Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Today's Indicator ActionUS Office Prices Jump for first time since 2007 (seems strange given the dire situation in the commercial propert market, but there it is...)German Producer Prices Drop at Fastest Rate in 60 Years. European construction fell even as much of Europe emerged from recession. This isn't an economic indicator, but... Again, it's not an indicator, but, on the profits front, Hewlett Packard took the wind out of the sales of the hot tech sector (couldn't get the whole article, sorry) And, finally, joined a ever-louder chorus, another voice saying the US emerged from recession in 2Q> Labels: commercial property, economic indicators, European Union, oil prices, producer price index, profits Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Eurozone Moves into Deflation for First TimeFrom The Financial Times:Eurozone inflation turns negative By Ralph Atkins in Frankfurt Financial Times Published: June 30 2009 11:03 | Last updated: June 30 2009 18:16 Eurozone annual inflation has turned negative for the first time since records began, creating a headache for the European Central Bank as it seeks to draw a line under emergency measures to tackle continental Europe's recession. Consumer prices in the 16-country eurozone were 0.1 per cent lower in June than the same month a year before, according to Eurostat, the European Union's statistical office. It was the first time eurozone annual inflation had fallen below zero since comparable records began in 1991. The fall in prices reflects sharply lower energy costs and the effects of the region's worst economic downturn since the second world war. Annual inflation is hugely undershooting the ECB's target of "below but close" to 2 per cent. Read the rest of the article Labels: bailout, European Union, financial crisis, GDP Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Merkel Rejects Bailout for Eastern EuropeFrom The Wall Street Journal:MARCH 1, 2009, 10:54 A.M. ET Merkel Rejects Calls for EU Bailout of Eastern Europe WALL STREET JOURNAL ONLINE Germany rejected appeals Sunday for a single multibillion-euro bailout of eastern Europe, even after Hungary begged EU leaders not to let a new "Iron Curtain" divide the continent into rich and poor. The swift, strong comments by German Chancellor Angela Merkel dampened hopes that leaders at Sunday's European Union summit could forge a unified stance to tackle the worsening economic crisis. As Europe's largest economy, Germany has been under rising pressure to take the lead in rescuing eastern EU members, but Ms. Merkel insisted that a one-size-fits-all bailout was unwise. "The situation is very different" in Europe's economies, Ms. Merkel said as she arrived for the summit. "We cannot compare Slovakia nor Slovenia with Hungary," she said. Hungarian Prime Minister Ferenc Gyurcsany, saying the credit crunch was hitting the eastern members hardest, had called for an EU fund of up to 190 billion euro ($241 billion) to help restore trust and solvency in those nations. "We should not allow that a new Iron Curtain should be set up and divide Europe," Mr. Gyurcsany told reporters. "In the beginning of the '90s we reunified Europe, now the challenge is whether we will be able to reunify Europe financially." Ms. Merkel said that Germany and the EU stand ready to help countries who need help on a case-by-case basis. "We have shown in particular with Hungary that we help countries in need. And we will do so further, particularly through the international institutions," she said. EU nations are all grappling with a worsening recession, compounded by a severe credit crunch that has left many EU countries looking ever more inward to protect jobs and companies from international competition. Those policies are now undermining the open market cornerstone on which the EU is founded. Ahead of the summit, the leaders of nine countries--Poland, Hungary, Slovakia, the Czech Republic, Bulgaria, Romania and the three Baltic states--forged a common stand to pressure richer members in the 27-nation bloc to back up vague pledges of support with action. But Polish Finance Minister Jacek Rostowski said eastern European members shouldn't be lumped together and treated as if they all faced the same, severe problems. He counted Poland among those countries that don't need funding from the EU or its individual members. "Our position is that we must differentiate between countries that are in difficulties and those that are not," Mr. Rostowski told Poland's TVN24 television station. "We are in favor of supporting countries in need, like Hungary," he said. "But there are a number of countries in central and eastern Europe that are not in need, such as Poland, the Czech Republic, and Slovakia. And there are countries in the euro zone that need help." Hungary, Poland and the Baltic countries of Estonia, Latvia and Lithuania also want the EU to fast-track their bids to join the euro-currency, which could offer them a stable financial anchor. Latvia's government has already collapsed amid the economic fallout. Other EU members, like Sweden, want to coordinate a Europe-wide bailout plan for car producers. Prime Minister Mirek Topolanek of the Czech Republic, which holds the EU presidency, has called on his counterparts to act together. A draft summit conclusion centered a commitment to "make the maximum possible use" of the EU's cherished free market "as the engine for recovery." "We do not want a Europe divided along a North-South or an East-West line, pursuing a beggar-thy-neighbour policy is unacceptable," Mr. Topolanek said. The crisis has sorely tested solidarity among EU nations. The Czech Republic has accused France of trying to protect its local car plants at the expense of foreign subsidiaries, while Germany rejected earlier calls to help bail out economies in Ireland, Greece and Portugal. Sunday's talks are meant to restore a unified purpose and help prepare for the April 2 Group of 20 nations summit in London. Once-booming east European economies have been hit hard by the economic downturn. As cheap credit dried up their export markets shrank, causing eastern currencies to sink and triggering more financial turmoil. Mr. Gyurcsany said eastern EU countries could need up to 300 billion euros, or 30% of the region's gross domestic production this year. He warned that failure to offer bigger bailouts "could lead to massive contractions" in their economies and lead to "large-scale defaults" that would affect Europe as a whole. It could also trigger political unrest and immigration pressures as jobless rates soar, he said. The Associated Press and Dow Jones Newswires contributed to this article. Write to the Online