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European Commission Autumn forecast 2011-13: Growth at a standstill
November 10, 2011--The recovery of the EU economy has stopped. Sharply deteriorated confidence is affecting investment and consumption, weakening global growth is holding back exports, and urgent fiscal consolidation is weighing on domestic demand. GDP in the EU is now projected to stagnate until well into 2012. Growth for the whole of 2012 is forecast at about ½%.
By 2013, a return to slow growth of about 1½% is expected. No real improvements are projected for labour markets, and unemployment is forecast to remain at the current high level of around 9½%. Inflation is set to return below 2% over the coming quarters. Fiscal consolidation is forecast to progress with public deficits set to decline to just above 3% by 2013 under an assumption of unchanged policies.
Commission Vice-President for Economic and Monetary Affairs Olli Rehn said: "Growth has stalled in Europe, and there is a risk of a new recession. While jobs are increasing in some member states, no real improvement is forecast in the unemployment situation in the EU as a whole. The key for the resumption of growth and job creation is restoring confidence in fiscal sustainability and in the financial system and speeding up reforms to enhance Europe's growth potential. There is a broad consensus on the necessary policy action. What we need now is unwavering implementation. On my part, I will start using the new rules of economic governance from Day one."
Economic growth has stalled
The economic recovery has come to a standstill. A stagnation of GDP is now expected in the current and coming quarters. Since the summer, the outlook has taken a turn for the worse. The sovereign-debt crisis in euro-area Member States has spread, debt sustainability in advanced economies outside the EU has also moved into investors' focus, and the global economy has lost steam. Firms are expected to postpone or cancel investment as the growth outlook has darkened amid increased uncertainty. Households are projected to consume prudently, while in some Member States also continuing to work down high levels of debt. Moreover, banks are likely to restrict lending, thereby further curtailing the prospects for investment and consumption. Fiscal consolidation has become more urgent as concerns about sustainability have become more acute and spread to hitherto unaffected countries. The weakening real economy, fragile public finances and the vulnerable financial sector appear to be mutually affecting each other in a vicious circle. Confidence and growth will only return once this negative interaction is interrupted.
In combination, the policy measures decided over the past months are expected to be effective in reducing the uncertainty related to the sovereign-debt and financial-market crisis towards mid-2012, and this will gradually release deferred investment and consumption. Annual GDP growth in 2012 is forecast at 0.6% in the EU and 0.5% in the euro area. Growth in 2013 is expected to remain lacklustre at 1.5% in the EU and 1.3% in the euro area. No group of Member States will escape the expected slowdown, but growth differences will persist.
Growth not sufficient for labour market improvements
Employment growth is expected to grind to a halt in 2012. The expected pick-up of GDP growth starting in the second half of next year is too moderate to produce any strong labour market performance. Unemployment is not expected to fall over the forecast horizon. The situation of Member States' labour markets continues to differ substantially.
view the European Commission -European Economic
Forecast- Autumn 2011
Source: Europa
EU financial transactions tax hits London 'No'
November 10, 2011--EU finance ministers ran into British opposition Tuesday at the bloc's first formal debate on imposing a tax on financial transactions.
The stiff resistance from London during Brussels talks echoed already firm Chinese and US objections that carried the day at a G20 summit last week.
Ministers from Belgium and Austria each said they could see the tax working initially just in the 17 currency partners.
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Source: EUbusiness
Germany denies discussing breakup of eurozone
November 10, 2011--Germany denied on Thursday reports that Berlin and Paris had discussed a possible breakup of the eurozone in the face of the debt crisis gripping key members and roiling global markets.
"Reports that Germany is pursuing plans for a smaller eurozone are false," government spokesman Steffen Seibert said in a statement on microblogging website Twitter.
"The German government, on the contrary, wants to stabilise the eurozone as a whole."
A French source also dismissed the reports out of hand, saying there were no plans to shrink the ranks of the 17-member eurozone.
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Source: EUbusiness
Extension of the ban on the taking of net short positions in ten French securities of the financial sector
November 10, 2011--The Board of the Autorité des marchés financiers (AMF) reassessed in early November 2011 the ban on the taking of net short positions in ten French securities of the financial sector (as listed in the related
decision).
The Board of the AMF considered that the market conditions were not satisfactory to lift the said ban. The
AMF Chairman therefore proposed to the Minister for the Economy, Finance and Industry to extend it1.
The Minister decided to respond favourably to this proposal by taking a decree which was published in the
Official Journal dated 10 November 2011.
