News and Reviews European Economic Zone

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News and Review of European Economic Zone

 

Deflation Risk Alert, Visco Urges ECB Quantitative Easing

Monday, January 12th, 2015

 

The risk of deflation in the euro zone can not be underestimated and the best way for the European Central Bank (ECB) to deal with the problem is with the purchase of government bonds, according to the Italian central bank governor said on Sunday. Ignazio Visco, which is one of the ECB's policy council, issued the comment as officials consider the ECB to print money in order to buy government bonds, known as quantitative easing - to prevent the euro zone falling into deflation. "I can only warn against underestimating the macroeconomic risk of low inflation rates," said Visco the German newspaper, Welt am Sonntag. "If inflation is at very low levels for too long and difficult to grow the economy, we are at risk of falling into a spiral that will become increasingly intense in itself, it is what we call deflation," he said.

 

Eurozone inflation rate fell to negative territory in December for the first time since 2009, with low oil prices triggered a decline greater than expected. "No doubt, low oil prices help the economy. On the other hand it also triggered the decline in prices. And it is a problem when inflation is already close to zero," Visco said, adding that there is a risk of inflation expectations will fall deeper . "In a situation like this, the most effective way is to buy government bonds," he said. "We are discussing various options on the Policy Board of the ECB, also purchase other bonds such as corporate bonds. But the market is not very big."

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News and Review of European Economic Zone

 

Middle ECB QE Setting Program Worth $ 593 Billion

Monday, January 12th, 2015

 

The European Central Bank is said to have discussed the quantitative easing program worth about € 500 billion ($ 593 billion), according to a statement from the resource persons in the central bank on Friday. Although no decision has been generated, the program will likely include the purchase of sovereign bonds that have investment-grade 'BBB-' / 'Baa3 "or higher.

 

The news comes following the global market rally on Thursday, after ECB President Mario Draghi reiterated that the central bank is open to sovereign bond buying program. A policy options that could potentially be announced in the next ECB policy meeting on 22 January.

 

Purchase only includes investment-grade bonds, and not speculative-grade, also will reduce the risk to the ECB balance sheet. By doing so, the government bonds of Greece and Cyprus which has a rating of 'junk' will not be included in the central bank's purchase program.

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News and Review of European Economic Zone (Greece)

 

European Financial Institutions Getting Ahead of Greek Election

Monday, January 12th, 2015

 

Banks and financial institutions in Europe to prepare ahead of Greek elections later this month, will be related to a possible Greek exit from the euro. This preparation includes a detailed examination of the parties will have a significant impact with a Greek exit, see the credit exposure or the amount of the loan at the time of default, and examine how they will provide cross-country funding for local operation. Some companies are also preparing for the impact on the system of payments and trade-rate experiment with the platform to see how the effects of the addition of the Greek exchange or trading with potential capital flow control. Corporate giants Citigroup Inc., Goldman Sachs Group Inc., and brokerage firm ICAP including from several institutions that reportedly do this preparation.

 

Most analysts see a possible Greek exit is quite low. Economists Commberzbank stated odds Greece out of the euro is less than 25%

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News and Review of European Economic Zone

 

ECB Coeure: Greek elections Not Change Line ECB Policy

Tuesday, January 13th, 2015

 

General election in Greece on January 25 will not affect the policy of the European Central Bank's path as the ECB considers to launch a government bond purchase plan at a meeting three days earlier, according to one senior ECB. Angora ECB Executive Board Benoit Coeure Jerma told the daily newspaper Die Welt that the central bank is ready to take a decision on whether to launch a new bond purchase plan at a meeting on January 22, but that does not mean it's for sure.

 

"Elections in Greece did not change the path of monetary policy," said Coeure in the newspaper. "We are in any situation are ready to take a decision on 22 January. It does not mean that we actually have to decide," he added.

