There was no let-up in the turmoil caused by European budget deficits on Thursday (4 February), with investors turning their attention to the weak state of Portugal's public finances. The country's stock market plunged nearly five percent, the biggest daily fall since November 2008, and bonds yields rose, even as opposition parties proposed to increase public spending on the Atlantic islands of Madeira and the Azores. Portuguese finance minister Fernando Teixeira dos Santos from the centre-left Socialist party implored members of parliament not to follow through with the opposition regional finance bill, warning it would only add to investor doubts. In a televised address, he said it would send the "the worst possible message" to financial markets, at a time when Europe's peripheral states are under intense scrutiny.
There was no let-up in the turmoil caused by European budget deficits on Thursday (4 February), with investors turning their attention to the weak state of Portugal's public finances.
The country's stock market plunged nearly five percent, the biggest daily fall since November 2008, and bonds yields rose, even as opposition parties proposed to increase public spending on the Atlantic islands of Madeira and the Azores.
Portuguese finance minister Fernando Teixeira dos Santos from the centre-left Socialist party implored members of parliament not to follow through with the opposition regional finance bill, warning it would only add to investor doubts.
In a televised address, he said it would send the "the worst possible message" to financial markets, at a time when Europe's peripheral states are under intense scrutiny.
No one dares to show investors the finger like Argentina did. *Lunatic*, n. One whose delusions are out of fashion.
UK banks have a near-£100 billion exposure to the struggling European economies currently sending shockwaves through global markets. Nerves are frayed because a sovereign debt default by Greece - and even Portugal and Spain - could rip another major hole in bank balance sheets shaken by the financial crisis. According to the Basel-based Bank for International Settlements (BIS), UK banks had a total £76.2 billion exposure to the Spanish economy in corporate and government lending at the end of September last year. They also lent £7.8 billion to Greece and £15.6 billion to Portugal, according to the BIS figures. The fears have weighed on bank stocks, with Barclays shares down almost 20 per cent in the past month. Royal Bank of Scotland and HSBC have shed 16 per cent and 13 per cent respectively.
Nerves are frayed because a sovereign debt default by Greece - and even Portugal and Spain - could rip another major hole in bank balance sheets shaken by the financial crisis.
According to the Basel-based Bank for International Settlements (BIS), UK banks had a total £76.2 billion exposure to the Spanish economy in corporate and government lending at the end of September last year.
They also lent £7.8 billion to Greece and £15.6 billion to Portugal, according to the BIS figures.
The fears have weighed on bank stocks, with Barclays shares down almost 20 per cent in the past month. Royal Bank of Scotland and HSBC have shed 16 per cent and 13 per cent respectively.
Banco Santander is selling one out of every two mortgages in Britain as the bank pushes ahead with expansion plans which could see it buying 315 Royal Bank of Scotland branches. Net mortgage lending in 2009 reached £7.6bn - estimated to be almost half the total market in 2009. That compares with its share of existing mortgages of just 13 per cent. Santander also has around 10 per cent of deposits and around 8 per cent of current accounts.
Banco Santander is selling one out of every two mortgages in Britain as the bank pushes ahead with expansion plans which could see it buying 315 Royal Bank of Scotland branches.
Net mortgage lending in 2009 reached £7.6bn - estimated to be almost half the total market in 2009. That compares with its share of existing mortgages of just 13 per cent. Santander also has around 10 per cent of deposits and around 8 per cent of current accounts.
But hey, let's just blame the PIGS. In the long run, we're all dead. John Maynard Keynes
Greece is currently facing the prospect of bankruptcy, which could threaten the euro. In an interview with SPIEGEL ONLINE, Peter Bofinger, a prominent economic adviser to the German government, explains why he believes Europe's common currency would survive a Greek collapse and calls for a new global monetary order....SPIEGEL ONLINE: ... The financial problems of the southern European members are putting pressure on the entire euro zone. Some of your fellow economists fear a crash would trigger a domino effect and cause a rapid plunge in the value of the euro. Bofinger: Some of my fellow economists are going too far. Compared to other currency zones, the euro zone is doing a lot better than many claim. The national debts and new state borrowing is lower than in the United States. And in an emergency it could also cope with a Greek bankruptcy. The country produces just 2.6 percent of the euro zone's GDP.SPIEGEL ONLINE: Still, the loss of faith in the euro would be massive. And regarding national debt, debt within the euro zone is currently about 88 percent of its GDP. You call that figure low? Bofinger: It is not low, but it is lower than in the US. There, the national debt is 92 percent of GDP. In Japan, it is even 197 percent. And the United Kingdom's budget deficit is far worse than that of the euro zone. And as far as a possible loss of confidence is concerned, let me point out that the state of California has been on the verge of bankruptcy for months and its share of the US's GDP is about 13 percent. Viewed from that perspective, my fear of a domino effect is limited.
...SPIEGEL ONLINE: ... The financial problems of the southern European members are putting pressure on the entire euro zone. Some of your fellow economists fear a crash would trigger a domino effect and cause a rapid plunge in the value of the euro.
