News and Reviews European Economic Zone

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News and Review of European Economic Zone (France)

 

French Bond Yields Tumble Ahead of ECB Decision

Thursday, May 2, 2013

 

Borrowing costs for the French government's benchmark 10-year fell to a record low ahead of ECB rate decision today.

 

At a bond auction that was held by the French government managed to sell debt securities benchmark 10-year, $ 4:02 billion euros with an average yield of just 1.81% below the record low of 1.94% last month.

 

French bond yields decline was triggered by hopes that ECB President Mario Draghi is likely to cut its benchmark rate to a record low of 0.5%, in line with the fall in inflation and confidence in the European economy. In addition to the ECB cut interest rates to give a strong signal that interest rates are still near the lows will last for the short term.

 

In France alone, which is the second biggest economy in the euro area claims for jobless benefits rose to record high levels in the 3:22 million, while the consumer price index has plummeted in the last 7 months.

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News and Review of European Economic Zone

 

ECB Cuts Interest Rate Being 0.5%

Thursday, May 2, 2013

 

European Central Bank on Thursday decided to cut its benchmark rate by 25 basis points to 0.50%, in line with economists' expectations.

 

However, with most markets had anticipated the decision, making the effect of the euro currency pegerakan also relatively limited. Investors are still waiting for the press conference ECB President Mario Draghi to be held in Bratislava, Slovakia, starting at 19:30 pm.

 

EURUSD is currently offered in the range of $ 1.3190 or about 0.15% above the closing price on Wednesday.

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News and Review of European Economic Zone

 

Draghi Open Advanced Monetary Easing Possible

Friday, May 3, 2013

 

European Central Bank President Mario Draghi opened a new front in battle against debt crisis after cutting its benchmark interest rate to the lowest level on Thursday. Speaking in Bratislava, Draghi hinted that officials will likely take steps that had never happened before with a bank charge that put excess cash with the ECB overnight interest rates and negative interest rates are possible.

 

"We will look at all the data in and ready to act if needed," Draghi said at a press conference in the capital of Slovakia after the ECB cut its benchmark interest rate of 0.25% to 0.5%. Asked whether further action can be included with a negative deposit rate of zero current level, he said: "We will look at this with an open mind."

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News and Review of European Economic Zone

 

Observer: Draghi Just Nonsense

Friday, May 3, 2013

 

Mario Draghi has repeatedly expressed its commitment to help the European economy. But many analysts believe the European Central Bank Governors speech (ECB) is futile because it is not accompanied by real action. Lower interest rates are only considered as a symbolic action to satisfy the expectations of market participants.

 

Gemma Godfrey of Brooks Macdonald Asset Management said Draghi's comments is not a drug that can instantly cure the condition of Europe. Authorities have not done anything to improve regional business activity. "Unlike the Americans, the ECB does not perform its role in Europe," said Godfrey to the NCBC. He compared the ECB stance by the Federal Reserve Bank in recent months, in which the Fed move much more aggressively and quickly in an effort to accelerate the national economy. In addition to the implementation of low interest rates, Ben S, Bernanke and colleagues consistently create a new form of monetary formula gradually bond purchases.

 

The ECB itself has just cut interest rates to 0.5% yesterday to create a climate of cheap credit in the Euro zone. But the policy was deemed not enough to boost the economy is already stuck. "In Europe, his condition continued to deteriorate so that interest rate cuts will only have a limited effect," said Godfrey opinion. ECB steps would be futile because of cheap credit facilities in the market will not be able to be absorbed by households and firms, which are currently being held in debt bondage. Let alone to borrow funds, to pay for other expenses it is unlikely they can afford. "That's the way it should be sought out by Draghi and not just keep talking," said Godfrey.

 

As for some of the indicators that could represent poor neighborhood conditions such as rising unemployment in some countries. In Spain for example, nearly half of reproductive age have no livelihood for a lot of companies out of business. "The European economy is very fragile, so Germany is now affected. Otherwise it could be called bad, it is worth mentioning the 'stagnation' and 'recession'. These far countries prisoners are still difficult to solve the problem debts," added Godfrey. He hopes Mario Draghi could find a new resolution to solve Europe's problems.