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News and Review of European Economic Zone (UK)

 

Record UK Inflation Lowest In 15 Years

Tuesday, January 13th, 2015

 

UK inflation growth again recorded a decline in December, and be the lowest in almost 15 years. Low inflation will force the Bank of England Governor, Mark Carney, to create an open letter to explain why inflation is very low growth.

 

Office for National Statistics reported annual inflation grew 0.5% in December, from 1.0% the previous month, and below economists' estimates of 0.7%. Inflation growth in December was the lowest since May 2000.

 

A drop in oil prices as well as the supermarket price war in the cause of low inflation. The data from the ONS showed food prices fell 1.9%, while gasoline prices dropped 18% from its peak in 2012. With inflation further away from the target of 2.0% BOE, and the weakness of the euro zone economy to help Carney and the majority of members of the Monetary Policy Committee to maintain interest rates at a record low of 0.5%

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News and Review of European Economic Zone (Italy)

 

Italian Industrial Output Rise in November

Tuesday, January 13th, 2015

 

Italian industrial output recorded the largest increase since June, gave the signal recovery third largest economy in the euro zone. Istat reported industrial output rose 0.3% in November from the previous month, better than the 0.1% rise eskpektasi by economists. As for October output was revised to 0% -0.1% of the previous release. The increase is said to be triggered by an increase in consumer goods by 1.8%, and intermediate goods rose 0.8%.

 

"This is an early sign of recovery, but it is too early to say this is the beginning of a positive trend" Istat official said.

 

The Italian government under Prime Minister Matteo Renzi expects the economy will contract in three consecutive years in 2014, and expects to grow moderately this year.

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News and Review of European Economic Zone

 

EU Eases Pressure Related Policies Budget Deficit

Wednesday, January 14th, 2015

 

The European Union will alleviate the stress associated with cutting the budget deficit to its member countries. This relief is expected to help the French, Italian, and other Member States in adjusting their financial administration with EU rules.

 

The European Commission, the executive body of the European Union to the national budget, Tuesday announced a new policy to assist the implementation of the budget rules the block, which maintains the budget deficit below 3% of annual gross domestic product. EU countries over the past five years trying to cut the budget deficit swelled due to the economic crisis, tax increases and spending cuts that have hindered the growth and increase the number of unemployed 28-nation bloc by this member.

 

European Commission Vice President, Valdis Dombrovkis, confirms this budget rule is "landasaan European economic management." If the member states adopted the "structural reforms", such as changes in labor rules, they can avoid a deficit reduction that has been agreed upon before this. This relief will help the French government had asked the commission to run a higher deficit than had been agreed. Similarly, the Italian who has a debt ratio of 130% of its GDP

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News and Review of European Economic Zone (France)

 

the Inflation of France Fall Following CPI report

Wednesday, January 14th, 2015

 

French inflation fell to a 5-year, adding pressure on the European Central Bank (ECB) to take steps to avoid the risk of deflation and spur growth. Consumer Price Index (CPI) France only rose slightly in December, when seasonal price increases in the tourism sector. French monthly CPI rose 0.1% to an annual inflation rose only 0.1% French, the lowest level since October 2009. Previously, a survey of analysts by Reuters projecting no change either in the monthly and annual indexes.

 

While price stability Euro area, the Harmonised Index of Consumer Prices (HICP), rose 0.1% in December. However, the data released by the European Central Bank is lower than the 0.4% rise in the previous month

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News and Review of European Economic Zone

 

Euro Zone Industrial Production Up 3 Months streak

Wednesday, January 14th, 2015

 

Eurozone industrial production rose 3 consecutive month in November, giving an indication of the economic bloc of 19 countries that continued growth in the final quarter of 2014 as a moderate.

 

As in October, driven by a rise in the production of consumer goods, which is an indication of a decline in oil prices could increase domestic demand for goods and services.

 

European Bureau of Statistics, Eurostat, reported that industrial production consists of manufacturing production, mining, and utilities rose 0.2% in November from the previous month, but recorded a decrease of 0.4% when compared to production in November 2013. Eurostat also revised production Okober month to 0.3% from 0.1% the previous release.