Bofinger: Some of my fellow economists are going too far. Compared to other currency zones, the euro zone is doing a lot better than many claim. The national debts and new state borrowing is lower than in the United States. And in an emergency it could also cope with a Greek bankruptcy. The country produces just 2.6 percent of the euro zone's GDP.
SPIEGEL ONLINE: Still, the loss of faith in the euro would be massive. And regarding national debt, debt within the euro zone is currently about 88 percent of its GDP. You call that figure low?
Bofinger: It is not low, but it is lower than in the US. There, the national debt is 92 percent of GDP. In Japan, it is even 197 percent. And the United Kingdom's budget deficit is far worse than that of the euro zone. And as far as a possible loss of confidence is concerned, let me point out that the state of California has been on the verge of bankruptcy for months and its share of the US's GDP is about 13 percent. Viewed from that perspective, my fear of a domino effect is limited.
Interview with German Government Economic Adviser: Euro Zone 'Could Cope with Greek Bankruptcy' - SPIEGEL ONLINE - News - International
SPIEGEL ONLINE: That could have to do with the fact that you're a follower of Keynesian economics. As such, you believe in stimulating demand in order to increase production and employment and you support the idea of hefty government deficit spending to make that happen. But don't the exploding deficits make you uneasy?
Meeting with the commission president, Jose Manuel Barroso, and enlargement commissioner Ollie Rehn, in Brussels on Thursday (4 February) she "underlined potential unfortunate and damaging effects of any link made by member states between the Icesave issue and the second review of Iceland's economic programme with the IMF," according to a statement from her office, referring to the row between between the north Atlantic nation and the Netherlands and the UK. After the Icelandic Icesave internet bank collapsed in 2008, depositers in the UK and the Netherlands were compensated by their governments to the tune of €3.8 billion. The Hague and London now are demanding Reykjavik pay them back. The government has agreed to do so, but the terms are considered onerous by a majority of the population. Under the terms of the agreement the loan will be paid back over 15 years with interest, with estimates suggesting every household will have to contribute around €45,000.
Meeting with the commission president, Jose Manuel Barroso, and enlargement commissioner Ollie Rehn, in Brussels on Thursday (4 February) she "underlined potential unfortunate and damaging effects of any link made by member states between the Icesave issue and the second review of Iceland's economic programme with the IMF," according to a statement from her office, referring to the row between between the north Atlantic nation and the Netherlands and the UK.
After the Icelandic Icesave internet bank collapsed in 2008, depositers in the UK and the Netherlands were compensated by their governments to the tune of €3.8 billion. The Hague and London now are demanding Reykjavik pay them back.
The government has agreed to do so, but the terms are considered onerous by a majority of the population. Under the terms of the agreement the loan will be paid back over 15 years with interest, with estimates suggesting every household will have to contribute around €45,000.
One in three Europeans of working age has few or no formal qualifications, making them 40% less likely to be employed than those with medium-level qualifications, according to figures compiled by an expert group. Nearly a third of Europe's population aged 25-64 have no, or only low, formal qualifications and only one quarter have high-level qualifications, according to the 'New Skills for New Jobs' report. The document, written by an independent panel established by the European Commission, was published yesterday (4 February)and is expected to feed into a new skills strategy due to be launched by the EU executive later this year....Unemployment in the EU 27 has hit 9.6%, but skilled workers are significantly less likely to be out of work. Figures released with the report also show that companies that train their staff are 2.5 times less likely to go out of business compared to firms that do not.However, experts warned the growth in temporary and contract working arrangements could make employers less likely to invest in upgrading skills.
One in three Europeans of working age has few or no formal qualifications, making them 40% less likely to be employed than those with medium-level qualifications, according to figures compiled by an expert group.
Nearly a third of Europe's population aged 25-64 have no, or only low, formal qualifications and only one quarter have high-level qualifications, according to the 'New Skills for New Jobs' report.
The document, written by an independent panel established by the European Commission, was published yesterday (4 February)and is expected to feed into a new skills strategy due to be launched by the EU executive later this year.
...Unemployment in the EU 27 has hit 9.6%, but skilled workers are significantly less likely to be out of work. Figures released with the report also show that companies that train their staff are 2.5 times less likely to go out of business compared to firms that do not.
However, experts warned the growth in temporary and contract working arrangements could make employers less likely to invest in upgrading skills.
(My emphasis) *Lunatic*, n. One whose delusions are out of fashion.
POLAND: On February 2, the Federation of Independent Rail Operators ZNPK announced it had filed a complaint with the European Commission alleging that the Polish authorities are infringing the spirit of EU legislation by giving preferential treatment to incumbent freight operator PKP Cargo. ZNPK officials believe that the revised structure of freight tariffs introduced by infrastructure manager PKP PLK in December 2009 is discriminatory as it offers financial incentives to train operators to run lighter freight trains. This benefits short feeder trains and wagonload services, almost all of which are operated by PKP Cargo.
