My Business News

The gloomy economic outlook could convince the EU to show some flexibility on deficits of countries like Spain, but the tidal wave of fiscal austerity will continue until the debt crisis will not be overcome.

The European Commission publishes its updated economic forecasts Thursday for 2012 and 2013 for 27 economies of the bloc. According to several sources, they show a significant drop in activity and will spur debate among member states on a revision of targets for this year and next year.

A European official working directly on the case told Reuters on condition of anonymity that the current targets would gradually appear untenable and could be adjusted upon publication of economic forecasts Spring, May 11

"The (European) Commission does not want to look ridiculous by insisting on unrealistic goals and there will be adjustments," he said. 

According to three other sources of high rank, the Commission could allow member states to go beyond a few decimal points their goals for 2012 while keeping unchanged those of 2013, when most European countries promised to return to below 3% under the Stability and Growth.

The EU executive could also decide to defer a year, until 2014, achieving this goal to reflect the change in environment since the publication in November An estimate of the growth was still 0.5% in 2012 and 1.5% in 2013. 

REVISION "SMALL OR VERY SMALL"

For several weeks, several countries, including Italy and Spain have questioned the paradigm of austerity inspired by Germany and called for a shift of policies e ECONOMIC towards less spending cuts and measures to support the growth and fight unemployment.

European leaders have addressed this issue in late January at an informal summit and on Monday, Britain, the Netherlands, Italy, Spain and eight other countries felt that the euro area should try to focus on reactivation of growth in the EU rather than solely on fiscal consolidation. 

Spain is particularly under the spotlight since the new center-right government announced in December that the deficit would reach 8% of GDP or more in 2011, well above the pre ; visions.

If Madrid continues to provide, at least in public, that the deficit will be reduced to 4.4% this year, the threat of a recession makes this task almost impossible.

One source said that Spain and other countries hoped the Commission would show a certain "understanding" while many economies are facing recession in their second three years. This source added, however, that we should not expect a revision other than "small or very small."

According to the Wednesday edition of the newspaper El Pais, the Spanish Prime Minister Mariano Rajoy could request within ten days to review the Community executive from 4.4% to 5% over the current target of deficit reduction.

Rajoy and his economy minister, Luis De Guindos, met with Jose Manuel Barroso, Commission president, and Olli Rehn, Commissioner for Economic and Monetary Affairs, last Tuesday Aftern s that Reuters found that Brussels plans to sanction Madrid for not sufficiently reduce the deficits. 

NO APPETITE NORTH

The economies of both the euro area and EU shrank by 0.3% over the last three months of the year and despite signs of stabilization, analysts questioned ; s by Reuters believe that activity will fall by 0.4% in the euro area in 2012 before recovering to sluggish growth in 2013.

But, with a support plan for 130 billion euros to Greece only adopted and faults are doing day in Portugal, the European Commission and countries whose fiscal position is the most sound estimate that deficit reduction must remain a top priority. 

"Y-Will there a discussion of deficits in the Eurogroup? Perhaps, but there is little or no appetite or sympathy at all for a softening of goals," explained , a European source involved in discussions. "Ask the Belgians, or the northern countries (EU) or the Germans."

Under pressure from the European Commission, Belgium has announced the freezing of € 1.3 billion of expenditures in excess of 11.3 billion euros in savings already announced es. The country has no intention to be flexible with their peers.

Germany, Finland, the Netherlands and Luxembourg are also reluctant to revise downwards the targets because they believe that fiscal consolidation is a precondition for a sustainable growth in the future and that the European crisis is above all a crisis of confidence.

"Review downward targets would be of no help," the source said, adding that it would also undermine the credibility of the new rules on monitoring deficits and debt which the EU has since the crisis began in 2009. 

Under these rules, a country must now submit its budget to advance to the Commission and can be automatically sanctioned and fined in case of deficit greater than 3% of GDP and debt greater than 60% of GDP.

Last month, 25 of 27 Member States have even gone further by agreeing to a rule limiting their deficits to 0.5% throughout the primary cycle.

