The European Commission has sharply raised its economic forecasts for the coming two years, as an accelerating vaccination campaign helps the eurozone recover from the historic blow delivered by the pandemic.
The euro area will expand by 4.3 per cent this year and 4.4 per cent in 2022, Brussels said on Wednesday, compared with previous forecasts for 3.8 per cent growth in both years. As a result, all member states are now expected to regain their pre-crisis output levels by the end of next year, following a historic 6.6 per cent slump in 2020.
The stronger outlook was driven by the rising vaccination rates and the prospect of lockdowns easing across the region, as well as improving export demand driven by a global rebound. Brussels for the first time fully factored in the impact of the €800bn Next Generation EU economic relaunch package, which is expected to begin paying out in the second half of the year.
“The shadow of Covid-19 is beginning to lift from Europe’s economy,” said Paolo Gentiloni, the EU’s economics commissioner. “After a weak start to the year, we project strong growth in both 2021 and 2022. Unprecedented fiscal support has been — and remains — essential in helping Europe’s workers and companies to weather the storm.”
Read more at:
European Commission upgrades economic forecasts | Financial Times
The Future Is Here Today
Where Business, Nature and Leisure Provide An Ideal Setting For Living
Showing posts with label EU Economy. Show all posts
Showing posts with label EU Economy. Show all posts
January 9, 2020
EU Green Transition: EU's green transition 'will have slightly positive economic effect'
EU's move towards a carbon-neutral economy to tackle climate change
will have a "slightly positive" economic effect, it's been claimed.
Valdis Dombrovskis, the EU's economy commissioner, speaking to Euronews in Berlin, admitted the green transition would have winners and losers but that it should be done in a "socially acceptable way".
EU countries reached a deal last month on making the bloc climate neutral by 2050.
Read more: The Brief: EU's green transition 'will have slightly positive economic effect' | Euronews
Valdis Dombrovskis, the EU's economy commissioner, speaking to Euronews in Berlin, admitted the green transition would have winners and losers but that it should be done in a "socially acceptable way".
EU countries reached a deal last month on making the bloc climate neutral by 2050.
Read more: The Brief: EU's green transition 'will have slightly positive economic effect' | Euronews
February 3, 2019
EU Economy: Netherlands' Central Bank President Knot: "European economy 'very much okay'
 |
| Netherlands Parliament and offices of the PM in the Hague |
Speaking on Dutch television last Sunday, Knot, who also sits on the European Central Bank’s governing council, said subdued inflation was troubling, but it was “premature” to talk about a possible recession.
European Central Bank President Mario Draghi acknowledged on Thursday that economic growth in the euro zone was likely to be weaker than earlier expected due to the fall-out from factors ranging from China’s slowdown to Brexit.
Knot, usually viewed as one of the more hawkish members of the governing board, said the bloc would see “a few quarters of slightly lower growth, and that’s mostly due to foreign trade.”
Internal demand remained “very good”, he said.
A Reuters report by by Toby Sterling; editing by John Stonestreet
May 6, 2018
EU Economy: Spring 2018 Economic Forecast: Expansion to continue amid new risks
Growth rates for the EU and the euro area beat expectations in 2017 to
reach a 10-year high at 2.4%. Growth is set to remain strong in 2018 and
ease only slightly in 2019, with growth of 2.3% and 2.0% respectively
in both the EU and the euro area.Private consumption remains strong, while exports and investment have increased. Unemployment continues to fall and is now around pre-crisis levels. However, the economy is more exposed to external risk factors, which have strengthened and become more negative.
Robust growth is facilitating a further reduction in government deficit and debt levels and an improvement in labour market conditions. The aggregate deficit for the euro area is now less than 1% of GDP and is forecast to fall under 3% in all euro area Member States this year.
Read more: European Commission - PRESS RELEASES - Press release - Spring 2018 Economic Forecast: Expansion to continue amid new risks
February 26, 2017
EU Economy: Every one of the EU's 28 member economies is growing simultaneously for the first time since 2007
Quartz reports that the European Union is facing its biggest crisis since… well, since
its last big crisis. The perpetually problematic union is threatening to
come undone, with Britain in the process of quitting the bloc and
numerous populist movements elsewhere also threatening to sever ties.
But economically speaking, the bloc is performing better than it has in a long while. For the first time since 2007, all 28 of the union’s member economies are growing at the same time, on an annual basis.
Inflation-adjusted GDP in the EU will rise 1.8% this year and next, according to the European Commission’s latest projections. This is expected to push unemployment across the region to its lowest rate since 2009. For its part, GDP in the euro zone has risen for 15 consecutive quarters.
