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Business Report

Posted 13/12/2015

Euro holds gains after surging on ECB stimulus move

The euro held most of its gains last week as the European Central Bank's increased economic stimulus fell well short of market expectations.

Up to yesterday, speculation had swirled for weeks that the ECB would further loosen its grip on monetary policy and ramp up a vast bond-buying programme - effectively pumping cash into the economy - to breathe new life into the euro zone.

Those expectations sharply pushed down the euro, and revived talk that it may soon hit parity with the dollar for the first time since 2002.

The ECB cut deposit rates further into negative territory - meaning lenders must pay to park cash with it and so look to loan more - and extended the length of its bond purchases.

However, the announcement left traders disappointed as it crucially failed to increase the size of the stimulus while the rate cut was less than hoped for.

The news sent the euro soaring 3.1% against the dollar yesterday.

The euro was trading at $1.08 on Friday compared to $1.09 in New York,well above the $1.06 level before the ECB decision.

Meanwhile, US Federal Reserve boss Janet Yellen said yesterday that the Fed remained wary of a interest rate rise because of concerns about a strong dollar and the divergence between its monetary policy and those of other central banks.

While the Fed is still widely expected to lift rates later this month, Yellen's comments caused dealers to ease off a recent run-up in the US unit. Traders are now awaiting the release of key US jobs data later today.

The euro was also worth 71 pence sterling at close of business on Friday.


Zuckerberg responds to critics of his baby-inspired $45bn giveaway

Mark Zuckerberg has taken to Facebook to respond to criticisms of his plans to transfer 99% of his family's stock in Facebook into a limited liability company (LLC) to fund charitable projects.

He said that he and his wife, Dr Priscilla Chan were using a LLC rather than a traditional foundation as it gives them greater flexibility "to pursue our mission by funding nonprofit organisations, making private investments and participating in policy debates in each case with the goal of generating a positive impact in areas of great need."

The post addressed critics who said that he intended to use the LLC to avoid taxes on his stocks worth $45bn.

“In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not. And just like everyone else, we will pay capital gains taxes when our shares are sold by the LLC,” he wrote.

While charitable foundations are tax-exempt, they face restrictions which curb for-profit ventures and the sponsoring of political activities. It is likely that some of the Facebook founder's money will be used for these kinds of projects.


Uber could be worth more than General Motors after its next funding round

Uber is hoping to raise up to $2.1bn in a new round of financing which would value the car hire and ride sharing app at $62.5bn.

Bloomberg reports that the company has filed paperwork in Delaware outlining the fundraising plans. This has been read as an acceleration of Uber's plans to expand into new markets and to diversify its offerings.

In June a letter to investors laid out plans to spend $1bn expanding its operations in China. It is also expected to continue to test new products such as food and package delivery services - and to invest in research to develop self-driving cars.

Quartz points out that if the funding round goes as planned it will give the company a valuation which is higher than the market capitalisation of General Motors - and rank it among bluechip firms.

Uber has high lobbying costs as if faces regulatory challenges in a number of regions. The company is also embroiled in legal battles in a number of European states.

The app is planing to launch a altered version of its controversial Uber Pop service in Ireland - but it will do so under a different name.

UberPop allows casual vetted drivers to use the app to offer people lifts for money - without being a licensed taxi driver. This service has been causing difficulties for Uber across Europe, and provoked aggressive protests in France last summer.



Abengoa on verge of largest bankruptcy filing in Spanish history

Posted 29/11/2015

The renewable energy and engineering company has filed for creditor protection.

Spanish renewable energy company Abengoa on Thursday applied for preliminary protection from creditors and called in lenders to start negotiating the terms of an agreement that would prevent a definitive suspension of payments.

In accordance with Spanish insolvency laws, the company has four months to reach an out-of-court agreement with its creditors.

Abengoa is on its way to becoming the biggest bankruptcy case in Spanish business history – even bigger than the fall of real estate giant Martinsa-Fadesa.

While the Seville-based firm desperately seeks a new deal with its creditors or a new investor to shoulder part of its €8.9 billion of gross financial debt, it is also asking bondholders to group together into a committee to renegotiate the debt.

“The committee is necessary in order to manage our commitments in an efficient manner,” said a company spokesperson.

Meanwhile, shares in the renewable energy and engineering giant continued to plunge, registering losses of up to 25 percent on Thursday – its last day of trading after the Ibex 35’s technical committee decided to take Abengoa out of the blue-chip index.