 

Eurostat also reported last week the euro zone retail sales rose two consecutive months in November by 0.6%. The increase was supported by higher sales of goods other than food and gasoline

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News and Review of European Economic Zone (UK)

 

UK House Prices Growth Slows

Thursday, January 15th, 2015

 

UK house prices rose by an annual rate of the slowest since May 2013 at the end of last year, as tightening lending rules and the approach of elections reduce the level of demand, according to one industry body on Thursday. Royal Institution of Chartered Surveyors (RICS) said its monthly house price index fell to +11 in December from +13 in the previous month. The index is an assessment of whether house prices have been going up or down on an annual basis during the previous 3 months.

 

UK housing sector market has slowed since mid-2014, when the government requires banks to tighten checks whether consumers can bear the mortgage if interest rates rose sharply. Halifax said last week that house prices in the fourth quarter of 2014 rose as much as 7.8% to an annual rate, down from a high level of 10.2% in July. RICS said as tightening lending rules, the election on May 7 will also make buyers and sellers think twice.

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News and Review of European Economic Zone (Switzerland)

 

Swiss National Bank (SNB) Remove the value of the franc peg

Thursday, January 15th, 2015

 

Switzerland's central bank surprisingly on Thursday announced to remove the ceiling value of the exchange rate EURCHF at 1.2000 and raise the fees that banks are subject to the deposit in that currency. Also cut its benchmark interest rate 50 basis points.

 

The SNB said it would cut its target range of 3-month Libor to -1.25% to -0.25% from -0.75% to + 0:25% which will be effective immediately.

 

EURCHF minimum exchange rate which was introduced in September 2011 to overcome deflation taken to address the risk of deflation as well as provide relief for exporters. But Since its removable bottom peg the value of the Swiss franc, the currency rose sharply break below parity with the Euro currency followed by.

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News and Review of European Economic Zone

 

Euro Zone Trade Balance Surplus Landscape

Thursday, January 15th, 2015

 

The increase in exports made surpuls euro zone trade balance widened in November. The rise in exports is also an indication of the weakening of the euro exchange rate can boost economic growth is moderate.

 

EU statistical bureau Eurostat, reported a trade surplus of € 20 billion in the month Nocember, from € 16.5 billion in the same period in 2013. The reported exports rose 0.2% from October, while the level of imports has not changed. But the level of eurozone exports quite volatile in recent months, after jumping sharply in September, then recorded a slight decline in October.

 

The data into another positive data after the previous Eurostat reported eurozone industrial production rose 3 consecutive months in November, and retail sales rose two consecutive months in November.

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News and Review of European Economic Zone

 

ECB Coeure: To be effective, QE Must In Bulk

Friday, January 16, 2015

 

Quantitaive easing program of the ECB should be able to large quantities to be effective, according to members of the Executive Board of the European Central Bank, Benoit Coeure on Friday in an interview with the newspaper. "To QE can be effective, it must be in large numbers," said Coeure the Irish Times newspaper. "How big is a sufficient amount? This should be informed decisions based on what is known as a transmission line."

 

Commenting on the ECB's willingness to accept collateral from Greece with the operation of the funding, he said: "We have a rule that the guarantee of an acceptable state under the operation of monetary policy if sufficient credit rating, or if not the country is under the program EU / IMF . "The ECB will soon announce a new scheme to buy euro zone government bonds, known as quantitative easing, possibility as soon as next week, to overcome deflation and return the economy to a strong position

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News and Review of European Economic Zone (Germany)

 

Inflation Germany 5-Year Low

Friday, January 16, 2015

 

German inflation declined in December, reaching its lowest level since October 2009. The sharp decline in prices in Germany, the largest economy in Europe, supporting market expectations that the European Central Bank (ECB) will announce the purchase of government bonds in large quantities during the meeting on 22 January, to avoid deflation.