This is not to say that Europe’s economy is thriving, which is readily apparent by how successfully populist politicians have been blaming Brussels for their countries’ apparent financial malaise.
The European Commission warns that the risks to its forecasts are “exceptionally large,” thanks to the unclear intentions of US president Donald Trump, high-stakes elections across Europe this year, and the ongoing Brexit negotiations.
If Trump follows through on pledges to spend big on infrastructure, it could provide a boost to the EU’s export-oriented members. But if he doubles down on his “America First” policy, it could harm transatlantic trade. Meanwhile, a messy Brexit, tighter monetary policy from the US Federal Reserve, and a shaky Chinese economy could all derail the European economy’s slow but steady recovery.
Pierre Moscovici, the European commissioner for economic and financial affairs, warned that the benefits of growth must be shared more widely—both between and within EU countries—for it to be appreciated by citizens. “With uncertainty at such high levels, it’s more important than ever that we use all policy tools to support growth,” he said. “Above all, we must ensure that its benefits are felt in all parts of the euro area and all segments of society.”
EU-Digest
But economically speaking, the bloc is performing better than it has in a long while. For the first time since 2007, all 28 of the union’s member economies are growing at the same time, on an annual basis.
Inflation-adjusted GDP in the EU will rise 1.8% this year and next, according to the European Commission’s latest projections. This is expected to push unemployment across the region to its lowest rate since 2009. For its part, GDP in the euro zone has risen for 15 consecutive quarters.
This is not to say that Europe’s economy is thriving, which is readily apparent by how successfully populist politicians have been blaming Brussels for their countries’ apparent financial malaise.
The European Commission warns that the risks to its forecasts are “exceptionally large,” thanks to the unclear intentions of US president Donald Trump, high-stakes elections across Europe this year, and the ongoing Brexit negotiations.
If Trump follows through on pledges to spend big on infrastructure, it could provide a boost to the EU’s export-oriented members. But if he doubles down on his “America First” policy, it could harm transatlantic trade. Meanwhile, a messy Brexit, tighter monetary policy from the US Federal Reserve, and a shaky Chinese economy could all derail the European economy’s slow but steady recovery.
Pierre Moscovici, the European commissioner for economic and financial affairs, warned that the benefits of growth must be shared more widely—both between and within EU countries—for it to be appreciated by citizens. “With uncertainty at such high levels, it’s more important than ever that we use all policy tools to support growth,” he said. “Above all, we must ensure that its benefits are felt in all parts of the euro area and all segments of society.”
EU-Digest
December 30, 2016
EU Economy: What will the European economy look like in 2017? - by Lizzie O'Leary and Stephen Beard
There were three big electoral events affecting the global economy in the second half of 2016.
The biggest event by far, of course, occurred in the U.S. on November 8th. The other two were in Europe and are set to have repercussions well into 2017: the vote for Brexit in the U.K. and the "no" vote in the Italian referendum.
Marketplace European Bureau Chief Stephen Beard joined Lizzie O’Leary to take a look at Europe moving into the New Year.
Read more: What will the European economy look like in 2017?
The biggest event by far, of course, occurred in the U.S. on November 8th. The other two were in Europe and are set to have repercussions well into 2017: the vote for Brexit in the U.K. and the "no" vote in the Italian referendum.
Marketplace European Bureau Chief Stephen Beard joined Lizzie O’Leary to take a look at Europe moving into the New Year.
Read more: What will the European economy look like in 2017?
March 21, 2016
European Economy: The ECB goes Rogue - by Sylvester Eijffinger
The motivation behind the recent policy moves is clear: ECB President Mario Draghi is committed to curbing deflation, a serious threat to economic growth. After all, in a deflationary environment, it is more difficult to repay debt, so companies will tend to postpone investment. Recent Eurostat figures, which show that the annual consumer-price index fell by 0.2% last month, heighten concerns.
But while what is happening is technically deflation – that is, sustained price-level decreases that may be reflected in employment or other contracts – it is not structural deflation. Instead, it largely reflects low oil prices, which have fallen by more than 70% since June 2014. In fact, if we discard energy and food prices, the eurozone is in a situation of structural low inflation. That, together with the oil price, should actually benefit the economy, as it gives a boost to consumption and investment.
So why has the ECB’s massive quantitative easing (QE) program, which has put plenty of money into circulation, failed to stimulate demand for goods and services? One problem is that banks are reluctant to pass the negative deposit rate through to the savings rate, for fear of losing depositors. They are thus forced to increase further their margins on mortgages and loans to small and medium-size enterprises. As a result, contrary to the goal of QE, they are extending less credit to households and companies.