The Portuguese economy shrank by 1.3% over the last three months of 2011, the country sliding into recession after implemented drastic austerity measures ; authority in exchange for an aid package of International Monetary Fund (IMF) and the European Union.

Economists polled by Reuters had expected an average decline of 1.5% of gross domestic product (GDP) of a quarter over quarter after falling 0.6% in the third ; quarter.

Initial estimates of the National Statistics Institute (INE) released Tuesday, the fourth quarter 2011 GDP fell by 2.7% over the last three months of 2010.

Over the full year 2011, the Portuguese economy shrank by 1.5% following growth of 1.4% in 2010. For 2012, the Portuguese government expects a GDP decline of about 3%, other austerity measures to have a negative impact on the economy.

To achieve its budget deficit and debt provided under the plan of international aid by 78 billion euros, Lisbon has increased taxes, cut spending and decreased wages, measures that have hampered the consumption and investment.

The title Benetton was suspended Thursday in early trading on the Milan Stock Exchange after having risen sharply in early trade, while the Benetton family wants to buy out the minority to remove the group of ready-to-wear Italian coast. The action was set up from 19.7% to 4.85 euros, above the 4.60 euro proposed Wednesday by the family to carry out this operation. The price used represents a premium of 15.6% over the course of last Tuesday, the day the buyout of minority interests was announced. The rating action was suspended until the opening on Thursday.

On 14 November, it had fallen to historic low of 317.90 per euro.

Bond yields, already at a high of two and a half years more than 8% should also be under pressure.

To justify its decision, Moody's described the growing uncertainties about the ability of Hungary to achieve its budgetary targets, the high debt levels and what the rating agency designated as growth prospects in the medium term more mixed.

The Hungarian Ministry of Economy said in a statement that the lowering of the Hungarian sovereign rating to Ba1 by Moody's was part of "financial attacks directed against Hungary."

The UMP, which is now called the "party of the rights and duties", proposes a cap on income-tested benefits, to encourage the RECIPIENT of the RSA to work and to decreasing unemployment benefits. A strategy to capture the voices of lower-middle class. Decryption. The UMP held Tuesday, November 22 its first national convention in Lambeth (North). "We give the kick off of our presidential campaign," he told the Secretary General of the UMP, Jean-Francois Cope.

Tuesday night was held the first of three national conventions of the UMP, which must deliver the program of the presidential party in 2012. This meeting was devoted to economic and social. On the menu include: the end of 35 hours and the introduction of a social VAT renamed "anti-offshoring tax." Above all, the fight against assistantship.

The UK unemployment rate reached during the quarter its highest level for 15 years, while the number of unemployed young adults touched a record high, according to figures released Wednesday by the Office for National Statistics (ONS).

There were 129,000 additional unemployed within the meaning of the International Labour Office (ILO) for the three months to September, bringing the number of unemployed to 2,622,000, the highest level since the quarter July to September 1994.

The unemployment rate stood at 8.3% of the workforce. This is the highest rate since April-June 1996.

The number of unemployed youth has reached 1.016 million, bringing the unemployment rate in this category of 16-24 years, 21.9%.This is the first time the bar is exceeded one million young people since 1992 that such statistics exist.

The government, who are asked to boost growth, is limited in this way by its promise to reduce the budget deficit via an austerity plan that provides for the loss of 400,000 jobs in the public sector.

In this context, the Governor of the Bank of England Mervyn King should draw a portrait of the sluggish economy during the presentation of its quarterly report on inflation expected for 10:30 GMT.

Softbank, a telecommunications operator which is not affected by the rising yen, jumped 8.37% on first half results historic, while the electronics group Sharp and construction equipment manufacturer Komatsu gained 6 respectively, 2% and 5.58% despite the downward revision of prospects for their result.

The surge in the yen to a new record high against the dollar, however, limited the gains.

The Nikkei rose by about 4% since the beginning of the month, while the U.S. S & P has won over 13% and move towards its biggest gain in a month since October 1974.

General Electric announced Friday a 18% increase in quarterly profit, supported among others by its activities in aircraft engines or in health facilities.