 

Germany's annual inflation, measured by EU standards, was 0.1% in December, while prices increased 0.1% in the same month. Consumer prices, as measured by national standards, also in accordance with previous predictions. Monthly CPI unchanged, 0.0% remained the same as the previous month, while the annual CPI rose 0.2%.

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News and Review of European Economic Zone (Switzerland)

 

SNB Intervention Fall USDCHF

Friday, January 16, 2015

 

The exchange rate USDCHF managed to bounce from 0.7785 low to the 0.8896 level so far due to the intervention of the Swiss central bank (SNB) to provide liquidity as a result of investor panic after the SNB step startling disconnect EURCHF peg value.

 

While EURCHF also rose sharply from 0.8500 lows after the announcement of the SNB to the level of 1.0409 so far due to the liquidity provision SNB intervention. SNB subsequent action to direct interventions have reduced the weakening of the Euro against the Swiss Franc.

 

The response of the observer is quite diverse, such as businessmen luxury watches Swatch Hayek stated SNB steps to dispose of the value of the stakes will cause a tsunami to exporters and Swiss tourism. Without the ceiling value, perhaps the Swiss economy has slumped in the recession phase.

 

Since 2012, the SNB has spent 188 billion francs or the equivalent of $ 206 billion to intervene by buying foreign currency demo maintain the value of the ceiling. Overall the SNB has had foreign currency worth 432.4 billion francs by the end of September 2014. This figure is certainly quite fantastic and is equivalent to the annual economic output of Switzerland for 3 quarters.

 

The situation needs a fairly large SNB intervention is consequently sniff by economists some time ago, that in the end the SNB will release the value of the stakes. On release Bloomberg survey conducted on October 4 to October 9 shows the results of a survey of nine economists that the peg will be released in Q4 2014 fastest. 4 While economists expect the release of the ceiling value in 2015, while four other economists predict in 2016.

[mynameisandhy]

News and Review of European Economic Zone (UK)

 

CBI: UK Financial Sector Gains in Fourth Quarter

Monday, January 19th, 2015

 

UK financial sector reported a sharp rise in the volume of business in nearly 20 years in the last quarter of last year, according to the Confederation of British Industry on Monday. CBI said its index of business volume of his quarterly financial services rose to +57 in December from +49 in September and reached its highest level since December 1996. "The increase in the growth of financial services companies continued to strengthen, with optimism as a whole, the volume of business, and increased profits, "said Rain Newton-Smith, director of the CBI economy. The data are in contrast with the official data, which menunukkan output of financial services in the three months to October fell by about 3.2% from last sethaun.

 

Separate projections by accountants Ernst & Young, which was also released Monday, shows that the drop in oil prices will help the UK economy as a whole to grow as much as 2.9% this year, 0.5% higher than the previous forecast in October. "While the drop in oil prices did not change the outlook pertumbuan, but it happened right as the recovery is losing momentum and will sustain the growth of riding for one or two years ahead," said Peter Spencer, advisor at Ernst & Young.

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News and Review of European Economic Zone

 

ECB Only Have Few Options Overcome Deflation Risk of Prolonged

Monday, January 19th, 2015

 

ECB advisory board member Ewald Nowotny stated that the ECB had little option to overcome a prolonged period of deflation that threatens the euro zone.

 

In the near future, the ECB will face a crucial test to execute the previous statement, "will do everything possible" to maintain the stability of the Euro when it will decide the bond-buying program to overcome deflation and sustain the economic recovery. When asked if the central bank began to run out of ammunition and what steps can still be taken by the ECB, Nowotny just reply with "likely quite limited".

 

Inflation in the Euro zone are reported still well below the ECB's medium-term target of below 2 percent level, after getting a negative inflation rate in December, the ECB's Nowotny expects inflation in the month of January is still negative, but the overall inflation rate for 2015 is expected still in positive territory .