Meanwhile, banks, households, and small and medium-size enterprises are still excessively leveraged, and need time to pay down their debts. While this might seem to suggest that the ECB’s focus on boosting inflation is the right one, the reality is that a straightforward expansion of the bond-purchase program ignores the underlying structural issues afflicting the eurozone’s weaker economies. Worse, by enabling those economies to borrow cheaply, QE permits them to avoid implementing difficult structural reforms.
Draghi and the doves on the ECB Governing Council – namely, the presidents of southern European countries’ central banks – seem to think that they can get a car moving simply by giving it more gas, even if its clutch is broken. The hawks in the ECB Governing Council, such as Bundesbank President Jens Weidmann and De Nederlandsche Bank President Klaas Knot, see the folly in this approach, but they are in the minority.
The ECB goes Rogue - The New Times | Rwanda
January 14, 2016
EU Economy: To Avoid A 2016 Crash, The Major Powers Need To Pull In The Same Direction - by Anton Muscatelli
It looks already as if 2016 will be a pivotal year for the world
economy. RBS has advised investors to “sell everything except for
high-quality bonds” as turmoil has returned to stock markets. The Dow
Jones and S&Pindices have fallen by more than 6% since the start of
the year, which is the worst ever yearly start. There is a similar story
in other major markets, with the FTSE leading companies losing some
£72bn of value in the same period.
These declines have come on the back of a major shock to the Chinese stock market. China’s stock exchange is very different from that of other major economies, as Chinese companies don’t rely on it to fund themselves to the same extent, using debt instead. All the same, the repeated suspensions of trading as the Chinese circuit-breakers came into operation (as they do when share prices fall too sharply) spooked investors around the world.
On top of that we are seeing commodity prices continuing to retreat. Oil prices have dropped towards $30 per barrel and don’t look likely to increase soon, with Iranian and Saudi oil production continuing to sustain supply. We are seeing many emerging economies dependent on petroleum revenues suffering (Brazil, Russia), and there is speculation that many oil producers (and perhaps even Saudi Arabia) are having to abandon their currencies’ link with the US dollar.
It would be good if, in 2016, we began to see greater macroeconomic cooperation between the G20. In an ideal world, the G20 economies would seek to share out the effort of sustaining world demand through targeted public investments designed to restore business and consumer confidence. We saw this very briefly immediately after the financial crisis. Since 2009 there have been no attempts to act collectively on fiscal policy. Those days seem unfortunately very distant now.
Read more: To Avoid A 2016 Crash, The Major Powers Need To Pull In The Same Direction
These declines have come on the back of a major shock to the Chinese stock market. China’s stock exchange is very different from that of other major economies, as Chinese companies don’t rely on it to fund themselves to the same extent, using debt instead. All the same, the repeated suspensions of trading as the Chinese circuit-breakers came into operation (as they do when share prices fall too sharply) spooked investors around the world.
On top of that we are seeing commodity prices continuing to retreat. Oil prices have dropped towards $30 per barrel and don’t look likely to increase soon, with Iranian and Saudi oil production continuing to sustain supply. We are seeing many emerging economies dependent on petroleum revenues suffering (Brazil, Russia), and there is speculation that many oil producers (and perhaps even Saudi Arabia) are having to abandon their currencies’ link with the US dollar.
It would be good if, in 2016, we began to see greater macroeconomic cooperation between the G20. In an ideal world, the G20 economies would seek to share out the effort of sustaining world demand through targeted public investments designed to restore business and consumer confidence. We saw this very briefly immediately after the financial crisis. Since 2009 there have been no attempts to act collectively on fiscal policy. Those days seem unfortunately very distant now.
Read more: To Avoid A 2016 Crash, The Major Powers Need To Pull In The Same Direction
May 19, 2015
EU Economy: "Hanky-Panky" capitalism certainly is not an example that should be followed within the EU - by RM
Smart long term thinking when it comes to privatization unfortunately is not one of the US's strong points. It has been proven over and over that without government regulations, greed usually takes over immediately when corporations start running privatized companies.
We don't need to make any bones about it, but today the direct result of this in America has been that 1% of the US population now controls just about all the private wealth there. At the same time corporate cartels regulate and control most of the pricing for goods and services: re the Financial Industry, Banking Industry, Food Industry, Pharmaceutical Industry, Medical Industry, Chemical Industry, Farming Industry, Communications Industry, Airline Industry, Weapons Industry, etc,, etc., This sad state of affairs in turn is supported by a corporate controlled press and worst of all corporate subsidized politicians.