“Many bondholders are now selling,” confirmed Stuart Stanley, of Invesco Asset Management. “If nobody is willing to intensify their positions, then who’s going to help Abengoa? Right now, the company needs a white knight.”

Additionally, its chief executive stepped down on Friday just two days after the indebted company began insolvency proceedings.

Chairman Jose Dominguez Abascal now takes on an executive role, while outgoing CEO Santiago Seage will continue to be a managing director at U.S. unit Abengoa Yield.

Spanish and international banks' total exposure to Abengoa stands at around 20.2 billion euros, including financing for projects, a source said at the end of September.

The company built up a big debt burden as it took on a number of capital intensive projects.

As well as banks and bondholders, Spain's government also has exposure to Abengoa of about 415 million euros through various state financing bodies. It is keeping a close watch on a group that employs around 7,000 people in the country alone.

"We think that from a business perspective (Abengoa) is viable, that efforts should be made so that this company ... keeps going, and that the errors of the past, especially in relation to its debt, are corrected," Economy Minister Luis de Guindos told a news conference.

De Guindos said Spanish lenders only accounted for about 40 percent of Abengoa's bank debt, and that the company owed "a significant" amount of money to suppliers too.

He added that it would be key to try to find an industrial partner for Abengoa.

Employment Minister Fátima Báñez on Thursday guaranteed that the government would help seek a solution “with a future” for Abengoa and called on all parties involved to “negotiate and dialogue to the point of exhaustion.”

Báñez said that the government “wants to help with that dialogue” and called Abengoa a “very important company, not just because of the number of workers but also because it is one of the most innovative businesses in our territory.”




New €20 notes come into circulation from today

Posted 25/11/2015

The new €20 notes are in circulation here from today.

The third in the 'Europa Series' of banknotes is the same size and is similar in appearance to the existing note.

However it has a number of new security features.

These same features are also present on the Europa Series         €5 and €10, and can be easily checked using the 'Feel, Look and Tilt' method. They include:

    • a portrait watermark of the Greek goddess Europa
    • raised lines along the sides of the note
    • a shiny emerald colour number
    • a portrait hologram of Europa

In addition to these, the new €20 has an additional security feature, known as the portrait window.

When you look at the banknote against the light, the window near the top of the hologram becomes transparent and reveals a portrait of Europa, and rainbow-coloured lines, on both sides of the note.

When the banknote is tilted, rainbow-coloured lines appear around the value numeral and in the window on the back of the banknote.

The existing €20 note remains legal tender, and the new €20 will circulate alongside it.

The total number of €20 banknotes in circulation in the Euro area was 3.2 billion as of the end of October 2015.

Some 18.1 billion banknotes were in circulation with a face value of €1,053.8bn.



The Commission and business leaders partner up to boost youth employment and inclusion in Europe

Posted 17/11/2015

Today the European Commission together with companies launch the European Pact for Youth, a mutual engagement of business leaders and the EU to create a culture of business-education partnerships to improve the chances for young people of getting a job, at the Enterprise 2020 Summit.

Today the European Commission together with companies launch the European Pact for Youth, a mutual engagement of business leaders and the EU to create a culture of business-education partnerships to improve the chances for young people of getting a job, at the Enterprise 2020 Summit.

The Pact, initiated by The European Business Network for Corporate Social Responsibility (CSR Europe), is an appeal to all business, social partners, education and training providers and other stakeholders to develop or consolidate partnerships in support of youth employability and inclusion. Together we will support the creation of 10,000 quality business-education partnerships, with the shared target to establish together at least 100,000 new good quality apprenticeships, traineeships or entry-level jobs.

Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, said:"Our top priority has been to get Europe growing again and to stimulate good quality job creation. I welcome these business-education partnerships leading to 100,000 new youth opportunities. It builds on the successful European Alliance for Apprenticeships. The Commission, together with business, is moving now towards one quarter million new opportunities for young people across Europe. I look forward to many more businesses and associations joining this Pact to boost opportunities for young people in Europe.”

Etienne Davignon, President of CSR Europe said: “with the Pact, our ambition is to deliver a long standing impact for young people’s future jobs and Europe’s sustainable competitiveness. Business-education partnerships are a must! We are confident that this will be a game-changer, much like Erasmus has been over the past 28 years.”