Journal's editors at newseditors@wsj.com Labels: Angela Merkel, bailout, Eastern Europe, European Union, financial crisis, Germany Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). Bleak Picture in Asia, More Gloomy ThoughtsOn Asia, from the Financial Times.. A tidbit:"The figures are further proof that Asia's economy fell off a cliff in the closing months of 2008 and raise the likelihood that the bad news will continue to flow as the region's export-dependent nations are forced to cut jobs and manufacturing capacity because of weak western consumer demand. The collapse in Asian exports over the fourth quarter was "nothing short of breath-taking", said Frederic Neumann, Asia chief economist at HSBC. "Economic models and experience suggest that financial turmoil tends to transmit far more gradually into the real economy than has occurred this time around. In fact, the severity and rapidity of the fall in output exceeds anything we have ever seen before." Ambrose Evans-Pritchard has this to say about the global situation in general, and this on a possible reversal in Germany's view of the EU project. Labels: Ambrose Evans-Pritchard, Asia Times, bailout, European Union, financial crisis, Germany Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). UK Strikes DevelopmentsReaders may not know that workers in Britain joined their comrades in France, Germany and elsewhere in Europe this weekend on the streets, and this time of the wildcat variety. The first of the two Independent on Sunday stories linked to here document the frantic attempts to stop the strikes from spreading across the country, while the second the second chronicles the despicable Peter Mandelson's (UK Business Secretary) outrageous "Let them eat cake" advice (issued, appropriately enough, from his own little Versailles at Davos) to workers. Then, an Observer story reveals that the government was warned four years ago about the likely impact of the implementation of policies that have resulted in this weekend's unrest:Wildcat wildfire: Frantic bids to stop strikes spreading Whitehall crisis team meets, and Acas tries to resolve dispute as Europe joins recession protests. Ian Griggs, Jane Merrick and David Randall report Sunday, 1 February 2009 Independent.co.uk Web Strenuous efforts were being made this weekend by ministers, officials, unions and conciliators to stamp out the wildcat strikes now threatening to become a nationwide protest. Senior civil servants were ordered to an emergency Cobra meeting on Friday to plan the Government's response to the disputes. Police, army and immigration services have been put on alert, and mediators are talking with unions and employers in an effort to resolve the unofficial strikes that erupted at 13 locations last week. And yesterday there were fears that the disputes over the employment of foreign workers at refineries and power stations could spread to other areas. Tom Hardacre, national officer for engineering and construction at Unite, the union, told The Independent on Sunday: "I think it is extremely likely that industrial action could continue on Monday... There is so much frustration in all sectors of industry, it could escalate to other sectors. That is not what we want, but if there is no solution we could be faced with serious problems in terms of industrial unrest." Unite is now calling for a national protest in Westminster. Read the rest of the article You can go and work in Europe, Mandelson tells strikers Unions furious as ministers take aim at Britain's wildcat protesters By Jane Merrick and Brian Brady Sunday, 1 February 2009 Independent.co.uk Web Lord Mandelson enraged unions and Labour MPs last night by accusing wildcat strikers of "protectionism" and claiming they could turn the recession into a full-blown depression. The Business Secretary inflamed the dispute over foreign workers by suggesting that protesters could go and work elsewhere in Europe if they were unhappy. As the mediator Acas was called in to try to prevent more unofficial strikes planned for tomorrow, the peer issued a statement that failed to damp down growing industrial unrest. His support for free movement of workers in the European Union was also at odds with Gordon Brown's 2007 promise to safeguard "British jobs for British workers", a phrase which has been turned against the Prime Minister by protesters. Read the rest of the article Unions: Labour was warned about jobs for foreigners As industrial unrest at foreign-owned companies refusing to hire British workers spreads, it has emerged the government was told in 2004 that EU laws were being used to prevent local people taking up UK jobs The Observer, Sunday 1 February 2009 Jamie Doward, Toby Helm, and Tom Kington in Rome The government was warned five years ago that European laws governing the employment of foreign workers in the UK would result in the current industrial unrest sweeping the country. The revelation comes amid fears that the row is playing into the hands of the far right and claims that similar strikes could affect other key projects. The disruption has come back to haunt the prime minister, Gordon Brown, who in 2007 --in his first speech to the Labour party as its leader--promised to bring in "British jobs for British workers". The former Labour minister Frank Field last night called on Brown to make an emergency statement to parliament tomorrow. Field wants a new law to compel companies operating in the UK to offer contracts to domestic workers first. "We have got to get ahead of this debate rather than react to it," Field said. "Unless we do, we are supplying oxygen to the BNP." Jon Cruddas, the Labour MP for Dagenham, said there was a real risk that "prestige projects", such as the 2012 Olympics, would be hit by similar protests unless ministers acted. At the last count, only 63% of workers on the Olympics site were British. "If the government is planning big infrastructure projects to keep the economy moving--including the Olympics--this needs to be resolved now, because it is in the construction and engineering sectors where these issues are most acute," Cruddas said. Last night the Unite union demanded urgent talks with Brown. It called for the government to ensure contractors on public infrastructure projects agreed to sign new corporate social responsibility clauses that will ensure free access for local labour. "If the government can bail out the banks, it can deliver a level playing field for engineering and construction workers in the UK," said Derek Simpson, joint general secretary of the union. Read the rest of the article Labels: European Union, financia crisis, labor, labor law, Peter Mandelson, United Kingdom Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
