Even as Eurozone countries are struggling with debt crisis, its leader Germany continues to report good figures of the economy. German business confidence has reportedly hit fresh post-reunification high. Germany’s strong exports continue to drive the strong economic recovery.
IFO, the business confidence index is closely watched by markets. IFO climbed to 109.9 in December from 109.3 in November, itself a 20-year high. Germany is driving the EU’s recovery despite worries of debt crisis that hit most indebted countries of the Eurozone area.
Though the manufacturing growth has witnessed a small dip, analysts have inclined to brush it aside with the growing business confidence. Analysts are pointing out the increasing confidence among retailers and wholesalers. Some are expecting Germany’s annual GDP growth for the fourth quarter would be around 6 percent as compared to 3.9 percent of third quarter.
ECB president Jean-Claude Trichet confirmed on Thursday that the European Central Bank would continue to buy government bonds of Eurozone countries. The ECB already bought government bonds of Eurozone countries worth 67 billion Euros. He did not offer any details as per BBC news.
Trichet said the ECB would continue to support troubled banks in Eurozone area. After Trichet’s announcement, the Euro rose to $1.3145 from $1.3059 on Thursday. ECB decided to maintain bank rate at 1%, as expected.
On Thursday (December 2), Spain government carried a bond auction to raise 2.47 billion Euros. Spain had to offer increased yield on its 3-year bonds, 3.7% instead of previous rate of 2.5% in October. Yesterday, Portugal also increased its yield on 1-year bonds from 4.8% to 5.3%. Markets are still nervous on public finances of Portugal and Spain.
Elsewhere, official figures confirmed Q3 growth rate of 0.4% for Eurozone, a slow growth compared with Q2 growth rate of 1%.
Article first published as Portugal Workers Observe 24-hour Strike against 2011 Austerity Budget on Technorati.
Portugal’s two main two workers’ unions’ joint call for 24 hour strike is going successful as per government and unions’ data. Rail services are paralysed from north to south of the country, with 80% of the rail services not running. Majority of the flight services are cancelled according to government sources. The Joint strike call is said to be the first in 22 years.
The unions are critical of the proposed budget cuts saying it is quite unfair that only the workers have to sacrifice. They say they oppose the government’s top most priorities are only deficit, deficit and deficit. BBC news quoted the unions as saying, all of the country’s ports are closed; air traffic controllers and ground staff of airports are observing strike; bus and ferry links are disrupted; fewer than 10% of the workforce at Volkswagen’s Auto Europa plant have turned up for work.
Unfair Media Criticism
As usual, various media of the western countries from EU to the US have written negative analyses on Portugal strikes. They continued to support austerity measures and to oppose workers’ anger towards austerity measures. They failed to acknowledge the hardships to which the workers across the Europe and the North America were subjected to, even though they are not part of the problem of debt crisis and financial crises. Such an outlook can be gauzed to the ownership of all media by a few multinational media companies.
These MNCs are beneficiaries are the austerity measures imposed by the EU countries in the name of maintaining fiscal discipline, as if the workers’ salaries and pensions are the main sources of fiscal indiscipline. These media companies never acknowledge the indiscipline of the
The leading economies of the Europe have slowed down in third quarter like the US. The economists and analysts have been in alert mode since it became known that the US growth was slowing down in second half. It is interesting to see these analysts are not worried that much for Europe’s slow growth in second half of 2010.
Europe’s largest economy, Germany is estimated to record a sharp decline in its growth to 0.7% in third quarter comparing with its second quarter growth of 2.3%, which is revised upwards from 2.2%, the previous figure. France GDP growth declined from 0.7% in second quarter to 0.4% in third quarter. Italy’s growth declined to 0.2% from 0.5% of second quarter.
The Eurozone countries grew by 0.4% on average which is a sharp decline from its second quarter average growth of 1%. Last month it was revealed that the UK grew by 0.8% in third quarter, less than 1.2% of second quarter. The US is expected to grow by 0.5% in third a slight increase from its second quarter figure of 0.4%. Japan grew in second quarter by 0.4%, which declined from 1.2% of its first quarter growth figure. Its third quarter figure is not yet released.