The European Commission will provide technical support to the Pact and assist the participating stakeholders in its implementation. The outcomes of this joint work will be presented at the 1st Enterprise-Education Summit in December 2017.

This initiative has the endorsement of His Majesty the King of the Belgians, and the Presidents of the European Commission, Jean-Claude Juncker, the European Parliament, Martin Schulz, and the European Council, Donald Tusk.

The Pact aims to help build a pro-youth and pro-innovation Europe by creating a fair and equitable culture of partnerships between business, education and young people. These partnerships are designed to enhance the quality of training and skills that young people can acquire, including transversal digital, entrepreneurial, green and soft skills. Examples are initiatives that support non-formal and informal learning, projects that boost apprenticeships or aim to make learning science and technology more attractive. Finally, they will support Europe’s teachers and particularly, equip young teachers with the necessary skills to become leaders in the classroom.



Facebook given 48 hours to change tracking behaviour

Posted 10/11/2015

A Belgian court today gave Facebook 48 hours to stop tracking internet users who do not have accounts with the US social media giant, or risk fines of up to €250,000 a day, a statement said.

The order follows a case lodged by Belgium's privacy watchdog in June which said Facebook indiscriminately tracks internet users when they visit pages on the site, even if they are not members, the court said.

The same applies if non-members click ‘like’ or ‘share’ on a Facebook page, which leaves a ‘cookie’ or internet record on the computer despite them not being signed up to the site, the court said.

"Today the judge ... ordered the social network Facebook to stop tracking and registering Internet usage by people who surf the internet in Belgium, in the 48 hours which follow this statement," the court said.

"If Facebook ignores this order it must pay a fine of €250,000 a day to the Belgian Privacy Commission," it added.

Facebook chief security officer Alex Stamos wrote in a blog post last month that the Belgian Privacy Commission, which filed the complaint, had initially argued incorrectly that Facebook uses the datr cookie to target ads to people who aren’t its users.

The commission subsequently "focused on the fact that we set the datr cookie when someone visits one of our sites, such as, or clicks a Like button on a publisher's website and interacts with the login page that appears," according to Stamos, who added that the company does not set the datr cookie "when someone simply loads a page with a Like button."

A report by technical experts assisting the Belgian Privacy Commission on Facebook tracking through social plug-ins noted that Facebook is in a unique position as it can "link the browsing behavior of its users to their real world identities, social network interactions, offline purchases, and highly sensitive data such as medical information, religion, and sexual and political preferences."

The experts found that when a user not signed on to Facebook visited the social networking site, the datr cookie with a two-year lifetime was set. When they then visited a Web page on, a website that includes a Facebook social plug-in, the inspection of the network traffic revealed that the datr cookie was sent to the domain in the cookie header of the HTTP requests.

If blocked from using the datr cookie, Facebook said it would have to treat visits to its service from Belgium as untrusted logins, requiring a range of other verification methods to establish that people are legitimately accessing their accounts.

Facebook faced a setback in October when the Court of Justice of the European Union, in a complaint against the company, declared invalid a "safe harbour" agreement governing personal data transfers between the European Union and the U.S., as the data was not protected from spying by U.S. agencies.

Facebook claims the controls related to datr have been evaluated and validated many times by the Irish Data Protection Commissioner.          The company has held that it has only one establishment in the EU in Ireland, and that Irish law is applicable to the processing of personal data of all European users, according to a recommendation in May by the Belgian Privacy Commission. The commission asserted jurisdiction, stating, among other reasons, that local processor Facebook Belgium was a permanent establishment in Belgian territory being run by Facebook in the U.S.



Euro zone sentiment rises in October

Posted 29/10/2015

Euro zone economic sentiment improved more than expected in October, mainly driven by stronger confidence in the retail and construction sectors, while the consumer inflation forecast dipped.

The European Commission said the overall economic sentiment rose to 105.9 this month from 105.6 in September, confirming the upward trend started in July and defying market expectations of a minor decline.

A Reuters poll forecast the euro zone economic sentiment at 105.2 points in October.

The Commission's business climate indicator, which points to the phase of the business cycle, also defied market expectations and rose to 0.44 in October from a revised 0.36 in September, while forecasts pointed at a slight decline to 0.32.

Inflation expectations among consumers 12 months ahead dropped to 0.7 in October from 3.2 in September. But selling price expectations in industry improved to -2.4 from -3.3 in September.