[mynameisandhy]

News and Review of European Economic Zone

 

The expected recession in the Euro Zone deeper

Friday, May 3, 2013

 

The economic outlook for EU and the recession has weakened and unemployment rising problem in the eurozone is projected to get worse, according to the European Commission's report on Friday.

 

European Commission, estimates the rate of GDP in the 27-nation European Union is likely to shrink 0.1% this year compared to projections in the month of February. While the rate of GDP in the 17-nation euro zone members diekspektasikan contracted -0.4% this year, compared to the previous estimate of -0.3%.

 

At the same time, the outlook for the unemployment rate in the euro area remains grim, with unemployment diekspektasikan reached 11.1% across the EU and increased to 12.2% in the Euro zone. The unemployment rate is expected to persist at a fairly high level throughout 2014.

 

Even in Spain the unemployment rate is expected to increase to 27 percent this year, up from 25% last year, while the outlook for Portugal is projected to rise to 18.2% from 15.9% the previous year.

[mynameisandhy]

News and Review of European Economic Zone

 

Russia to Extend Loan Maturity In Cyprus

Monday, May 6, 2013

 

A Troika document released today shows that Russia has agreed to a two-year extension of the loan Cyprus. It was also decided to reduce the interest rate of 2%.

 

Officials of the EU, ECB and IMF stated that Cyprus has met all the requirements for the release of the first tranche of a bailout of 10 billion euros, with which the international lenders will perform in May. Extension of loan from Russia provide additional financial support for archipelagic state in crisis.

 

According to the document: "Convinced that has been obtained from the Cyprus government that official agreements between the Republic of Cyprus and the Russian Federation on a two-year extension of the maturity of the loan from Russia, which will be paid back in 2018, and a decline in interest from 4.5% to 2.5 %.

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News and Review of European Economic Zone

 

ECB's Coure: ECB Ready To Cut Interest Rates Again

Monday, May 6, 2013

 

After the ECB's decision last Thursday to cut its benchmark rate to 0.25% to 0.5%. Executive board member Benoit Coure said over the weekend that further reductions are possible, if the outlook for the euro zone economy worsens.

 

In an interview on French radio station France Inter are conducted on Saturday, Coeure convinced that the ECB is ready to cut interest rates further going forward. "We will cut interest rates again if the latest indicators confirm the bad situation," he said.

 

The ECB executive board member urged the government to join the euro zone in order to boost growth in Europe, continuing at the same time in an attempt to reduce the deficit. He stressed that stimulates the growth does not mean the excessive spending. "Creating more debt will not solve the problem of growth in Europe," he said.

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News and Review of European Economic Zone

 

Keep Euro Zone Retail Sales Slows

Monday, May 6, 2013

 

Euro zone retail sales recorded a slight decline in March, indicating that weak consumer demand continues to hamper the economic recovery of the 17-nation bloc. Based on the Eurostat report, retail sales fell 0.1% in April following a 0.2% decline in March.

 

While the annual rate, retail sales fell 2.4% last month. The decline was sharper than the 1.7% decline recorded in March and is the weakest result since the end of 2012.

 

Slowdown in consumer spending occurred as companies reduced investment and implementation of austerity policies by most governments in the Euro zone. Until the end of 2012 Euro bloc's economy has shrunk recorded during 5 consecutive quarters, while official data this month is also not expected to show growth in the first 3 months of 2013.

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News and Review of European Economic Zone

 

Draghi Affirms readiness of the ECB to Act If Necessary

Tuesday, May 7, 2013

 

European Central Bank President Mario Draghi on Monday reiterated the central bank's readiness to take further action to support the euro zone economy if necessary.

 

"We will monitor all data in the Euro area the next few weeks, and if necessary we are ready to take further action," said Draghi, in a speech at the LUISS University, Rome.

 

The speech became the first public appearance Draghi since the press conference after the ECB lowered its key interest rate to a record low of 0.50% last week.