While "privatization" is the magic word for many of these mainly conservative politicians, they tend to speak out of two sides of their mouth when it comes to subsidies.
On the one hand they advocate privatization of government or non-profit run corporations, while on the other hand they support subsidies to their favorite industries.
In the United States, credible estimates of annual fossil fuel subsidies range from $10 billion to 52 billion annually. Yet these figures don’t even include costs borne by taxpayers related to the climate, local environmental, and health impacts of the fossil fuel industry.
As of July 2014, Oil Change International estimates U.S. fossil fuel subsidies at $37.5 billion annually, including $21 billion in production and exploration subsidies.
Looking at the picture globally, another shocking revelation finds that the $5.3 trillion global fossil fuel subsidy estimate for 2015 is greater than the total health spending of all the world’s governments.
This can only be qualified as "hanky-panky" capitalism and certainly is not an example that should be followed by the EU.
EU-Digest
January 24, 2015
QE ECB: Germany wary of ECB quantitative easing, World Bank warns reforms needed as well
European stock markets
were boosted by the European Central Bank’s bond-buying scheme with
several share indexes hitting seven-year highs on Thursday.
Banks and car makers were among the best-performer companies as they are likely to benefit from cheap lending rates and a weaker euro.
But the head of the World Bank, Jim Yong Kim, told euronews that on top of the bond purchases, eurozone governments also need to do more to reform their economies.
Referring to the bond buying he said: “This is a tool and it should be used, because the potential to have a self-fulfilling and continuous deflationary cycle was very real. The other half of this is that there’s still not enough to really solve the problems. You know, the countries that are in the most trouble, have to move forward with their reform agenda.
What an opportunity! We have historically low oil prices and now we have a quantitative easing. This is now the time to really jump in.”
Germany was the least enthusiastic with economists, politicians and business leaders there warning this is taking the euro system deeper into unchartered territory.
Hans-Werner Sinn, the head of the influential Ifo economic think-tank, called it “illegal, unsolid state financing by printing money”.
Note EU-Digest: Mario Draghi the ECB Chairman who used to be a Goldman Sachs employee is going on a slippery slope with QE financing - Given Draghi's US related banking experience and link with the Goldman Sachs Financial corporatio - whose financial history is not one of sound and honest practices puts up a lot of red flags.
Read more: Germany wary of ECB quantitative easing, World Bank warns reforms needed as well | euronews, economy
Banks and car makers were among the best-performer companies as they are likely to benefit from cheap lending rates and a weaker euro.
But the head of the World Bank, Jim Yong Kim, told euronews that on top of the bond purchases, eurozone governments also need to do more to reform their economies.
Referring to the bond buying he said: “This is a tool and it should be used, because the potential to have a self-fulfilling and continuous deflationary cycle was very real. The other half of this is that there’s still not enough to really solve the problems. You know, the countries that are in the most trouble, have to move forward with their reform agenda.
What an opportunity! We have historically low oil prices and now we have a quantitative easing. This is now the time to really jump in.”
Germany was the least enthusiastic with economists, politicians and business leaders there warning this is taking the euro system deeper into unchartered territory.
Hans-Werner Sinn, the head of the influential Ifo economic think-tank, called it “illegal, unsolid state financing by printing money”.
Note EU-Digest: Mario Draghi the ECB Chairman who used to be a Goldman Sachs employee is going on a slippery slope with QE financing - Given Draghi's US related banking experience and link with the Goldman Sachs Financial corporatio - whose financial history is not one of sound and honest practices puts up a lot of red flags.
Read more: Germany wary of ECB quantitative easing, World Bank warns reforms needed as well | euronews, economy
December 9, 2014
EU-Economy: EU selects projects worth 1.3 trillion-euro to revive economy and jobs
The European Union has drawn up a wish list of almost 2,000
projects worth 1.3 trillion euros ($1.59 trillion) for possible
inclusion in an investment plan to revive growth and jobs without adding
to countries' debts.
Investment has been a casualty of the financial crisis in Europe, tumbling around 20 percent in the euro zone since 2008, according to the European Central Bank.
Following a call by European Commission President Jean-Claude Juncker, EU governments have submitted projects ranging from a new airport terminal in Helsinki to flood defenses in Britain, according to a document seen by Reuters.
"Almost 2,000 projects were identified with a total investment cost of 1,300 billion euros of which 500 billion are to be realized within the next three years,'' said the document, to be discussed by EU finance ministers on Tuesday.