Euro zone consumer prices fell by 0.1% in the year in September, dipping below zero for the first time since March.

The European Central Bank wants to keep inflation below, but close to 2% over the medium term and started buying government bonds on the market in February to inject more cash into the economy and make prices rise faster.

The economic sentiment in the euro zone improved mostly in the construction sector raising to -20.7 from -23.2 in September. Retail sector confidence also grew significantly to 6.5 from 4.2.

Sentiment in euro zone industry grew slightly to -2 from -2.3, while optimism dropped in the services sector - the biggest part of the euro zone economy - from 12.4 points in September to 11.9 this month.

Consumer confidence declined to -7.7 from -7.1, confirming the downward trend started in August.



Business Report

Posted 25/10/2015

There's a new name on top of the Forbes rich list

Bill Gates has long been at the top of the world's rich list, but this time around the world's richest person comes from Europe.

Amancio OrtegaAmancio OrtegaForbes have once again issued their list of the richest people in the world, and there's a new name atop the pile.

Spain's Amancio Ortega, founder of the Inditex group that owns clothing brands such as Zara, Pull & Bear and Massimo Dutti, has seen his fortune rise since the last list and is now the richest man in the world.

The magazine values his fortune at $78.6 billion, up an impressive $2.1 billion in the last year, and placing him above Bill Gates on the real time list, who comes in second with a mere $78.1 billion to his name.

The rest of the top five list is rounded out by Warren Buffet, whose multinational company Berkshire Hathaway has interests in a number of fields from insurance to jewelry, Mexican telecoms giant Carlos Slim Helu and Jeff Bezos of Amazon.


The youngest member of the billionaires list is 25-year-old Evan Spiegel, who has a fortune of $2.1 billion thanks to Snapchat, while the oldest is David Rockefeller Sr., who still has $3 billion at the age of 100.

Gates still remains on top of the 2015 overall list, while the top five on that ranking includes Larry Ellison of Oracle in place of Amazon's Bezos.


Twitter CEO announces windfall for his staff 

Twitter's chief executive says he's going to give a third of his shares in the firm to staff - based on their performance. The total value of these shares is close to $200m dollars.Jack DorseyJack Dorsey

Jack Dorsey, the co-founder of the company who became Twitter's permanent CEO earlier in this month, announced the giveaway (predictably) in a tweet.

The company has not offered any other comment apart from his series of tweets - he says that the wants to "reinvest directly in our people."

The CEO added, "I'd rather have a smaller part of something big than a bigger part of something small. I'm confident we can make Twitter big!"

The company has struggled as a new breed of mobile-first social media apps like Snapchat and Instagram who have been eating into its screen-time.

Jack Dorsey announced earlier this month that 8% of the company's staff would be laid off as part of a reorganisation plan to cut costs.



The markets like Mario Draghi’s plans to intensify QE in the euro zone

European and North American stockmarkets responded positively this week to ECB President Mario Draghi’s comments that the bank would expand its current €1.1tn quantitative easing programme and cut the deposit rate at which it lends to retail banks, should the slowdown in emerging markets threaten the eurozone’s economic recovery.

The euro fell by 1.7% against the dollar to $1.11.5 while the price of European government bonds dropped to their lowest levels since the Spring.

Share values on Wall Street were further boosted by strong quarterly earnings reports from three technology industry giants, Microsoft, Google and Amazon.

Microsoft’s shares rose by close to 10% in after-hours trading to just under $53, their highest levels in 15 years, boosted by growing demand for its cloud-based products and better than expected sales of Windows 10 software to computer makers.

Google’s new parent company, Alphabet reported a near 50% jump in third quarter profits compared to the same period last year.


EU Ruling On ‘Sweetheart’ Tax Deals

Posted 21/10/2015

The European Union has ruled that 'sweetheart' tax deals between multinational companies and Member States are unlawful.

The European Commission finding means coffee company Starbucks and car maker Fiat will have to pay as much as €30m each in back taxes to Netherlands and Luxembourg.

The Commission's statement said it had found, during a year-long investigation into the two tax rulings, that “most of the profits of Starbucks coffee roasting company are shifted abroad, where they are also not taxed, and Fiat's financing company only paid taxes on underestimated profits.”

Fiat insisted its dealings merely amounted to a clarification of pricing rules and did not constitute state aid.