POLAND: On February 2, the Federation of Independent Rail Operators ZNPK announced it had filed a complaint with the European Commission alleging that the Polish authorities are infringing the spirit of EU legislation by giving preferential treatment to incumbent freight operator PKP Cargo.
ZNPK officials believe that the revised structure of freight tariffs introduced by infrastructure manager PKP PLK in December 2009 is discriminatory as it offers financial incentives to train operators to run lighter freight trains. This benefits short feeder trains and wagonload services, almost all of which are operated by PKP Cargo.
<head explodes> Does anyone need an explanation of the glaring idiocy here? *Lunatic*, n. One whose delusions are out of fashion.
GERMANY. Federal Transport Minister Dr Peter Ramsauer and Deutsche Bahn Chairman Dr Rüdiger Grube officiated at an event on February 2 launching the huge Stuttgart 21 project. Together with Baden-Württemburg Ministerpräsident Günther Oettinger, Mayor of Stuttgart Dr Wolfgang Schuster and Director of the Verband Region Stuttgart Jeannette Wopperer, they ceremonially dismantled a buffer stop in the existing station, marking the start of an ambitious scheme to replace the present Stuttgart Hauptbahnhof by an underground station. ...Partly because of the cost, the Stuttgart 21 project has generated considerable controversy - and continues to do so. The price tag now stands at €6∙5bn, of which €4∙2bn is for the new main station and the approach works. However, the cost may well rise again before completion, currently expected in 2019.
GERMANY. Federal Transport Minister Dr Peter Ramsauer and Deutsche Bahn Chairman Dr Rüdiger Grube officiated at an event on February 2 launching the huge Stuttgart 21 project.
Together with Baden-Württemburg Ministerpräsident Günther Oettinger, Mayor of Stuttgart Dr Wolfgang Schuster and Director of the Verband Region Stuttgart Jeannette Wopperer, they ceremonially dismantled a buffer stop in the existing station, marking the start of an ambitious scheme to replace the present Stuttgart Hauptbahnhof by an underground station.
...Partly because of the cost, the Stuttgart 21 project has generated considerable controversy - and continues to do so. The price tag now stands at €6∙5bn, of which €4∙2bn is for the new main station and the approach works. However, the cost may well rise again before completion, currently expected in 2019.
REUTERS - China will levy heavy anti-dumping duties on U.S. chicken products, its Commerce Ministry said on Friday, a move likely to aggravate trade relations and antagonise one of the few U.S. industries that profitably exports to China. The ministry's initial investigation showed that U.S. companies had dumped chicken products into the Chinese market, according to the ministry's website. The tariffs were announced a day after China requested a World Trade Organisation ruling on European Union duties on shoes made in China. That was the most recent of many cases demonstrating China's embrace of the WTO to keep markets open to the exports on which it depends.
REUTERS - China will levy heavy anti-dumping duties on U.S. chicken products, its Commerce Ministry said on Friday, a move likely to aggravate trade relations and antagonise one of the few U.S. industries that profitably exports to China.
The ministry's initial investigation showed that U.S. companies had dumped chicken products into the Chinese market, according to the ministry's website.
The tariffs were announced a day after China requested a World Trade Organisation ruling on European Union duties on shoes made in China. That was the most recent of many cases demonstrating China's embrace of the WTO to keep markets open to the exports on which it depends.
BAE will pay 400 million US dollars (£255.7 million) to the Department of Justice and £30 million to the SFO, the firm said. The company will plead guilty in court to an offence of failing to keep "reasonably accurate accounting records" in its activities in Tanzania, the SFO said. The payout to the SFO will be made as an "ex gratia payment" for the benefit of the people of Tanzania.
BAE will pay 400 million US dollars (£255.7 million) to the Department of Justice and £30 million to the SFO, the firm said.
The company will plead guilty in court to an offence of failing to keep "reasonably accurate accounting records" in its activities in Tanzania, the SFO said.
The payout to the SFO will be made as an "ex gratia payment" for the benefit of the people of Tanzania.
Saturday's El País reports on the plight of the British, Germans and Scandinavians affected by the latest real estate corruption scandal to come to light in Spain, in Montroi, Valencia. Nice homes on the hillside, close to a river, with swimming pool, artificial lake and Spain's sunshine 30 kilometres from Valencia. He paid 150,000 € to the developer but when he arrived it was nothing like the photos, there was no pool, and a few weeks after arrival the power and water went off. Rodney purchased a generator and was getting water from the village well. He says he feels humiliated and has lost everything. The copia simple of his escritura [property deed] is not worth the paper it's written on as the home has been built illegally on rustic land not classified for building. There are 77 homes in the same position.
Nice homes on the hillside, close to a river, with swimming pool, artificial lake and Spain's sunshine 30 kilometres from Valencia. He paid 150,000 € to the developer but when he arrived it was nothing like the photos, there was no pool, and a few weeks after arrival the power and water went off. Rodney purchased a generator and was getting water from the village well. He says he feels humiliated and has lost everything. The copia simple of his escritura [property deed] is not worth the paper it's written on as the home has been built illegally on rustic land not classified for building.
There are 77 homes in the same position.