Read more: EU selects projects worth 1.3 trillion-euro to revive economy and jobs
Investment has been a casualty of the financial crisis in Europe, tumbling around 20 percent in the euro zone since 2008, according to the European Central Bank.
Following a call by European Commission President Jean-Claude Juncker, EU governments have submitted projects ranging from a new airport terminal in Helsinki to flood defenses in Britain, according to a document seen by Reuters.
"Almost 2,000 projects were identified with a total investment cost of 1,300 billion euros of which 500 billion are to be realized within the next three years,'' said the document, to be discussed by EU finance ministers on Tuesday.
Read more: EU selects projects worth 1.3 trillion-euro to revive economy and jobs
November 14, 2014
Global Economy: European economic figures far more accurate than those from the US - by RM
 |
| Transparency key to success Atlantic Alliance |
One of these is the fact that it was actually the US which caused the 2007/2008 financial crash but this has been completely swept under the mat by the US.
Keep in mind though that all the media outlets in the US, except very few, which are "not for profit organizations" (who mainly get their income from public/private donations and grants) are mostly profit based multi-national corporations. This should immediately raise a red flag as to the impartiality and balance of the news/financial reports they release.
Possibly, this is also the reason that at the same time there is this constant barrage of attacks coming from those same US media circles bashing and critizicing the EU/ECB for not adopting the US QE financial policies (printing more money and pumping this" monopoly money" into the marketplace) in order to get the EU economy going again.
As to the US QE policies, many economists believe this could eventually be a recipe for future US economic disaster.
Also, looking at some of the official figures put out by the US Government and reading between the lines, the attentive reader will quickly find a lot of nebulous statistics on a variety of issues and items, including employment, trade, debt, infrastructure, military and security expenditures.
In this volatile scenario Wall Street is a special "Chapter" by itself. Some critics call Wall Street a financial "fairyland" where words and phrases as versatility, headwinds, optimize, boldness, performance, choices, transparency, bubbles, wealth, growth, state of the art, profitable, opportunity are used in different ways as shares go up and down and traders turn out the big winners in dividing up the spoils.
Obviously without any doubt there are also "forces" in Europe ( Britain) who are following and would love to have the EU adapt this "flawed" US financial model.
Fortunately, and maybe unfortunately for some, the EU is a Union of 28 countries with 28 central banks. Of these 28 countries 18 belong to the so called European Economic Zone (Eurozone) that have adopted the euro (€) as their common currency.and sole legal tender.
The ECB is the central bank for the euro and administers monetary policy for the whole Eurozone.
Any report or statistic on or about the state of the EU economy issued by the ECB is scrutinized very carefully by all 18 members of the ECB before they become public.Canada which is a Federated country also applies similar rules.
Official EU financial reports and statement are therefore without any doubt far more accurate and reliable than those coming from US government agencies.
Isn't it time for the EU to get to the point with our friends across the other side of the pond on this issue? And what better venue to do it than during the ongoing EU-US trade negotiations?
EU-Digest
September 23, 2014
EU Economy: Visco Says ECB May Not Need to Add Stimulus Amid Euro - by Jana Randow Decline
The European Central Bank
may not need to add stimulus measures after steps in the past three
months pushed down the euro, said Governing Council member Ignazio
Visco.
“Inflation expectations have to be back where they were,” Visco said Sept. 20 in an interview in Cairns, Australia, where he attended a meeting of Group of 20 finance chiefs. “This doesn’t mean that there will be a next step. We have been bold enough to reduce interest rates to a level that was unexpected to the market.”
The single currency has dropped about 6 percent since early June, when the ECB introduced a negative interest rate on excess reserves and presented a four-year lending program to fuel credit. Policy makers reduced borrowing costs further earlier this month and committed to buying asset-backed securities and covered bonds to boost the ECB’s balance sheet by as much as 1 trillion euros ($1.3 trillion).
Read more: Visco Says ECB May Not Need to Add Stimulus Amid Euro Decline - Bloomberg
“Inflation expectations have to be back where they were,” Visco said Sept. 20 in an interview in Cairns, Australia, where he attended a meeting of Group of 20 finance chiefs. “This doesn’t mean that there will be a next step. We have been bold enough to reduce interest rates to a level that was unexpected to the market.”
The single currency has dropped about 6 percent since early June, when the ECB introduced a negative interest rate on excess reserves and presented a four-year lending program to fuel credit. Policy makers reduced borrowing costs further earlier this month and committed to buying asset-backed securities and covered bonds to boost the ECB’s balance sheet by as much as 1 trillion euros ($1.3 trillion).