The Dutch government expressed "surprise" at the ruling, saying it was convinced its handling of Starbucks tax was in line with international standards. Starbucks immediately said it would appeal, echoing the Dutch government in accusing the European Union executive of significant "errors" in its assessment.

Its statement added: “Starbucks complies with all OECD rules, guidelines and laws and supports its tax reform process.”

“Starbucks has paid an average global effective tax rate of roughly 33% - well above the 18.5% average rate paid by other large US companies.”

The reforms outlined earlier this month by the OECD aim to close international loopholes which allow multi-nationals to shift profits to countries with the cheapest tax regimes.

The EU warned it was still investigating tax practices in all of the bloc's 28 nations.

It is likely to increase the pressure on companies like Apple - which have been the focus of international scrutiny over the use of tax structures like “the Double Irish.”

Luxembourg, where much of the economy has been built on attracting multinational firms, said it disagreed and reserved its right to appeal.

Fiat denied receiving any aid from the Luxembourg state.

Commissioner Vestager, who has denied accusations of anti-American bias in launching other tax probes into Apple and Amazon and competition inquiries into Google, took care to avoid intruding on EU governments' jealously guarded rights to set their own tax rates.

The issue, she stressed, was firms being treated differently within the same national system.



Deutsche Bank just announced a dramatic overhaul

Posted 18/10/2015

The structural changes follow the appointment of John Cryan as co-CEO earlier this year. He replaced Anshu Jain, who had helped build the investment banking units over the course of two decades.

The corporate banking and securities division will be replaced by two units: corporate and investment banking and global markets.

The bank is already considering cutting 8,000 jobs, in addition to those that will be eliminated through the sale of one of its consumer bank units, a person with knowledge of the matter said last month. Deutsche Bank announced plans in April to divest Bonn-based Deutsche Postbank AG, which employs about 15,000, through a trade sale or by selling shares to the public.

A number of executives who worked closely with Jain will exit as part of the changes as well.


Colin Fan, who had been co-head of the corporate banking and securities division, will leave, as will Michele Faissola, head of Deutsche asset and wealth management. Stefan Krause, a long-term management board member, will also exit, while Stephan Leithner, CEO for Europe, is leaving to take a role in the private equity industry. 



Volkswagen to recall 8.5 million vehicles across EU

Posted 15/10/2015

Volkswagen will recall 8.5 million vehicles across the European Union following the emissions cheating scandal.

Customers in 28 member states will be contacted over the coming months if it is believed their vehicle is fitted with a device designed to rig emissions tests.

Some 2.4 million of the vehicles being recalled are in Germany.

A statement from the company said: "Remedial action on the vehicles will begin in January 2016 - at no cost to our customers.”

"The technical solutions can involve software as well as hardware measures. These are currently being developed for each affected series and each affected model year.”

"All measures will first be presented to the responsible authorities. Volkswagen will subsequently inform the owners of these vehicles over the next weeks and months."

The statement added that all vehicles "remain technically safe and roadworthy."

The recall was ordered by the Federal Motor Transport Authority following a plan submitted by VW.

The company has been in turmoil since admitting last month its 2009 to 2015 models were hiding their true level of emissions from US regulators.



The European announcement follows a claim from VW's UK boss that it is "implausible" and "absolutely inconceivable" that the company deliberately tried to mislead people over its emissions cheating software.

But Paul Willis told MPs on the Commons Environmental Audit Committee: "I can speak for the whole group when I can say Volkswagen is deeply sorry.”

"Since last weekend we've started to send personal letters to each and every affected customer.

"Constant communication will be ongoing throughout the remedy process."

Mr Willis said he did not think more revelations would emerge over devices fitted to an estimated 11 million diesel vehicles.

The head of the UK car industry body the SMMT, Mike Hawes, also told MPs he had had assurances that other carmakers were not involved.

It comes as a survey found nine out of 10 Volkswagen drivers in the UK whose vehicles could be affected think they should get compensation.

Elsewhere, Italian authorities have searched the headquarters of Volkswagen Italia as part of a local investigation into the emissions testing scandal.



Business Report

Posted 11/10/2015

Brewing beer merger

Anheuser-Busch InBev's initial attempt to buy SAB Miller has been informally rejected

Anheuser-Busch InBev, the world’s largest brewer, has made a formal £68bn (€92bn) bid for its smaller rival, SAB Miller, mainly in cash.