The first American industrial conglomerate plans to increase its operating profit per share of a double-digit percentage next year, despite a "volatile global economy," according to CEO Jeff Immelt.

"We sail on a sea of ​​oil in a volatile global economy," he said in a statement.

The group reported a profit attributable to shareholders of $ 2.34 billion (1.7 billion) in the third quarter, or 22 cents a share, against $ 1.98 billion, or 18 cents per share, a year earlier.

This result includes a charge of eight cents per share for the redemption of preference shares sold to the fund of Warren Buffet Berkshire Hathaway during the financial crisis.

Excluding items, earnings totaled 31 cents per share, a level consistent with the consensus analyst forecasts Thomson Reuters I / B / E / S.

The turnover stood at 35.37 billion dollars, higher than the 34.94 billion expected by analysts.

"The turnover was high and the rate of organic growth was strong," said Jack De Gan, Harbor Advisory.

"They give us a preview of the next quarter and beyond."

GE has offset the slowdown in demand in the United States and Europe thanks to its strong presence in emerging markets, including China, Russia and the Middle East.

In early trade, the share was 1.20% while the Dow Jones clinching 1.13%.Since the beginning of the year, action has lost about 9% of its value.

This decline is due to the fear caused by a smaller margin than expected, especially since the benefit has itself been supported by favorable taxation.

"The margins came out below our expectations and are down from one year to another in the four major industry segments," noted Jeffrey Sprague of Vertical Research Partners.

These results furthermore suffer from the comparison with other industrial groups. Honewywell has reported Friday a profit increase of 45%. Caterpillar and 3M, other barometer of the health of American industry, publish next week.

Coca-Cola announced Tuesday a quarterly profit that just beat the consensus, thanks to sales growth throughout the world.

The world leader in soft drinks has reported net earnings of $ 2.22 billion, or 95 cents a share, against 2.06 billion (88 cents a share) a year earlier.

Excluding items, EPS was $ 1.03 compared to the consensus Thomson Reuters I / B / E / S, which gave $ 1.02.

Revenues jumped 45% to 12.25 billion, boosted by the acquisition in 2010 of bottling operations in North America, by price increases and a favorable currency impact. Analysts were expecting a turnover of 12.01 billion.

Volume, worldwide sales increased 5%.In North America, the increase in volume is the same, with the addition of new brands being cross-licensing as Dr Pepper. Leaving aside these brands, sales increased 1% in volume in North America.

In Latin America, volume growth is 7%. It is 2% in Europe, 7% in the Eurasia-Africa segment and 6% in the Pacific region.

The action is down in pre-market.

To address the credit crunch, the Prime Minister announced that local authorities will receive a loan of 3 billion euros. French Prime Minister: Francois Fillon REUTERS / Jacky Naegelen (FRANCE – Tags: POLITICS)

François Fillon said on Friday the release of three billion euros in loans to help local authorities, faced with the difficulties of banks and the drying up of credit offers to wrap their funding for 2011. "The funding needs of communities must be met to enable them to carry out their investments.That's why I decided that the Deposit would set up a budget of three billion euros to fund loans to local authorities between now and the end of the year, "said the Prime Minister at a shift in Richelieu (Indre-et-Loire).

"I ask Baroin and CEO of the Deposit (…) to ensure that the auctions of the corresponding amounts to lending institutions can be initiated within 15 days," said Mr. Fillon. According to a survey conducted in September by several associations of elected representatives, many local authorities face difficulties in borrowing from banks.

"This is almost systematic refusal when the community does not have long-term loans or do not wish to subscribe again," the study said adding that the banks argue the new Basel banking standards 3 with elected officials to justify the shortage. These standards penalize long-term financing that are not backed by stable resources such as bank deposits. "Basically, this means that we can not lend unless the borrower has savings," noted a banker. "But communities spared nothing."

The device will be launched "based on that the government had set up in 2008 and had been able to satisfy the financing needs of communities at the time the bank has showed signs of drying up," said the Prime Minister.

Local governments provide about 75% of public investment civilian.