Read more: Visco Says ECB May Not Need to Add Stimulus Amid Euro Decline - Bloomberg
August 26, 2014
EU Economy: Europe fears deflation as Ukraine stays centre-stage
The eurozone's growing fears of deflation will be
stirred again on Friday when preliminary consumer price data for August
will be issued with signs that the European Central Bank (ECB) could be
looking at bolder steps to help the region's stagnant economy.
Analyst polled by Reuters forecast the annual inflation rate to slip to 0.3 per cent from 0.4 per cent in July, falling even further below the ECB's target of below but close to two per cent and mired deep in what the bank calls the "danger zone." The ECB cut interest rates in June and promised banks cheap long-term loans starting in September and any new measures before those loans kick in had been considered unlikely.
However, in remarks that opened the door to possible policy action at the bank's next meeting in September, ECB President Mario Draghi said on Friday that the bank is prepared to respond with all its "available" tools should inflation drop further.
Speaking at a global central banking conference in Jackson Hole, Wyoming, Draghi said he is confident that the steps already announced, helped by a weaker euro would boost demand in the ailing economic bloc. But in stronger language than he has used in the past, he stressed the central bank stands ready to do more. "The (ECB's) governing council will acknowledge these (economic) developments and within its mandate will use all the available instruments needed to ensure price stability over the medium term," he said.
The main weapon at the bank's disposal, printing money to buy bonds, known as Quantitative Easing (QE), is still opposed by Germany's Bundes bank which plays down the danger of deflation. In his remarks on Friday, Draghi did not mention the policy specifically, but a growing number of analysts believe it is only a matter of time before the ECB follows the path already trodden by the Federal Reserve and the Bank of England.
"The ECB will ultimately move to QE unless the euro weakens appreciably," said Riccardo Barbieri, chief European economist at Mizuho, adding that, "In the near term stagnation and near-zero inflation in the eurozone are almost a certainty. Developments in Ukraine will continue to be a major focus for markets, with the negative headlines of recent weeks having pushed German bond yields to new lows."
Read more: Europe fears deflation as Ukraine stays centre-stagEU Economy: Europe fears deflation as Ukraine stays centre-stag
Analyst polled by Reuters forecast the annual inflation rate to slip to 0.3 per cent from 0.4 per cent in July, falling even further below the ECB's target of below but close to two per cent and mired deep in what the bank calls the "danger zone." The ECB cut interest rates in June and promised banks cheap long-term loans starting in September and any new measures before those loans kick in had been considered unlikely.
However, in remarks that opened the door to possible policy action at the bank's next meeting in September, ECB President Mario Draghi said on Friday that the bank is prepared to respond with all its "available" tools should inflation drop further.
Speaking at a global central banking conference in Jackson Hole, Wyoming, Draghi said he is confident that the steps already announced, helped by a weaker euro would boost demand in the ailing economic bloc. But in stronger language than he has used in the past, he stressed the central bank stands ready to do more. "The (ECB's) governing council will acknowledge these (economic) developments and within its mandate will use all the available instruments needed to ensure price stability over the medium term," he said.
The main weapon at the bank's disposal, printing money to buy bonds, known as Quantitative Easing (QE), is still opposed by Germany's Bundes bank which plays down the danger of deflation. In his remarks on Friday, Draghi did not mention the policy specifically, but a growing number of analysts believe it is only a matter of time before the ECB follows the path already trodden by the Federal Reserve and the Bank of England.
"The ECB will ultimately move to QE unless the euro weakens appreciably," said Riccardo Barbieri, chief European economist at Mizuho, adding that, "In the near term stagnation and near-zero inflation in the eurozone are almost a certainty. Developments in Ukraine will continue to be a major focus for markets, with the negative headlines of recent weeks having pushed German bond yields to new lows."
Read more: Europe fears deflation as Ukraine stays centre-stagEU Economy: Europe fears deflation as Ukraine stays centre-stag
June 10, 2014
EU-Economy: Quantitative easing: ECB getting closer to US Fed-style stimulus ( Lets hope not) - by David McHugh
The European Central Bank has deployed a raft of aggressive measures
to boost Europe's economy, but stopped short of the one many economists
insist would do the most to help: large-scale purchases of bonds.
That could change sooner rather than later, analysts say, if inflation remains low.