It has emerged that SAB has already turned down two previous informal offers over the past month.

SAB Miller has officially turned down the offer but doing so could be facing a split amongst its shareholders and board.

Its largest shareholder, the giant tobacco group Altria, has signalled its acceptance of the Anheuser Busch offer, but the views of the next largest shareholder remain unclear - that’s the wealthy Santo Domingo family of Columbia.

SAB Miller called on the UK mergers and takeover regulator to intervene yesterday when Anheuser Busch either incorrectly or prematurely suggested that they expected to have the family’s support.

Big stakes are at play here - a merger would combine the owners of over 400 beer brands including Budweiser, Miller, Stella Artois, Corona and Grolsch. It would see the group brew one in every three beers sold worldwide.

Regulators have set a deadline of this week for a successful bid or the parties will have to take a minimum six-month break.

Earlier this week The New York Post published a story which indicated that the deal may be in doubt - this led to a dip in SAB Miller's share price.

Anheuser-Busch InBev is a publicly traded company (Euronext: ABI) based in Leuven, Belgium, with American Depositary Receipts on the New York Stock Exchange (NYSE: BUD). It is the leading global brewer, one of the world's top five consumer products companies and recognized as first in the beverage industry on FORTUNE Magazine's "World's Most Admired" companies list. Beer, the original social network, has been bringing people together for thousands of years and our portfolio of well over 200 beer brands continues to forge strong connections with consumers.


Drumm in custody in Boston ahead of court hearing

Former Anglo Irish Bank CEO David Drumm has been arrested in the United States on an extradition warrant.

The Irish Government had requested his return to Ireland to face criminal proceedings. Mr Drumm has been living in the US since 2009.

He filed for bankruptcy in Boston with debts of €10.5m - mostly owed to the former Anglo Irish Bank.

His bankruptcy application was rejected earlier this year with the presiding judge finding that he had "knowingly and fraudulently" sought to keep assets from his creditors by transferring cash and other property, worth around one million euros, to his wife.

His appeal against that ruling is currently before the US courts.

In January of this year, the Director of Public Prosecutions in Ireland sent a file to the US authorities requesting Mr Drumm's extradition, to face up to 30 charges following a joint investigation by the Garda Bureau of Fraud Investigation and the Office of the Director of Corporate Enforcement.

That file was assessed by the US Department of Justice and an extradition warrant was issued.


US Marshals arrested Mr Drumm in Massachusetts late yesterday.

He is currently in custody in Boston where he will remain until a court hearing on Tuesday.




Business Report

Posted 06/10/2015

European court online data ruling welcomed

A ruling by the EU's highest court which found that a system enabling data transfers from the European Union to the United States by thousands of companies is invalid.

However, the European Commissioner with responsibility for data protection has said that transatlantic data flows can continue despite the ECJ ruling.

Vera Jourova said “there are other safe guards in place,” pointing to standard data protection between companies or building corporation protection.

The Commissioner acknowledged that Safe Harbour is invalid, however she added that there were clear rules for international transfers and “they are valid and apply.” The EU plans to press ahead with efforts to revamp transfers of personal data to the US, European Commission Vice President Frans Timmermans said today.       

"We have been working with the US authorities to make data transfers safer for European citizens. In the light of the ruling, we will continue this work towards a new and safe framework for the transfer of personal data across the Atlantic," Mr Timmermans told a news conference earlier today. 

"We will come forward with clear guidance for national data protection authorities on how to deal with data transfer requests to the United States in the light of the ruling," he added.

The ECJ ruling relates to a case brought to the Irish High Court by Austrian citizen Max Schrems over the transfer of data to the US by an Irish subsidiary of Facebook.

In a statement, a spokesperson for Facebook said the case is not about the social media giant, but "what is at issue is one of the mechanisms that European law provides to enable essential transatlantic data flows.

"Facebook, like many thousands of European companies, relies on a number of the methods prescribed by EU law to legally transfer data to the US from Europe, aside from Safe Harbour.

"It is imperative that EU and US governments ensure that they continue to provide reliable methods for lawful data transfers and resolve any issues relating to national security."

So what is Safe Harbour?