Bloomberg | Jul 12, 2010 | 19:35 IST
The European Commission told government officials that failure to publish individual banks’ exposure to sovereign debt could damage investor confidence. “There is considerable opposition to the publication of individual exposures to sovereign debt,” the European Union’s executive arm said in a confidential letter dated July 9 that was obtained by Bloomberg News. “Stepping back” from planned publication of this information “would give the impression that we have something to hide.” EU regulators are examining the strength of 91 banks to determine if they can survive potential losses on sovereign-bond holdings. They are counting on the tests to reassure investors about the health of financial institutions from Germany’s WestLB AG and Bayerische Landesbank to Spanish savings banks as the debt crisis pummels the bonds of Greece, Spain and Portugal. EU finance officials are currently debating how much detail from the tests to disclose. The results are scheduled to be released on July 23. “We are increasingly worried to note an apparent weakening of the commitment to transparency,” the commission said in the letter to the EU’s Economic and Financial Committee, which comprises senior officials from member states, the commission and the European Central Bank. If the tests aren’t “credible and transparent,” there is a “high risk that it will disappoint the markets.”
The EFC prepares the agenda for monthly meetings of euro- region finance ministers, who are gathering in Brussels today to discuss the publication of the tests. German Finance Minister Wolfgang Schaeuble told reporters before the meeting that the tests will be an “important step” toward easing investors’ concerns about the strength of the region’s banks. The commission also said in the letter that regulators should publish data on banks’ Tier 1 capital ratio that excludes government aid. “Some national supervisors have suggested that banks’ Tier 1 ratios without government support should not be published,” it said. “We believe that these data should be published because it constitutes important information for the markets.”
Reuters | Sat Apr 3, 2010 | 3:13am IST
The International Monetary Fund fueled the economic crisis in emerging Europe last year to create a situation in which it would be asked to help bail out the region, a Czech central banker was quoted as saying on Friday. The Fund, which led the rescue of former Communist Hungary, Latvia, Ukraine and Romania, misinterpreted data as it was seeking a task under its new management, Czech deputy governor Mojmir Hampl told Austrian daily Der Standard in an interview. "It’s ridiculous that it was the IMF, of all people, who accelerated the crisis," Hampl said. "This was an apparent attempt to bring about a bailout of an entire region. "Before this crisis, (the IMF had) virtually no clients," he added. "With this crisis and the new leadership under Dominique Strauss-Kahn, the Fund found a new job and got more funds."
However, Zdenek Tuma, the Czech National Bank’s governor, contradicted his deputy when asked about Hampl’s interview. "The opinion expressed by Mr Hampl that the IMF accelerated the crisis is his personal opinion. This is not a position of the Czech National Bank and I don’t share it," Tuma told Reuters over the phone. "The IMF is an institution with a mandate to support countries when they are in trouble," Tuma said. "Countries like Latvia or Hungary had structural problems … and fiscal problems. This is exactly the case when the IMF should come in, and that happened," Tuma said.
BBC News | Thursday, 25 March 2010 | 11:01 GMT
The euro has fallen to its lowest level against the dollar for 10 months as European Union leaders disagree on how best to deal with Greece’s debt crisis. Comments by the Bank of China’s deputy governor about high debt levels across Europe also pushed the euro lower. Against the dollar, the euro fell to $1.333, its lowest level since early May last year. Against the pound, it fell by 0.3% to 89.338 pence. EU leaders are meeting in Brussels, but Greece is not officially on the agenda. However, European Commission president Jose Manuel Barroso has repeated calls ahead of the summit for leaders to agree an aid package for Greece. Germany is unconvinced that Greece needs help. Greece itself has not asked for any direct financial assistance.
Deputy governor of the Bank of China Zhu Min was reported as saying the Greek debt crisis was just the "tip of the iceberg", which heightened concerns about high budget deficits in other European countries. Mr Zhu’s comments are "as good an indication as any of how rapidly fundamental concerns are growing about the eurozone", said Simon Derrick at Bank of New York Mellon. "Indeed, this comment might well signal the point that we stop talking about a ‘Greek debt crisis’ and start talking about a ‘eurozone structural crisis’ instead."