 

Prolonged deflation experienced by Japan, which for two decades of low economic growth, low inflation and low interest rates, or can also be referred to as stagflation would be very bad if the same thing is experienced by the Euro zone. The most negative effects will appear on the labor market, and also dangerous for the political and social situation of the Euro zone.

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News and Review of European Economic Zone

 

Hollande: ECB QE Will Launch This Week

Monday, January 19th, 2015

 

French President Francois Hollande, said the European Central Bank will be announcing plans to buy government bonds this week. The statement further increased speculation the ECB will follow other major central banks in implementing the program commonly called quantitaive easing.

 

"On Thursday, the ECB will take a decision to buy government bonds, which will provide significant liquidity to the European economy, and will be beneficial for economic growth" Hollande said.

 

Many economists expect the ECB will announce a program of bond purchases by € 550 billion ($ 639 billion). Speculation ECB will launch a bond purchase program continued to increase after the after the European Court of Justice supports the purchase of government bonds by the European Central Bank through the Outright Monetary Transaction (OMT), and the Swiss National Bank measures that eliminate boundaries franc exchange rate against the euro and lower interest rates alleged in anticipation of ECB bond buying program

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News and Review of European Economic Zone

 

Merkel: QE Is Not A Substitute For Economic Reform Of The Eurozone

Tuesday, January 20, 2015

 

Chancellor of Germany public intervention in the debate Monday, warned that the printing of money by the European Central Bank is not a substitute for reform of the economy in the Euro zone. Speaking in the presence of listeners including Mario Draghi, President of the ECB Merkel stated the ECB buying Government bonds with new money should not be an excuse to ignore the reforms on the labor market and other markets that had to be done.

 

"People can quickly convinced one (policy) can replace the other," stated Merkel in Germany share trading, Deutsche Boerse. "It is clearly not possible. The pressure to improve competition in Europe must be maintained, otherwise, and I really, no one can help us. "

 

Merkel was careful not to directly commenting on the decision of the ECB quantitative easing program, along with the great expectations the market ahead of his announcement Thursday of this week

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News and Review of European Economic Zone

 

Europe Does Not Plan To Loosen Sanctions Russia

Tuesday, January 20, 2015

 

The European Union reiterates no plans to loosen the sanctions that had been given to Russia in the near future. The release of the report that the Central European review of ways to improve relations with Moscow have raised the question of how long such blocks can unite to confront the aggressive attitude of Russia towards Ukraine.

 

Some European Union members are more friendly with Russia saw a sharp fall in world oil prices has hit Russia's economy enough so that it can make room for easing sanctions in an effort to improve the diplomacy. However, a meeting of European Foreign Ministers yesterday insisted would only loosen sanctions if Russia had an agreement Minsk approved September ago after ending the conflict in Ukraine.

 

"There is no normalization of relations. The situation now is worse than the previous couple of weeks, "said Chief Eu Foreign Minister Frederic Mogherini. Germany's Foreign Minister Frank-Walter Steinmeier point out efforts to restore the ceasefire quite disappointing. The conflict in the eastern region of Ukraine quite increased in the last few days where battles are increasingly common between government troops and separatists in Ukraine around the city of Donetsk, one of the pro-separatist base in Russia

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News and Review of European Economic Zone (Germany)

 

The level of Investor confidence in Germany Rose in January

Tuesday, January 20, 2015

 

Germany investor confidence level rose to the highest level in 11 months ahead of monetary policy meetings Eruopean Central Bank on Thursday. ZEW expectations index reported investors and analysts that the economic memprediski Germany six months ahead rose to 48,4 in January, from 34.9 in December, and much higher than the forecast of economists of 40.1.

 

President of the ZEW, Clemens Fuest, said stock market upheavals, the election and the decision, Switzerland Greece National Bank removes the limit on the exchange rate of the franc against the euro look not mempenagruhi economic expectations for Germany. Fuest adding instead a decrease oil prices and depreciation of the value of the euro that tuka contributed to the rise in sentiment.

