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Posts Tagged ‘Eurozone Crisis’

Not so noble: EU’s Peace Prize win sparks debate over legitimacy

Posted by Ram Kumar Shrestha on December 11, 2012

The European Union’s presidents have received this year’s Nobel Peace Prize on behalf of the 27-member group. However, growing numbers of critics have pointed to the EU’s economic and foreign policy failures, arguing the prize is undeserved.

European Commission President Jose Manuel Barroso, European Council President Herman Van Rompuy and President of the European Parliament Martin Schulz have accepted the 930,000-euro ($1.2 million) award on behalf of the EU.

In his acceptance speech, Van Rompuy praised postwar leaders in France and Germany who created the EU by uniting their economic interests: “The EU’s secret weapon – an unrivalled way of binding our interests so tightly that war becomes impossible.”

The French and German representatives at the ceremony – President Francois Hollande and Chancellor Angela Merkel, respectively – greeted the award with standing ovations.

But critics argued the award was an inappropriate honor. Six EU leaders, including British Prime Minister David Cameron, did not attend the event. The initial news that the European Union won the 2012 Peace Prize sparked heated debate over whether the award was being discredited, a debate that also raged after US President Barack Obama’s win in 2009. Read the rest of this entry »

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Global Economy Faces ‘Perfect Storm’ With Eurozone Crisis, ‘Fiscal Cliff,’ Slowdown, Iran Conflict

Posted by Ram Kumar Shrestha on September 8, 2012

Comment: Global economic crisis we created. We are investing billions and billions dollars in war but lacking money to invest job creating industries. This clearly shows our priority. Due to this every moment we have to survive with fear as any time anywhere anything can happen. We, therefore, creating not only Global economic crisis but also Global Peace crisis. And still we are not ready to change strategy but enjoying to blame others. When to be ready to blame ourselves which is the fundamental of world peace and solution of all problems:

CERNOBBIO, Italy — Experts and leaders gathered in Italy may disagree on the cure, but the malady seems clear: the world economy faces a “perfect storm” of risks that include prolonged crisis in a structurally flawed Europe, political paralysis pushing America off a “fiscal cliff,” a slowdown in the emerging economies drying up the last of global growth, and the spectacularly destabilizing prospect of war over Iran’s nuclear program.

A world of such unpredictable peril is also one in which jitters suppress the appetite for private and corporate risk, yielding meager investment and low consumption and prolonging the woes that snuck up on a booming world in the summer of 2007 as a “credit crunch”, mushrooming a year later into the Great Recession. Read the rest of this entry »

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U.S. Economy Slowed to a Tepid 1.5% Rate of Growth

Posted by Ram Kumar Shrestha on July 28, 2012


The United States economy grew by a tepid 1.5 percent annual rate in the second quarter, losing the momentum it had appeared to be gaining earlier this year, the government reported on Friday.

Growth was curbed as consumers limited new spending and business investment slowed in the face of a global slowdown and a stronger dollar. Several bright spots in the first quarter, including auto production, computer sales and large purchases like appliances and televisions, dimmed or faded away altogether in the second quarter. Growth was not strong enough to drive down the unemployment rate, which has stalled above 8 percent in recent months.

The sluggishness of the recovery makes the United States more vulnerable to trouble in Europe and, at home, the coming expiration of several tax breaks and other buoyant measures known as the fiscal cliff. It also illustrates the election-season challenge to President Obama, who must sell his economic record to voters as the recovery slows. Read the rest of this entry »

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Euro Zone Agrees To Lend Spain Up To 100 Billion Euros

Posted by Ram Kumar Shrestha on June 10, 2012

* Euro zone agrees to lend Spain up to 100 bln euros

* Spain and Eurogroup say bailout will banish any doubts

* Madrid will specify precisely how much after bank audits

* Heated debate over role of IMF in bailout

* Money would be paid by Spain’s bank restructuring fund

By Luke Baker and Julien Toyer

BRUSSELS/MADRID, June 9 (Reuters) – Euro zone finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week.

After a 2-1/2-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts.

“The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total,” a Eurogroup statement said.

Spain said it wanted aid for its banks but would not specify the precise amount until two independent consultancies – Oliver Wyman and Roland Berger – deliver their assessment of the banking sector’s capital needs some time before June 21.