Thursday, 25 March 2010 07:15 GMT
The European Commission president has called on eurozone countries to decide on help for the debt crisis in Greece. Jose Manuel Barroso said the response was a test of EU leaders’ commitment to financial stability as they start their two-day summit in Brussels. But Germany, the largest economy in the euro-zone, is blocking a last-minute meeting of eurozone leaders. It wants the International Monetary Fund to play a key role, and sanctions for countries that break budget rules. It is not formally on the summit agenda but Greece is on everybody’s mind. With German taxpayers fiercely opposed to bailing out the debt-ridden country, Chancellor Angela Merkel wants the IMF to take the lead in a joint package with the EU. It would be the first time a eurozone country is rescued from Washington and some fear that would further weaken the euro.
The president of the European Commission made an urgent appeal to EU leaders to create a safety net for Greece. Their response, he said, would be a test of their commitment to European and monetary union. Mr Barroso happens to be a former prime minister of Portugal, whose debt was downgraded on Wednesday, in a move that heightened fears that the Greek crisis is
BBC NEWS | 09:52 GMT | Wednesday, 24 February 2010
Hundreds of thousands of Greeks are on strike to protest at the imposition of austerity measures to save the economy. Greece’s airspace will be closed to all flights, trains and ferries will stand idle, and archaeological sites shut. It is the second general strike in two weeks and coincides with growing anger at the EU’s response to the crisis. The action is set to be the biggest since Greece’s socialist government introduced cuts to bring the country’s debt and deficit under control. Greece currently has a spiralling public deficit of 12.7%, more than four times higher than Eurozone rules allow. The government has pledged to cut this to 8.7% this year, and also reduce the 300bn-euro ($419bn; £259bn) national debt, by freezing public sector salaries, raising the average retirement age to 63 by 2015, and increasing taxes on petrol, alcohol and tobacco. It also wants to crack down on tax avoidance. Greece’s black economy is estimated at 30% of official gross domestic product.
The BBC’s Malcolm Brabant in Athens says that for the second time this month, Greece will be isolated from the rest of the world for 24 hours as all flights into and out of the country have been cancelled. Commuters will be left without most forms of public transport, while public schools, ministries, and municipal offices will be closed. Many hospitals will operate only with emergency staffing. Archaeological sites, including the Acropolis, will be closed to tourists, chipping away at the country’s international image, our correspondent says. Two separate Continue reading
BBC NEWS | 2010/01/29 | 11:25:43 GMT
EU Unemployment Rates
- Highest: Latvia – 22.8%, Spain – 19.5%, Estonia – 15.2%
- Lowest: Netherlands – 4.0%, Austria – 5.4%, Cyprus – 6.1%
- Source: Eurostat
Unemployment in the 16 countries that use the euro hit 10% in December for the first time since the single currency was introduced in 1999. It had been reported that the rate hit 10% in November, but this has subsequently been revised down to 9.9%. Some 15.8 million people are now out of work in the eurozone, according to Eurostat. Across all 27 countries that make up the EU, there are now 23 million people unemployed.
Latvia has the highest jobless rate in the EU at 22.8%. Spain continues to have the highest rate in the eurozone – rising to 19.5% in December, up from 19.4% in November. The Netherlands has the lowest jobless rate at 4%, followed by Austria at 5.4%. Some 21% of under-25s in the eurozone were unemployed in December 2009, with Spain suffering the highest rate of all, at 44.5%. According to Eurostat, a total of 87,000 jobs were lost across the eurozone during December. That was the lowest increase since May 2008.
Responding to the figures, Howard Archer from IHS Global Insight says eurozone unemployment will increase further in the coming year. “Although the rise in eurozone unemployment has slowed in recent months, it still seems poised to trend higher during much, if not all, of 2010,” he said. Separate figures released by the country’s National Statistics Institute show that in the final three months of 2009, 4.33 million people were unemployed in Spain.