Purchases of bonds using newly created money — called quantitative easing — have been used with some success so far by the U.S. Federal Reserve, the Bank of England and the Bank of Japan. They can reduce market interest rates, making it cheaper for consumers and businesses to borrow, helping growth.
So why not in Europe?
To begin with, the ECB faces technical and practical challenges that other major central banks don't have. It has 18 different government bond markets, raising the question of whose bonds to buy and how many.
Beyond that, creating new money has long faced resistance in Germany, the biggest economy in Europe where central bank stimulus measures are looked upon with suspicion and have a prominent place in public discussions.
But after Thursday's meeting, things could be shifting.
At a press conference on Thursday, ECB President Mario Draghi held the door open to such bond purchases, suggesting Germany has at least softened its outright resistance. If inflation falls further, analysts think the ECB could start quantitative easing.
"Are we finished?" he said after the decision. "The answer is no." The ECB is keen to bring up the inflation rate, which at 0.5 percent is so low it raises fears the eurozone will fall into outright deflation, a crippling downward price spiral.
Note EU-Digest: quantitative easing is the kiss of death for an economy and even though it creates some relief at first it will eventually come and haunt you, as the US is experiencing, but not speaking about.
Read more: FRANKFURT, Germany: ECB getting closer to Fed-style stimulus - Business Breaking News - MiamiHerald.co
That could change sooner rather than later, analysts say, if inflation remains low.
Purchases of bonds using newly created money — called quantitative easing — have been used with some success so far by the U.S. Federal Reserve, the Bank of England and the Bank of Japan. They can reduce market interest rates, making it cheaper for consumers and businesses to borrow, helping growth.
So why not in Europe?
To begin with, the ECB faces technical and practical challenges that other major central banks don't have. It has 18 different government bond markets, raising the question of whose bonds to buy and how many.
Beyond that, creating new money has long faced resistance in Germany, the biggest economy in Europe where central bank stimulus measures are looked upon with suspicion and have a prominent place in public discussions.
But after Thursday's meeting, things could be shifting.
At a press conference on Thursday, ECB President Mario Draghi held the door open to such bond purchases, suggesting Germany has at least softened its outright resistance. If inflation falls further, analysts think the ECB could start quantitative easing.
"Are we finished?" he said after the decision. "The answer is no." The ECB is keen to bring up the inflation rate, which at 0.5 percent is so low it raises fears the eurozone will fall into outright deflation, a crippling downward price spiral.
Note EU-Digest: quantitative easing is the kiss of death for an economy and even though it creates some relief at first it will eventually come and haunt you, as the US is experiencing, but not speaking about.
Read more: FRANKFURT, Germany: ECB getting closer to Fed-style stimulus - Business Breaking News - MiamiHerald.co
February 28, 2014
EU-Economy: George Soros says he's a euro believer, looks to invest in Europe banks
Billionaire investor George Soros, the man made famous for breaking the Bank of England by shorting the pound in 1992, reportedly told a German newspaper over
the weekend that he’s a euro believer. The full article at Der Spiegel
isn’t available without a subscription, so we turned to Reuters for a translation and breakdown.
“I believe in the euro. Therefore my investment team is looking forward to making [sic] a lot of money soon in Europe by, for example, pumping money in banks which urgently need capital,” Soros reportedly said in the interview, adding that the euro zone needs this type of private investment now.
He said his management team was even looking at Greece, given improving economic conditions, but before doing that they need to be assured that money can be earned on a sustainable basis.
Soros also reiterated his view that efforts by Germany to save the single currency have only made things worse. A sustainable recovery for the region still doesn’t exist, even if markets are far from the turmoil of a couple of years ago. “I fear that the euro zone could experience a long phase of economic stagnation similar to Japan’s in the past 25 years.”
Read more: George Soros says he's a euro believer, looks to invest in Europe banks - The Tell - MarketWatch
“I believe in the euro. Therefore my investment team is looking forward to making [sic] a lot of money soon in Europe by, for example, pumping money in banks which urgently need capital,” Soros reportedly said in the interview, adding that the euro zone needs this type of private investment now.
He said his management team was even looking at Greece, given improving economic conditions, but before doing that they need to be assured that money can be earned on a sustainable basis.
Soros also reiterated his view that efforts by Germany to save the single currency have only made things worse. A sustainable recovery for the region still doesn’t exist, even if markets are far from the turmoil of a couple of years ago. “I fear that the euro zone could experience a long phase of economic stagnation similar to Japan’s in the past 25 years.”
Read more: George Soros says he's a euro believer, looks to invest in Europe banks - The Tell - MarketWatch
February 15, 2014
Eurozone recovery still slow, but Germany and France doing better than expected
Europe's overall economy may be weak, but eurozone growth continues.
