closer to it than America.
Russia is regressing under the rule of Vladimir Putin who would like to hitch his country to China so as to consolidate his dictatorship far from European democracy, but this project has no future. Russia needs Europe to prevent Chinese labour and merchants from continuing their rampant annexation of Siberia. The new Russian, urban middle class is looking towards Europe and certainly not towards Asia. The Union must offer a democratic option to Russia by offering it binding ties to Europe so it can call on these when its current impasse is revealed. The same holds true for Africa and in the Middle East.
If Europe wants to stabilise the other shore of the Mediterranean, if it wants to accompany the emerging growth in Africa and the first steps of Arab democracy, if it wants to open markets, slow illegal immigration and finally turn the page of jihad it must invest in Northern Africa, in the Arabian Mashriq countries and in sub-Saharan Africa so that they are bound as long-term economic partners. As with Russia, the foundations of a common destiny must be established, which is much more obvious than it would be with China whose own stability is no longer guaranteed. That is where the future of Europe will be determined, just as that of the US will be determined in Asia.
Translated from the French by Pat Brett
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Re: New EC Thread
Panda Fri 9 Nov - 7:58
Iberian Airways, bought by British Airways last year has suffered a big loss and over 4,000 staff are to be made redundant.
The EURO declines over concern about increasing jobless and concerns over Greece.
The U.S. Stock Exchange says Spain is real concern the way it's Banks are run and the independence of Catalonia and Andalucia. it is likened to California leaving the U.S.
Draghi says he is ready to issue the Bonds but at the moment there are no takers , Spain in particular worried about the austerity measures the Countries must accept .
Former EADS Ceo had 17.6 % deficit. Labour costs in France are very high , but France it is feared would behave like Greece and Spain if austerity measures are introduced .
The German economy is slowing down , in fact, all the EU Countries and Angela Merkel is seen as the villian together with the Bundesburg Bank.
The EURO declines over concern about increasing jobless and concerns over Greece.
The U.S. Stock Exchange says Spain is real concern the way it's Banks are run and the independence of Catalonia and Andalucia. it is likened to California leaving the U.S.
Draghi says he is ready to issue the Bonds but at the moment there are no takers , Spain in particular worried about the austerity measures the Countries must accept .
Former EADS Ceo had 17.6 % deficit. Labour costs in France are very high , but France it is feared would behave like Greece and Spain if austerity measures are introduced .
The German economy is slowing down , in fact, all the EU Countries and Angela Merkel is seen as the villian together with the Bundesburg Bank.
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