 

Draghi also said that if the ECB will not rule discourse cuts deposit rate to below 0%, a move that would effectively impose costs on lenders who park their funds at the central bank. Until now Euro zone banks have recorded more than € 100 billion in excess liquidity reserves stored in the ECB's deposit facility, and looks still tend to be reluctant to lend their excess liquidity to other banks or clients.

[mynameisandhy]

News and Review of European Economic Zone (Germany)

 

German Manufacturing Orders Rise In March

Tuesday, May 7, 2013

 

German manufacturing orders rose in March as rising demand from the euro zone, according to Economy Ministry data released on Tuesday. The increase indicates that economic activity has begun to show recovery after slowing in the last winter.

 

German manufacturing orders grew 2.2% in March from the previous month, that nullifies expectations of a 0.5% decline economists.

 

"German industry is gradually coming out of the weakening phase following the increase in demand for the production of goods and capital goods signaled a brighter business outlook," according to the German Economics Ministry statement.

 

Demand for German manufactured goods showed solid growth in March. Recorded overseas orders increased 2.7%, driven by a 4.2% surge in demand from the Euro zone. Domestic orders also rose 1.8% from February levels. Economists forecast a gradual recovery will also soon be seen in the investment sector so far this year, amid the improving financial condition.

[mynameisandhy]

News and Review of European Economic Zone (France)

 

French Industrial Production Down

Tuesday, May 7, 2013

 

Vigorous implementation of austerity policies and the emergence of uncertainty over the global economic outlook seems to successfully undermined the performance of the French industrial sector. It can be seen from the French industrial production fell 0.9% for the month of March; worse than the estimated 0.2% decline and previous publications which increased 0.8%. With the condition of weak industrial sector then this can worsen the performance of the largest economies in the euro-zone 2 is. There are fears France may slip into recession follow the lead of other euro zone members.

 

The French government has signaled a desire to focus more on pro-growth policies that will help the performance of the economy. However, it should also be able to convince the French fiscal discipline remains a concern if you want to avoid as victim-euro zone debt crisis. Other data released today also shows the French government's budget deficit increased from € 27.1 billion to € 31 billion.

[mynameisandhy]

News and Review of European Economic Zone (Germany)

 

German Industrial Output Exceeds Expectations

Wednesday, May 8, 2013

 

German industrial productivity surpassed expectations in March, which indicates if growth in Europe's largest economy began to accelerate, according to a data released by the Ministry of Economic Affairs on Wednesday.

 

Industrial output recorded an increase for the 2nd month in a row in March to grow 1.2% from February, which undermines expectations of a 0.1% decline economists. Previous month's data was also revised up slightly to 0.6% of the initial publication of 0.5%.

 

Positive shock to the economy is coming after solid data on the previous day, where manufacturing orders data released in March was also stronger than expected. These data have eased concerns among many who previously predicted Germany would be difficult to rise from kerterpurukan last winter.

 

"The improvement in manufacturing demand conditions and rising construction activity should be able to give a positive impetus to the industrial sector over the coming months," German Economy Ministry said in a statement. "The data today (Wednesday) is also in line with the expectation that growth will re-gain momentum entering summer, fueled by an increase in capital investment to increase."

[mynameisandhy]

News and Review of European Economic Zone

 

French Finance Minister: Germany should Flexible, Not Just Discipline

Wednesday, May 8, 2013

 

French Finance Minister called on Germany on Tuesday to be flexible and respect the diversity of Europe and not just focus on rules and discipline, in a comment that indicates the difference between the two largest countries in the euro zone on how to tackle the crisis.

 

Previous Germany calls for countries to carry out the program eurozone austerity budget (austerity) with more stringent. However, demand for Germany's protests by the French.

 

"It is true that Germany is traditionally very attached to the rules and discipline, which is where it is exactly what we want, but at the same time we must be able to be flexible, understanding and respect for our diversity."

 

He added that Schaeuble, who sat beside her, "probably will not spontaneously to advise me to get an extension" of the French deficit targets of the European Commission, but the German minister has stated in the statement kepahamannya Pierre Moscovici.

 

Last week, the European Commission approved the extension for two years for France to meet its budget deficit target of below three percent of its GDP.

 

Unlike Germany, whose economy is relatively good and the unemployment rate is very low, the French unemployment rate is seen rising toward record highs.