“The Spanish government declares its intention to request European financing for the recapitalisation of the Spanish banks that need it,” Economy Minister Luis de Guindos told a news conference in Madrid.

He said the amounts needed would be manageable, and that the funds requested would amply cover any needs. Read the rest of this entry »

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Why Portugal May Be the Next Greece

Posted by Ram Kumar Shrestha on March 28, 2012

The worst is over for the euro zone, the experts say. But Greece isn’t really fixed and Portugal could become a second big problem before year-end
Getty Images


When Greece celebrated its Independence Day on Sunday, there were scattered protests over the harsh austerity program aimed at stabilizing the country’s finances. The government reportedly removed low-hanging fruit from bitter-orange trees along the parade route, so it couldn’t be thrown by protesters. But, basically, the most recent bailout appears to be successful. As a result, worries about the European financial crisis have diminished somewhat. Indeed, European Central Bank president Mario Draghi has said that the worst is over for the euro-currency zone.

Such optimism may be premature, however. Not only does Greece remain a long-term financial concern, but in addition Portugal is on track to become a second big problem.

The dangers Greece still poses are clear. Higher taxes and government-spending cuts may reduce new borrowing, but such austerity policies also undermine a country’s ability to pay the interest on its existing debt. Unless accompanied by progrowth policies, austerity can become the financial equivalent of a medieval doctor trying to cure patients by bleeding them. In addition, the bailout plan for Greece consisted of marking down the value of much of the country’s debt held by banks and other private lenders. That means entities such as the European Central Bank now hold most of Greece’s remaining debt. And so, in the event of a default, important international institutions would suffer the greatest damage.

(MORE: Is Germany’s Euro-Crisis Strategy Actually Working?)

The net result has been to postpone the Greek financial crisis for months or even a couple of years, while raising the stakes if things go wrong. That could be seen as a considerable achievement, if you believe Greece is a unique case and that the problem has been successfully contained. The trouble is that other countries — and especially Portugal — seem to be heading down the same path. Here’s why forecasters are worried: Read the rest of this entry »

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Eurozone Agrees Second Mammoth £110bn Bailout For Greece After Marathon Talks

Posted by Ram Kumar Shrestha on February 21, 2012

Eurozone governments finally came to the rescue of Greece on Tuesday, approving a second massive bail-out after months of wrangling and a last round of more than 12 hours of talks in Brussels.

Haggling over figures, financial targets and Greek government belt-tightening pledges went on through the night in a last-ditch attempt to rally markets and put crisis-hit Athens back on the path to economic recovery.

But the deal is based on long-range forecasts of Greek’s best-case-scenario debt reduction chances over the next eight years, with some pundits instantly dismissing the deal as undeliverable.

In return for the latest 130bn euro (£110bn) bail-out and a private creditor debt write-off worth about another 100bn euros (£84bn), the Greek government is pledged to implement fully a severe austerity package of pay, pension and jobs cuts, as well as finding savings of 325m euros (£270m) in this year’s national budget.

The deal nearly came unstuck over a requirement on Athens to get the Greek projected debt level down to around 120% of national wealth by 2020.

George Osborne insisted on Tuesday the deal was “good for Britain”, telling journalists: “Of course, resolving the Greek situation is only part of resolving the eurozone crisis but I think we took a really significant step towards that last night and that is good for Britain because resolving the eurozone crisis would be the biggest boost that Britain could get for its economy this year.” Read the rest of this entry »

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Global Economy Slowing Down: World Bank

Posted by Ram Kumar Shrestha on January 18, 2012

The global economy is heading for a slowdown, the World Bank said on Wednesday, as the eurozone’s sovereign debt crisis and weak growth in other major economies weigh on growth.

The bank now predicts that global growth will slow to 2.5% in 2012, down from an estimate of 3.6% from June, with a marked difference between developing and high-income countries, which are forecast to grow at 5.4% and 1.4%, respectively. The eurozone is likely to contract by 0.3%.

Commodity prices have begun to fall back and the growth in global trade is slowing – from 12.4% in 2010 to 6.6% in 2011, with a forecast of 4.7% in 2012, according to the World Bank’s Global Economic Prospects report.