In 1998 the EU brought in a data protection directive which prohibits the transfer of personal data to non-EU countries that don’t meet its adequacy standard for privacy protection. That posed a problem for the US, as it takes a different approach to privacy. So in order to bridge the differences, the two blocs developed a framework in 2000 known as “Safe Harbour,” a streamlined system that would enable US based companies to comply with the directive. In effect it allows US companies to move data from the EU to the US and store it there, provided they self-certify that the data has the same protections as it would if it were left in the EU.Michael O'Leary takes time to check in flyers in LondonMichael O'Leary takes time to check in flyers in London


Ryanair challenges Google

Ryanair has challenged the global search engine giant Google, to enforce greater transparency in its online advertising policies, to prevent the airline’s customers being misled into buying their flights from so-called 'screen scraper' sites.

These sites take information from the airline's website and providing it to customers on secondary sites, while charging additional fees.

According to Ryanair’s chief marketing officer, Kenny Jacobs, websites such as eDreams are paying Google to have their ads ranked above the airline’s own site.

He said this leads to customers paying higher hidden charges, and to Ryanair missing out on significant amounts of valuable customer data.

It also claims that these sites breach Ryanair's intellectual property rights, and that it breaks the terms of use of Ryanair's website

A German court ruled recently that eDreams had been using an unlawful subdomain and was misleading customers into thinking that it had an official partnership with Ryanair.

These sites have argued that ultimately they forward customers on to Ryanair's site to buy tickets.





Euro zone business activity slows in September

Posted 05/10/2015

Euro zone business activity weakened last month as new orders came in at a slower pace than first reported and fewer jobs were created.

This is despite services firms raising prices for the first time in four years. The data point to modest third-quarter growth and, coming six months after the European Central Bank launched its €60 billion a month quantitative easing programme, are likely to disappoint policymakers.

Markit's final September Composite Purchasing Managers' Index (PMI) came in at a four-month low of 53.6 and weaker than an earlier estimate of 53.9. In August, it was 54.3.

The index has been above the 50 mark denoting expansion since July 2013.

"The final PMI reading came in slightly below the earlier flash estimate but still leaves a signal of the euro zone economy having expanded 0.4% in the third quarter," said Chris Williamson, chief economist at survey compiler Markit.

"However, the failure of the economy to pick up speed over the summer will be a disappointment to the ECB, especially with job creation sliding to an eight-month low," he added.

The PMI for the dominant service industry dipped as well, settling at 53.7 from August's 54.4 and lower than a flash estimate of 54.

A similar survey of manufacturing firms released last week had also fallen, to 52 from 52.3.

Cooling new business orders, which came in much weaker than the flash reading, led firms to take on staff at the slowest pace since January.

But in one piece of bright news, the service sector PMI showed firms charged higher prices last month for the first time since August 2011.

Several ECB policymakers, led by President Mario Draghi, have publicly hinted the €1 trillion stimulus programme could be increased or extended if inflation is seen failing to meet the central bank's near 2% target.

Those calls grew louder last week after official data showed euro zone inflation slipped below zero again in September.

An earlier composite PMI from Germany, Europe's number one economy, fell to 54.1, weaker than a flash estimate of 54.3 and lower than August's 55.

Meanwhile, France's composite reading rose to 51.9, a three-month high, and pointed to 0.2% growth in the third quarter, according to Markit.

Euro zone retail sales were unchanged in August from July as consumers filled up their cars with more petrol and diesel, but spent less on non-food products such as clothing, books and electrical goods.

The European Union's statistics office Eurostat said retail sales in the euro zone was unchanged during August for a 2.3% year-on-year increase.

Economists polled by Reuters had expected a 0.1% monthly decline and a 1.8% annual increase.

The weak reading in what for many is a holiday month followed a strong performance in July, when sales only fell for computer equipment and books.

July's expansion was also revised up to 0.6% on a monthly basis and 3% year-on-year.

Sentiment in the euro zone's retail sector has risen steadily since June, with a pick-up in the views of both present and future sales.

However, consumer confidence, as measured by the European Commission's monthly economic sentiment survey, has weakened over that time.

The volume of broadly cheaper automotive fuel sold rose by 1.8% during the month, while sales of food, drinks and tobacco also grew 0.8%. However, non-food product sales declined by 0.3%.

Retail sales in the euro zone's biggest economy Germany were down 0.4% month-on-month in August and were 0.3% higher in the second biggest France.

In the 28 countries of the European Union, sales were also flat in August month-on-month and up 2.6% from a year earlier.