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Source: Autorité des marchés financiers (AMF)
All EU countries should adopt euro: Barroso
November 9, 2011--The head of the European Commission Manuel Barroso said on Wednesday that all EU countries should adopt the euro, amid gloomy predictions that the raging debt crisis could spell the end of the common currency.
"Belonging to the euro area or thriving towards it should define the EU," Barroso said in Berlin. "The EU as a whole and the euro area belong together and should not be divided."
"The challenge is how to further deepen euro area integration without creating divisions with those who are not yet in it," he said. "A split union will not work."
Eurex successfully implemented software upgrade
Eurex clients to benefit from a significant reduction in programming complexity thanks to new connectivity options based on the industry standards FIX and FIXML
November 8, 2011--Eurex Group launched yesterday its latest software release. Eurex Release 14.0 provides members with greater choice and enhanced flexibility in how they connect to the Eurex network through new interfaces, further clearing and risk management improvements as well as performance optimization.
The completely new developed three interfaces – Eurex Market Data, Eurex FIX Gateway and FIXML Clearing API – are based on the industry standards FIX and FIXML. They are geared towards non latency-sensitive trading members and clearing members alike as they complement our high-speed interfaces. The interfaces provide a number of benefits, namely increased customization, hardware independence, and flexibility. With this switch, in Release 14 Eurex Group lays the groundwork for a medium-term decommissioning of the VALUES API/MISS infrastructure for trading and clearing.
The Eurex Market Data Interface disseminates price level aggregated and netted depth data in multicast format. The benefits are lower granularity and lower bandwidth requirements. It utilizes the FIX Adapted Streaming protocol (FAST) and the same content as the market data content via VALUES API.
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Source: Europe
Council adopts directive to strengthen supervision of financial conglomerates
Novermber 8, 2011--The Council today1 adopted a directive amending the financial conglomerate directive in
order to close loopholes and ensure appropriate supplementary supervision of financial entities in a financial conglomerate (PE-CONS 39/11 +15670/11 ADD 1). The newdirective also adapts the supervision of financial conglomerates to the EU's new
supervisory structure
The financial conglomerate directive (FICOD), adopted at the end of 2002, gave national financial supervisors additional powers and tools to watch over conglomerates and apply
supplementary supervision on them, in addition to specific banking and insurance supervision. The objective of supplementary supervision was to control group risks2 and
the risk arising from double gearing (i.e. multiple use of capital within a conglomerate), whereby a number of companies pool their overall risk by placing capital with each other.
The revision of FICOD also amends the relevant legislation on banking and insurance supervision, namely the capital requirements directive (2006/48/EC and 2006/49/EC) and
the directive on supplementary supervision of insurance undertakings in insurance groups (98/78/EC).
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Source: Council of the European Union
Acceptance rate of the exchange offer by Alpha Beta Netherlands Holding N.V. as part of the planned business combination of Deutsche Börse AG and NYSE Euronext increases to over 97 percent
November 8, 2011--Pursuant to Section 39c of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz – WpÜG), shareholders of Deutsche Börse AG who had not accepted the exchange offer by Alpha Beta Netherlands Holding N.V. during the initial acceptance period ending on 13 July 2011 or during the additional acceptance period ending on 1 August 2011 were still able to tender their shares during a three-month period until 4 November 2011.
During this period, 3,169,942 Deutsche Börse shares were tendered, which corresponds to 1.63 percent of the total number of Deutsche Börse shares.
Altogether, a total number of 189,230,721 Deutsche Börse shares were tendered under the exchange offer made by Alpha Beta Netherlands Holding N.V. to the shareholders of Deutsche Börse AG. This corresponds to an acceptance rate of 97.04 percent of the total number of Deutsche Börse shares.
Source: Deutsche Börse
Italy's Berlusconi to resign as prime minister
November 8, 2011--Italian Prime Minister Silvio Berlusconi said Tuesday that he would resign after Parliament approves a new budget that includes austerity measures sought by international lenders.
"After the approval of this finance law, which has amendments for everything which Europe has asked of us and which the Eurogroup has requested, I will resign, to allow the head of state to open consultations," he told Canale 5 television, which he owns.
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Source: CNN
Greek default within the euro is the only real option
November 8, 2011--It was a possibility feared but unspoken – until last week. Suddenly a Greek exit from the euro was on the table. “Are you in or are you out?” Many Europeans no longer care. They should. Their leaders do. Here is why.
Greece will restructure. It can do so “within the euro” or it can do so “outside the euro”. The difference is crucial. If you already understand the distinction, stop reading here. If not, you may soon wish you had. For here is how an exit of Greece from the eurozone would play out:
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Source: FT.com
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