Should the debt crisis in Europe get any worse, no country will be safe from the results, the bank said. At the beginning of the financial downturn it was thought that so-called “decoupling” – a lack of economic links between the global South and the industrialised world – might protect developing countries. Read the rest of this entry »

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All about Eurozone Crisis

Posted by Ram Kumar Shrestha on December 12, 2011

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Eurozone Crisis: Clegg ‘Furious’ At Cameron’s Veto Of European Treaty

Posted by Ram Kumar Shrestha on December 12, 2011

Now UK is facing double problem – internal and external and both of them are very challengin­g. EU will unite in the coming days with new strategies­:

Cabinet tensions over David Cameron’s decision to veto a European Union treaty have burst into the open as it emerged that Nick Clegg was privately furious with the Prime Minister.

Despite publicly backing Mr Cameron, the Liberal Democrat Deputy Prime Minister feels his actions were not in Britain’s best interests and leaves the country isolated in Europe.

A source close to europhile Mr Clegg told The Independent on Sunday that the outcome of Thursday night’s negotiations at the European Council in Brussels had been “a spectacular failure to deliver in the country’s interest”.

“Nick certainly doesn’t think this is a good deal for Britain, for British jobs or British growth,” the source said.

“It leaves us isolated in Europe and that is not in our national interest. Nick’s fear is that we become the lonely man of Europe.”

The source said Mr Clegg “couldn’t believe it” when, on Friday morning, he was informed of the course of events and how Mr Cameron had sought to negotiate with fellow EU leaders.

The future of the coalition is already under scrutiny with Mr Cameron and Mr Clegg facing conflicting demands from their respective backbenchers in the wake of the dramatic veto.

Jubilant eurosceptic Tories have stepped up calls for a full renegotiation of Britain’s position in the EU, only for Liberal Democrat deputy leader Simon Hughes to insist the issue was “not on the table” and that Conservatives should “calm down”.

Read the Article at HuffingtonPost

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UK will be Punished?

Posted by Ram Kumar Shrestha on December 11, 2011

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Silvio Berlusconi To Resign Following Approval Of Austerity Measures

Posted by Ram Kumar Shrestha on November 8, 2011

Silvio Berlusconi will resign as Italian prime minister once austerity measures currently making their way through parliament have been approved, it has been reported.

Earlier on Tuesday he won a vote on the country’s budget but lost his majority in the lower house of parliament.

Tuesday’s vote came as pressure mounted on the embattled leader to resign, with his key coalition partner Umberto Bossi urging the 75-year-old to stand down.

308 deputies voted for the motion, eight short of a required absolute majority of 316, after Italy’s opposition parties abstained and a number of MPs from Berlusconi’s coalition defected.

Yields on Italian 10-year bonds hit euro-era record highs of 6.767% on Monday. Rumours that the prime minister was preparing to stand down saw markets bounce, a clear indication that investors saw the scandal-hit 75-year old as a main block to reform.

Read the Article at HuffingtonPost

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Eurozone Crisis: European Markets Rally As Eurozone Plan Boosts Confidence

Posted by Ram Kumar Shrestha on October 27, 2011

We have to be happy for the agreement, but needs to be careful for the implementa­tion and effectiven­ess:

Europe’s main stock indices fought back strongly on Thursday as markets gave a vote of confidence to eurozone leaders’ “grand plan”.

At close, the FTSE 100 was up 2.98%, the German DAX up 5.35% and the French CAC40 up 6.28%.

The latter two indices have been dragged down by continuing fears over the solvency of the continent’s banking sector, and banks led the recovery as dual measures to cut Greece’s debt by 50% and to pump more than €100bn into recapitalisations buoyed confidence.

The STOXX Europe 600 Banking Index – a composite of bank stocks in Europe – was up 8.92%.

The euro hit a seven-week high of 1.41 against the dollar, with traders forced to unwind bets taken against a deal being reached.

Many traders had been squaring off positions ahead of the summit on Wednesday night, with most having little faith in a comprehensive package, but few willing to go long into such a critical meeting. The plan, while still short on detail, beat their limited expectations.

Read the Article at HuffingtonPost

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