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LONDON—U.K. economic output collapsed in the second quarter of 2012, official data showed Wednesday, raising questions about the wisdom of Chancellor of the Exchequer George Osborne’s austerity drive when the economy remains in recession. In its preliminary estimate, the Office for National Statistics said gross domestic product contracted 0.7% between April and June—the biggest quarterly contraction since the first quarter of 2009. On an annual basis the economy shrank 0.8%. The contraction [...] Ireland Plans $2.76 Billion Stimulus Package The Irish government Tuesday said it has found over €2.25 billion ($2.76 billion) to salvage a number of delayed road, school and health-care construction projects, which it hopes will create jobs without increasing the debt burden of the troubled economy. Spain: King Juan Carlos And Crown Prince Felipe Take 7% Pay Cuts in Austerity Drive King Juan Carlos and Crown Prince Felipe are cutting their yearly salaries [...] “We now perceive the eurozone crisis as a long-term threat to the South Korean economy,” says the finance minister. “We need to store up enough fiscal measures to endure this long journey.” via Bloomberg: South Korea indicated that it’s preserving fiscal firepower for worsening economic conditions after Europe’s debt crisis triggered a cut to the nation’s growth forecast. The government’s 8.5 trillion won ($7.4 billion) of economic support measures announced yesterday, including assistance [...] Official forecasts for growth in Britain are based on unrealistic expectations that the private sector, consumer demand and foreign trade will drive a recovery, according to leading ratings agency Standard & Poor’s. S&P said the Office for Budget Responsibility’s expectation that the economy will grow by 0.8pc this year and 2pc in 2013 may well prove “overly optimistic” given the weak outlook for the British economy. The economy shrank by 0.3pc in [...] There were long queues outside a state-funded pharmacy in Athens yesterday as people lined up to get life-saving drugs for seriously ill relatives. The shortages in chemotherapy medicine and other expensive drugs arose when pharmaceutical companies cut credit to the country’s largest state-backed heath insurance fund, EOPYY, which provides subsidised medicine to ordinary Greeks. The problem is yet another reminder of the challenges facing Greece, which goes to the polls for a [...] Marc Chandler, Marc to Market
A red herring is a rhetoric ploy to divert attention from the issue at hand by introducing some irrelevant topic. The framing of the Greek election around the memorandum of understanding is such a red herring. There has been such deterioration of the economic conditions in Greece that the conditions and terms of its international assistance will have to be re-crafted in any event.
Consider Greece’s two main [...] By Roland Gribben and Fiona Govan, Madrid 8:57PM BST 07 May 2012 Prime minister Marian Rajoy indicated the Government was ready to intervene to save banks wrestling with the collapse of the housing market. Bankia, Spain’s fourth biggest bank, is the first in line for state aid. Rodrigo Rato, chairman and former IMF managing director, swiftly resigned after it was disclosed the finance ministry was preparing to refinance the bank and introduce legislation to protect [...] raders have warned of more market turbulence after elections in Greece and France fuelled uncertainty over Europe’s ability to solve its debt crisis. Germany’s Dax and France’s Cac-40 were more than 1% lower and the main stock exchange in Athens slumped 8% as markets worried that Greece’s failure to form a government has placed further doubt over the country’s rescue, increasing speculation over the eventual break-up of the single currency. The election [...] The French-led counter-attack and rumblings of revolt through every branch of the EU institutions last week have brought this aberrant phase of the eurozone crisis to an abrupt end. “It’s not for Germany to decide for the rest of Europe,” said François Hollande, soon to be French leader, unless he trips horribly next week. Strong words even for the hustings. “If I am elected president, there will be a change in Europe’s [...] We start today’s story of the day by pointing out that Deutsche Bank – easily Europe’s most critical financial institution – reported results that were far worse than expected, following a decline in equity and debt trading revenues of 23% and 8%, but primarily due to Europe simply “not being fixed yet” despite what its various politicians tell us. And if DB is still impaired, then something else will have [...] by Siobhan Dowling In recent months, German Chancellor Angela Merkel has been using the urgency posed by the euro zone’s debt crisis to reshape Europe’s economies, largely to conform with a particular quirk of German economists: disdain for government debt. For now, Merkel appears to be getting her way. Late last month, 25 of 27 EU states obediently signed up to play by her rules when they agreed to pan-European fiscal union. If [...] From Telegraph: The Organisation for Economic Development and Cooperation (OECD) is predicting that the economy will shrink, the Government was warned on Thursday. Whitehall sources said the forecasts suggest that growth would be negative during the first six months of next year due to the euro crisis. The prediction, to be published on Monday, is the first from a respected forecaster to indicate that Britain faces a double-dip recession. The preliminary findings of the [...] by Washington Blog “The Prevailing Debate Among Economists and Historians is Whether the World Economy Faces the ‘Great’ Depression of the 1930s or the ‘Long’ Depression of the 1870s” Reuters notes: You know it’s grim when the prevailing debate among economists and historians is whether the world economy faces the “Great” depression of the 1930s or the “Long” depression of the 1870s. *** Harvard professor and economic [...] Workers across Greece walked off the job on Tuesday, kicking off a crippling 48-hour strike with a mass protest in the capital, Athens, as parliament debated a new austerity plan. Police fired tear gas in clashes with protesters. AFP – Greece ground to a halt Tuesday as angry workers launched a 48-hour general strike against an austerity drive ordered by its bankruptcy-threatened government in exchange [...] From FT: The Spanish government has approved a fresh round of cuts to public spending as part of an ongoing austerity drive to reassure jittery financial markets that Spain can insulate itself from the debt crisis ravaging other indebted eurozone members. The Spanish cabinet on Friday set a spending limit of €117.4 billion euros and passed a 3.8 per cent cut in the state budget for 2012. The reduction is [...] BERLIN — Chancellor Angela Merkel of Germany retreated Friday from demands that private financial institutions be pressured to participate in efforts to rescue the Greek economy, a compromise that seemed to offer some breathing space in Europe’s efforts to confront its potentially ruinous debt crisis. Her critics in the European Central Bank and in many European capitals had argued that any requirement that private investors absorb some [...] by LFM EU austerity drive country by country: Greece to intensify austerity measures even further to satisfy conditions of IMF continued financing: European cities hit by protests: Food price rises, also clothing costs and inflation a growing concern: Irish government forced to make even bigger saving and intensify austerity on its population: Australia set to increase interest rates and Aussie dollar heads for parity with US dollar: UK government imposing austerity measures, cutting Civil service and government [...] |
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