[mynameisandhy]

News and Review of European Economic Zone (Germany)

 

German States Want Permanent European Banking

Wednesday, May 8, 2013

 

German finance minister, Wolfgang Schauble, hinted at a more friendly attitude toward the European banking union. Schauble wants coordination of government policies to cover banking faster than the EU constitutional change embodied by banking union. "States banking is one of the projects that get top priority and we also want this to be realized soon," said Schaeuble. Comments were more friendly than previous statements that want changes to the constitution as part of efforts to create a banking union.

 

Informants Reuters Schaeuble said the ideal scenario is to get a deal before the start of the banking resolution in the summer parliamentary recess. This is similar to French Finance Minister's comments that the EU wants to achieve positive progress on banking union at the end of June. Banking union is part of Europe's efforts to tackle the euro zone debt crisis.

 

Meanwhile, the euro posted a slim gain in Asian session. EUR / USD is now trading 1.3090; trying to stay away from daily lows 1.3070

[mynameisandhy]

News and Review of European Economic Zone (Germany)

 

Germany Oppose Idea Purchasing ABS

Monday, May 13, 2013

 

German finance minister, Wolfgang Schaeuble, signaled rejection of the idea of ​​the ECB to buy the asset-based financial instruments (ABS), Spiegel magazine reported. Germany's leading weekly media point out that Schaeuble stated that the idea was tantamount to finance the government's budget and would be contrary to the constitution of the European Union. ABS is quite controversial purchase plan for Germany because of concerns such instruments can be dangerous if the assets pledged as collateral (such as mortgages) had failed to pay.

 

German daily Die Welt wrote that the majority had ECB council member seems to be keen to make a purchase ABS program. At the May meeting, the ECB has established a working unit with the European Investment Bank (EIB) to assess efforts to expedite the flow of credit to small and medium enterprises (SMEs). Such efforts may include promoting market-based ABS SME loans. With the ABS then the bank may reduce the credit risk so as to give more credit again so it can also encourage growth of the economy.

 

Meanwhile, the euro fell slightly in early Asian session. EUR / USD is now trading 1.2965; weaker than Friday's closing level of 1.2983

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News and Review of European Economic Zone (Poertugal)

 

Portugal Optimistic Get Next Bailout Funds Disbursement

Monday, May 13, 2013

 

Portugal government may acquire optimistic disbursement next bailout after the EU and IMF bailout program assessment completed. The assessment had experienced problems after the Constitutional Court (MK) partially cancel the austerity policies implemented by Lisbon. However, Lisbon has made other plans that can compensate for the Court's decision in order to bring the ratio of budget deficit targets.

 

Portugal's finance minister, Vitor Gaspar, will give the final presentation at the eurogroup meeting that starts today in Brussels. By providing a credible deficit-cutting plan, Portugal is also hoping to get an extension on debt maturity. Portugal still slumped in the recession and austerity measures started getting opposition from the public. However, investors did not seem so concerned with Portugal borrowing costs when seen from the 10-year government bonds is now at its lowest level since 2010.

[mynameisandhy]

News and Review of European Economic Zone (Greece)

 

Greece suffered in the Third Year Post Bail Out

Monday, May 13, 2013

 

It's been three years since the Greek bailout phase I utilize worth 110 billion euros from the European Union and the International Monetary Fund (IMF). As compensation, the state was forced to tighten the spending belt so that the unemployment rate soared. Economy increasingly paralyzed and made ​​6 of 10 people age have no livelihood.

 

After 6 years stuck in a phase of recession, Greece's economy is predicted to grow again in 2014. This country does not have a right to access international credit markets as usual, but the performance of the banking sector began to improve and it is believed will turn profitable in the near future. One of the biggest bank in Greece, Piraeus, even boasted to raise fresh funds from global investors to shy away from the threat of nationalization. Recovery in the banking sector could be a weapon Athens to withdraw investments and business interests, not only of its own citizens, but also from foreign investors over the last 4 years are allergic to news of financial crisis.