 

Index of sentiment for current economic conditions in Germany rose to 22.4 bolted from December of 10.0, and above the estimate of economists of 15.0.

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News and Review of European Economic Zone (UK)

 

Translucent British Unemployment Rate Down 6%

Wednesday, January 21, 2015

 

UK labor market continues to show strong gains in November, raising the living standards of low inflation and the unemployment rate fell to below 6% for the first time in 6 years. Perpekan average salary, excluding bonuses, rose 1.8% in the three months ended November.

 

The decline in crude oil prices dragged UK inflation to 0.5% in December, the lowest in the last decade. According to the Office for National Statistics, salary increases have been higher than inflation in three consecutive months up to November, so as to raise the living standards of citizens of the United Kingdom.

 

ONS reported the number of jobless claims in December fell as much as 29,700 claims, a better-than-expected 24,200 claims. The unemployment rate in November fell to 5.8% from 6.0% and better-than-expected 5.9%

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News and Review of European Economic Zone (UK)

 

Low Inflation causes the MPC Absolute Hold Interest Rates

Wednesday, January 21, 2015

 

Two of the members of the Monetary Policy Committee of the Bank of England who previously chose to raise interest rates, re-elect to keep interest rates on monetary development policy meeting January 8.

 

Martin Weale and Ian McCafferty are two of the nine members of the MPC that from August to December chose to raise interest rates in each monetary policy meeting the BOE. Low inflation risk down to below 0% is said to be the cause of their back opted to keep interest rates. Absolute decision to keep interest rates are reinforcing speculation the BOE will not raise interest rates until next year.

 

Continue the fall in crude oil prices also dragged British inflation, the Office for National Statistics reported inflation of 0.5% in December, and be the lowest in the last decade. Nine members of the BOE MPC led by Governor Mark Carney expected inflation to drop to 0% in the first quarter of this year, and "there is a possibility that the same" inflation will be below 0%. Monetary policy "can and will be adjusted" if necessary to achieve the inflation target of 2.0%.

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News and Review of European Economic Zone

 

Earning reports Supports Strengthening FTSE

Wednesday, January 21, 2015

 

UK stock market rose five-day losing streak, the FTSE 100 index touched its highest level in six weeks is supported by several companies reported earnings.

 

Pearson Plc. rose 2.8% after it reported a full-year earnings higher than analysts expected. Dixons Plc rose 1.7% after earnings projections above analysts' estimates. ARM Holdings Plc and BAE Systems Plc each gained 1% after several brokers provide recommendations to buy their shares.

 

The FTSE 100 index rose 0.6% to 6659.96. While the range of 6593.5 FTSE Futures traded at 20:12 pm, with daily lows and highs 6580.5 6611.5

 

FTSE has risen 4.3% since the Swiss National Bank removes limits franc exchange rate against the euro on January 15, making speculation the European Central Bank will launch a bond-buying program is increasing. ECB monetary policy meeting held on Thursday, tomorrow is expected to announce a program of bond purchases worth € 550 billion ($ 636 billion).

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News and Review of European Economic Zone (Spain)

 

Spain Unemployment Rate Unchanged from Q4

Thursday, January 22, 2015

 

Bureau of Statistics of Spain (INE) Thursday reported a fourth-quarter unemployment rate of 23.7%, unchanged from the previous quarter. This stagnation occurs because a significant increase in new jobs has not offset the increase in the number of job seekers.

 

INE describes the number of unemployed in the country's 4th largest economy-euro area have increased by 30,100 people in the last three months of 2014 compared to the previous quarter, to a total of 5.46 million people. Nevertheless, the amount of labor in the 4th quarter increased by 65,100 people, the first increase of the entire 4th quarter since 2006. The unemployment rate of 23.7% is the highest level than other developed countries the unemployment rate. But there is a consistent decline since mid 2013. The Spanish Finance Minister Luis de Guindos, Spain's economy grew asserted by an annual pace of more than 2%