U.K. banks should pay lower bonuses and retain the money to help strengthen their balance sheets, Deputy Prime Minister Nick Clegg said.
12/27/2011
— Filed under: Finance
Tags: banks, economy, U.K.
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THE EUROPEAN Commission yesterday sharply lowered its forecast for economic growth in Ireland next year. It now expects gross domestic product to expand by just 1 per cent. Three months ago it forecast GDP growth of 1,9 per cent for 2012.
11/30/2011
— Filed under: Finance
Tags: economy, EU, forecast
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AN EMERGENCY meeting of the leaders of all 27 European Union states will be held on Wednesday as the Eurozone battles to find a solution to the continent’s debt crisis, it was revealed last night.
The decision to include representatives of states which do not use the euro at the meeting underscored the gravity of the challenge facing European leaders as they work to prevent Greece’s financial turmoil spilling into other states.
Speaking after yesterday’s meeting of EU leaders in Brussels, Prime Minister David Cameron acknowledged greater fiscal and economic integration in the Eurozone was now inevitable, but claimed to have secured a commitment that would protect UK interests.
He said: «The Eurozone countries must come together and take responsibility and produce a comprehensive and credible package which puts the success of the Eurozone beyond doubt.»
The crisis has been linked to low business confidence and the Federation of Small Businesses in Wales yesterday called for a VAT cut to help enterprises and incentives to encourage employment.
Figures from both the left and the right of the political spectrum yesterday demanded that politicians work to reform the EU and face up to the threats confronting the UK economy so that real growth can return.
Caerphilly Labour MP Wayne David, a former leader of his party’s group in the European Parliament, said it was essential that Britain was not left out of the decisions which are being taken to secure the Eurozone’s future.
He said: «Our view is we should not just be knocking at the door but sitting at the table, making sure British interests are taken into account.
«We’ve got to be there arguing the British case on the development of the single market because our economy depends on that.
«This is not something ‘over there’. This is something that could affect everybody in this country.»
But Mr David also stressed that a change of direction was needed to steer the EU back towards prosperity.
He said: «It’s one of the ironies that David Cameron is supposed to be a eurosceptic but his closest ideological soulmate is (German chancellor) Angela Merkel, because they are both pursuing excessive austerity measures that are preventing growth.»
Cardiff University’s Professor Patrick Minford, long seen as a leading champion of Thatcherite economics, doubted that a solution would be found this week.
He said: «I don’t think anything is going to happen, to be honest. There’s an impossibility thing going on here.
«The Germans don’t want to put up any more money and Greece is clearly going to need an awful lot.»
Laying out the alternatives as he sees the situation, he said: «Somebody has got to agree to let these countries go and default or somebody has to rescue them.»
Prof Minford expects the IMF to deliver a special fund to cope with the consequences of defaults, but cannot see an early end to the instability.
He said: «There are a lot of vested interests in the game. This is the problem.»
However, he cautioned against despair at the challenges facing the EU and urged British companies to focus on global opportunities.
Claiming that people had panicked «at the first sound of gunfire», he said: «The world economy is not in as bad shape as people talk about. It’s growing this year by 4%…
«Look where there is growth and get stuck in there and sell there.»
Carmarthen East & Dinefwr Plaid Cymru MP Jonathan Edwards argued that searching questions had to be asked about the nature of the European economies.
He said: «The problems faced by the Eurozone are of great importance because of the trade that we do with euro-areas on the continent and in Ireland and our ability to export goods and services.
«The question is whether Europe can either politically or economically continue to write ever-larger cheques for bailouts or face the problem head-on and accept that European banks and countries will have to take a haircut so that we can get back to the previous economic situation — something which, to some extent, the markets have already priced in.
«In the longer term, we need to be examining the economic choices of the developed world and, in the light of these recurring financial crises, examine other solutions which put people before markets — which means keeping people in their homes, full employment, restructuring the economy away from the finance sector and, of course, the environment.
«It wasn’t ordinary people that caused this crisis, but too often they are the victims of poor economic decisions by those who thought they knew better.»
Prof Minford argues that Britain’s relationship with the EU must change and that present policies threaten the UK’s long-term prosperity.
He said: «The problem is this club is not suiting us at all. We’ve just had the proposal for the financial transaction tax, which is the most incredible slap in the face for us. This is a disaster for us, really.
He also warned that «regulation mania» must not be allowed to result in a «hobbled» financial services sector.
Arguing that EU policies threatened Britain’s recovery, he said: «We have an interest in free markets and flexible labour markets to get our unemployment down and improve our growth situation… They must not have the power to regulate us so much — that’s the fundamental problem.»
Iestyn Davies, of the Federation of Small Businesses, acknowledged the anxiety among Welsh entrepreneurs.
He said: «There is this feeling there is no light at the end of the tunnel except prolonged cuts and prolonged austerity.»
Mr Davies said measures such as a VAT cut, a National Insurance Contribution holiday and support for recruitment would help businesses respond to the wider economic challenges.
This is not something ‘over there’ — this could affect everybody in this country
09/24/2011
— Filed under: Finance
Tags: economy, EU, leaders
Greece’s deepening recession will probably scuttle its 2011 deficit targets and mean no growth next year, the country’s finance minister said, as European Union and International Monetary Fund officials suspended a review to allow Athens to work on measures to boost growth.
08/20/2011
— Filed under: Finance
Tags: economy, European Central Bank, Greece
France and Germany said today they wanted full implementation of measures agreed at a eurozone summit in July in order to safeguard the single currency as markets brace for fresh turmoil this week.
«President (Nicolas) Sarkozy and Chancellor (Angela) Merkel reiterate their commitment to fully implement the decisions taken by the heads of state and government of the euro area and the EU institutions on July 21,» a joint statement said.
«In particular, they stress the importance that parliamentary approval will be obtained swiftly by the end of September in their two countries,» it added.
The statement comes as officials around the world scramble to head off fresh market turmoil on Monday as investors take on board Friday’s unprecedented US ratings downgrade by Standard and Poor’s on the grounds US politicians have failed to properly tackle the US debt problem.
The European debt crisis meanwhile threatens to snare Italy and Spain, after forcing bailouts for Greece, Ireland and Portugal.
In their statement, France and Germany said the measures were taken to «in order to avoid (debt) contagion.»
They said they were confident that «ECB analysis will provide the appropriate basis for secondary market interventions (to buy government bonds) as it will help determine the case when financial stability of the eurozone as a whole is at risk.»
The ECB has been reluctant to buy government bonds directly from the markets even though this should ease the pressure on weaker eurozone countries seeking to raise fresh funds.
Some analysts have blamed ECB chief Jean-Claude Trichet’s failure to clearly back Spanish and Italian government bonds last week for contributing to the massive turmoil on the stock and debt markets.
08/3/2011
— Filed under: Politics
Tags: economy, Merkel, Sarkozy
GEORGE Osborne’s brutal spending cuts have left Britain idling behind European rivals.
05/4/2011
— Filed under: Politics
Tags: economy, GEORGE Osborne, UK
With its long history of political chaos, the recent split within the ruling party of Italy’s prime minister Silvio Berlusconi is unlikely to derail the nation’s attempts to reduce its budget deficit, while the economy seeks to climb out of the recession.