 

Budget cuts is so painful because it certainly erodes the value of a country's economy and driving up unemployment. Absorption also increase the burden of the bailout fund future budgets as cheap as any one loan, the repayment will be difficult without an equal offset income. Greece is undergoing a phase of major slump in the fourth year since its first bailout disbursement. Consequences that must be endured in order to wipe out its deficit bloated budget.

 

Here is a comparison of key economic indicators Greece between 2009 and 2013 (source: CNN). All components of productivity and just looks minus the deficit indicators show progress. Although bitter, Greece can expect conditions like this is the beginning of something better in the future.

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News and Review of European Economic Zone (UK)

 

Pound Still Bleak in a release Before Inflation Report

Tuesday, May 14, 2013

 

The pound weakened for a fourth day against the dollar on speculation that investors are starting to reduce their holdings in British currency before the Bank of England released the latest inflation forecast tomorrow.

 

Sterling hit its lowest level in two weeks against the greenback even after an industry report showed house prices in the UK rose to its highest level since June 2010. The pound fell more than 2 percent against the dollar since climbed to its highest level in three months in the area of ​​$ 1.5606 on May 1.

 

"Ahead of tomorrow's inflation report, you see some people starting to release some long positions on cable," said Peter Kinsella, currency strategist at Commerzbank AG in London, referring to the stakes that they begin to end the pound will strengthen against the dollar. "People see price movements are seen to fail to penetrate the $ 1.56 area over the last two weeks, it is used as a sign that the increase in cable here is quite limited.

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News and Review of European Economic Zone

 

ECB's Visco: Could Only Deposit Rate Below Zero

Tuesday, May 14, 2013

 

One member of the European Central Bank's governing council, Ignazio Visco told CNBC that the central bank is "technically" ready to introduce negative interest rates which is effectively seen that banks have to pay if you have deposits, but the bank is also aware that such measures could potentially increase "unwanted consequences" such as the blurring of the depositors.

 

Visco, who was one of the Italian economist and currently serves as governor of the Italian central bank, said that the bank "is technically ready to go in the direction of negative interest rates" but the decision occurs depends on whether the economy needs help going forward or not.

 

"We in the council agree that we should look carefully and in this case we may be able to reduce the interest rate (deposit). We think that it is effective, and I also think so. Technically, we have a complete and ready ammunition intervene on the matter. Maybe there will be consequences that are not in want, we know that we may have to work on it, and we know how to do it, "said Visco told CNBC on the sidelines of the G-7 meeting in London this week.

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News and Review of European Economic Zone (France)

 

France Must Accelerate Reforms

Tuesday, May 14, 2013

 

President-euro zone, Jeroen Dijsselbloem, urged France to accelerate the implementation of the reform program after getting an extra 2 years to achieve budget deficit target. "France should accelerate the reform program. Accelerating the implementation of the reform is part of a supplemental agreement deficit target time," said Dijsselbloem when interviewed by CNBC.

 

Hollande administration is quite slow to run and labor reforms despite strukturan have raised property taxes for government funding shortfalls. France seems to be difficult to make drastic reforms in government popularity Hollande is currently at a low level since he was elected as President of France. The high unemployment rate is the number of unemployed reached 3.2 million people will also make it difficult for the government to carry out reforms in the labor sector.

 

Meanwhile, the euro fell slightly in early Asian session. EUR / USD is now trading 1.2968; weaker than Friday's closing level of 1.2983

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News and Review of European Economic Zone (Greece)

 

Fitch Ratings Upgrades Greek Debt

Wednesday, May 15, 2013

 

Fitch Ratings on Tuesday raised its rating on Greece's long-term debt by one level as a reflection of the improving economy of the country. The upgrade can not be separated from the government's success in reducing debt and reducing its fiscal targets, which have helped indicator of economic sentiment rose to the highest 3-year and will reduce the risk of a Greek exit from the euro bloc.

 

Fitch raised its rating on Greek debt to 'B-' from previous 'CCC' with a stable outlook, in line with the reduced risk of default. The stable outlook indicates if the risk increases and decreases relative rating has been more balanced than before.