Indeed it was slightly stronger-than-expected in the bloc’s two biggest economies – Germany and France – in the final three months of last year.
Analysts said the growth was mainly driven by exports and investment.
German GDP expanded 0.4 percent from the previous quarter, France’s by 0.3 percent and Italy’s by 0.1 percent
The figures, from Eurostat, the EU’s statistics office, show 0.3 percent growth region-wide compared to the previous quarter.
Upwardly revised third quarter numbers meant France managed to avoid slipping back into recession and had growth of 0.3 percent for the whole of last year.
French company and public investment rose and household spending recovered. But the finance minister said faster growth was needed to create more jobs with unemployment at nearly 11 percent.
Italy, which is once again in political turmoil, dragged itself back to growth for the first time since mid-2011.
But the final quarter’s 0.1 percent expansion was not enough to keep GDP from contracting by 1.9 percent over the whole of 2013.
One positive sign is that – significantly – for the first time in almost three years, all of the six largest eurozone economies did manage quarterly expansions.
Read more: Eurozone recovery still slow, but Germany and France doing better than expected | euronews, economy
Indeed it was slightly stronger-than-expected in the bloc’s two biggest economies – Germany and France – in the final three months of last year.
Analysts said the growth was mainly driven by exports and investment.
German GDP expanded 0.4 percent from the previous quarter, France’s by 0.3 percent and Italy’s by 0.1 percent
The figures, from Eurostat, the EU’s statistics office, show 0.3 percent growth region-wide compared to the previous quarter.
Upwardly revised third quarter numbers meant France managed to avoid slipping back into recession and had growth of 0.3 percent for the whole of last year.
French company and public investment rose and household spending recovered. But the finance minister said faster growth was needed to create more jobs with unemployment at nearly 11 percent.
Italy, which is once again in political turmoil, dragged itself back to growth for the first time since mid-2011.
But the final quarter’s 0.1 percent expansion was not enough to keep GDP from contracting by 1.9 percent over the whole of 2013.
One positive sign is that – significantly – for the first time in almost three years, all of the six largest eurozone economies did manage quarterly expansions.
Read more: Eurozone recovery still slow, but Germany and France doing better than expected | euronews, economy
February 11, 2014
EU Anti-Corruption Report shows corruption in the EU amounts to more than 120 billion euros a year:
 |
| Corruption is widespread in the EU even in the Netherlands |
The EU Anti-Corruption Report explains the situation
in each Member State: what anti-corruption measures are in place, which
ones are working well, what could be improved and how. National
chapters in English and in national languages are available here: http://ec.europa.eu/anti-corruption-report
The report
shows that both the nature and level of corruption, and the
effectiveness of measures taken to fight it, vary from one Member State
to another. It also shows that corruption deserves greater attention in
all Member States.
Corruption
is taking place in every EU member state from North to South . Even in unsuspected countries like the Netherlands. In the report the
Commission suggests that the Netherlands should focus
some of their efforts also on prosecuting cases of corruption in
international
business transactions, by increasing the capacity to proactively
investigate foreign bribery.
More than three quarters of European citizens, and 61 percent of the
Dutch, agree that corruption is widespread in their home country. Four
percent of Europeans, and two percent of the Dutch, say that they have
been asked or expected to pay a bribe in the past year.
This trend is also illustrated by the results
of a Eurobarometer survey on the attitudes of Europeans towards
corruption published today. The survey shows that three quarters (76%)
of Europeans think that corruption is now widespread and more than half
(56%) think that the level of corruption in their country has increased
over the past three years. One out of twelve Europeans (8%) say they
have experienced or witnessed a case of corruption in the past year.
Eurobarometer results are available here.
"Corruption
undermines citizens' confidence in democratic institutions and the rule
of law, it hurts the European economy and deprives States from
much-needed tax revenue. Member States have done a lot in recent years
to fight corruption, but today’s Report shows that it is far from
enough. The Report suggests what can be done, and I look forward to
working with Member States to follow it up", said Cecilia Malmström, EU Commissioner for Home Affairs.
"Being
a politician has unfortunately also become a profitable business
opportunity for many of our European political elite, including some of
our very own here in Holland. Instead of serving their constituents they
are in politics to enrich themselves", said a housewife in the town of
Almere in the Netherlands
Read more: EUROPA - PRESS RELEASES - Press release - Commission unveils first EU Anti-Corruption report
EU-Digest
Subscribe to:
Posts (Atom)