 

Fitch also noted that structural reforms have encouraged more developed financial system stable, with major advances have also been seen in labor market policy. Although successfully demonstrated progress in reducing the deficit and the 'internal devaluation', Fitch still doubt the capacity of Greece to continue its recovery.

[mynameisandhy]

News and Review of European Economic Zone

 

Eurozone Recession Continues Until Q1 in 2013

Wednesday, May 15, 2013

 

The euro zone economy to contract for 6 consecutive quarters, as a modest recovery in Germany failed to offset the recession in France and Italy.

 

Based on initial estimates, the Euro bloc's GDP shrank 0.2% in the first 3 months of this year from the last quarter of 2012, the Eurostat report showed. Phase decrease this time going much longer than in the recession of 2008-2009, although not as severe contraction that occurred 4 years ago.

 

While the survey results of business institutions in April indicates if the 17-nation bloc's economy was likely to contract in the current quarter. Euro zone GDP last able to expand in the 3rd quarter of 2011, whereby when the German economy has recorded a growth of about 3% with the recession only occurred in some small countries such as Greece, Ireland and Portugal.

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News and Review of European Economic Zone (Germany)

 

German Economic Growth Below Forecast

Wednesday, May 15, 2013

 

The state of Germany's economy first quarter were below economists' forecasts. Gross domestic product rose 0.1% in the first quarter of 2013, after tutun 0.7% in the fourth quarter of 2012. Economists expected an increase of 0.3% in the first quarter.

 

Bundesbank said German economic recovery may be delayed by a very long winter, which hamper construction activity and business confidence. Lower German gross domestic product reflects the euro zone recession is almost certainly still stuck. Poduk likely euro zone GDP down 0.1% in the first quarter, after declining 0.6% in the final quarter of 2012.

 

Statistics indicate economic growth in Germany in the first quarter was almost entirely driven by household spending, while investment declined, and trade does not contribute. German Bundesbank predicts economic growth of 0.4% this year and 1.9% in 2014, with an average inflation rate of 1.5% this year and 1.6% in 2014. While the ECB predicted the eurozone economy would grow 0.5% this year and 1% in 2014, with a 1.3% inflation rate in 2014.

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News and Review of European Economic Zone

 

Eurozone Trade Surplus Record Successfully Printing

Thursday, May 16, 2013

 

The 17-nation euro currency users successfully recorded the biggest trade surplus since counting began in 1999, triggered by a sharp rise in exports and decline in imports. Strong export performance has brought hope that the euro zone will soon return to the growth path after a phase of contraction the longest post World War II. It also confirms that the decline in output in the first quarter due to the still very weak domestic demand.

 

Official EU statistics agency, Eurostat, said exports recorded a growth of 2.8% as imports declined 1.0%. Which gives a trade surplus of € 18.7 billion in March, up from a surplus of € 12.7 billion recorded in February.

 

Surplus that occurred during the first quarter of this year shows if exports have contributed significantly to the growth in that period.

 

While Eurostat report on Wednesday showed that the euro zone economy contracted by 0.2% during the first 3 months of 2013, as the weakening of domestic demand in the beginning of the year.

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News and Review of European Economic Zone (UK)

 

King: UK recovery Being in Front of Eyes

Thursday, May 16, 2013

 

Bank of England Governor, Mervyn King menyakan that the UK recovery is currently "in plain sight" as he presented the final estimates with the improved outlook for economic growth in the UK.

 

In the central bank's quarterly inflation report and the last King of leadership before he retired in July, officials predicted that growth would likely rise to 0.5 percent in the quarter from 0.3 percent in the first three months of this year. They also raise their estimates on the projections of the economic outlook. On inflation, the central bank saw it would be at its peak at the level of 3.1 percent in the third quarter of this year, lower than expected in February.

 

"The most important thing at this time is a welcome change in the economic outlook," King said when he presented his press conference at the central bank's 89th in London. "This is not a recession special, and there will be a special recovery as well.

 

King said that the bank is more optimistic on the outlook for economic growth and inflation in the estimate will be the first time since the financial crisis better. The report is to understand the decision of the Monetary Policy Committee that states do not change the stimulus program to remain at number 375 billion pounds at a meeting last week.