The EC unveils Action Plan for Capital Markets Union

Posted 30/09/2015

The European Commission is launching the Capital Markets Union (CMU) Action Plan today to help build a true single market for capital across the 28 EU Member States.

The CMU is considered a key pillar of the greater European Union Investment Plan, which aims to tackle investment shortages head-on by increasing and diversifying the funding sources for Europe’s businesses and long-term projects. The first and most urgent steps in that Plan were also published today, such as relaunching sound securitisation markets.

Alternative sources of finance, complementary to bank-financing - including capital markets, venture capital, crowdfunding and the asset management industry - are more widely used in other parts of the world, and should play a bigger role in providing financing to companies that struggle to get funding, especially SMEs and start-ups.

Having more diversified sources of financing is good for investment and business but is also essential to financial stability, mitigating the impact of potential problems in the banking sector on companies and their access to finance. For this reason, CMU is also an important part of the work on the completion of the European Economic and Monetary Union.

The Commission also wants to break down barriers that are blocking cross-border investments in the EU to make it easier for companies and infrastructure projects to get the finance they need, regardless of where they are located.

The Commission's overall goal for CMU is to create opportunities for investors, connect finance to the wider economy, and foster a more resilient financial system, with deeper integration and more competition. Our approach will be pragmatic, step-by-step, based on rigorous economic analysis and mindful of financial stability risks.

The CMU is a medium-term project but with some important early initiatives. The Commission today unveiled just a first set of measures to relaunch high-quality securitisation, and to promote long-term investment in infrastructure.

In addition, the Commission will announce proposed changes to the Prospectus Directive before the end of the year, with a view to making it easier and less expensive for small and medium-sized companies to raise capital. The Commission has also started two consultations on Venture Capital Funds and on Covered Bonds.

Financial industry trade bodies generally welcomed the CMU plans with the British Bankers' Association defined as "pragmatic" and with clear deadlines.

Some critical voices raised their concerns about the capacity of the action to persuade consumers in Continental Europe, long accustomed to squirreling away cash in a deposit account, to invest in riskier shares and bonds.

Burkhard Balz, a senior German member of the European Parliament, said banks should continue to play a central role in funding smaller companies and called on Hill to act faster.

"We do not want to Americanise businesses' access to finance. The desired results will not be reached if we act at a snail's pace," Balz said.

Hill said there was no intention of "copying and pasting" the U.S. system onto Europe.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness said: "The most important part of the Investment Plan for Europe is removing obstacles to investment by deepening the single market. During my roadshows, I have heard many times that insurers struggle to invest in infrastructure projects, so I hope that with the amendment to the Solvency II delegated regulation they will have the right incentives for sound investments."

However, insurers are less optimistic, while welcoming the plan as a step in the right direction, Insurance Europe, the sector's main lobbying group, warned that "these changes are not enough to remove the barriers to investment by insurers," as capital charges remain too high.

Monique Goyens, director general of The European Consumer Organisation, said there was a need to restore consumer trust in financial services first if Hill wanted people to open their wallets to help build a CMU.


Commissioner Jonathan Hill, responsible for Financial Stability, Financial Services and Capital Markets Union said: "I want the Capital Markets Union to help European businesses, and our SMEs in particular, have a wider range of funding sources. I want it to give SMEs more options for investing their money. I want to knock down barriers to make it easier for capital to flow freely across all 28 Member States."

At this moment, Hill's action plan fails to specify concrete targets for measuring whether CMU reforms are successful, but no doubt the European Commission will furnish them in the middle and long terms.  



Business Report

Posted 28/09/2015

Former Volkswagen chief executive investigated on fraud allegations

German prosecutors today launched an investigation into former Volkswagen boss Martin Winterkorn over the rigging of vehicle emissions tests.

The move comes as the carmaker suspended three top engineers in an attempt to tackle the crisis.

The investigation into Mr Winterkorn, who quit on Wednesday after almost nine years at the helm of Europe's largest car-maker, is into "allegations of fraud in the sale of cars with manipulated emissions data," the prosecutor's office said.

German media said that Mr Winterkorn was demanding his salary for the rest of his contract through the end of next year but the board did not want to pay it.

Mr Winterkorn was paid €16m last year, the most of any CEO in Germany's blue chip DAX index.

Volkswagen, which has admitted to cheating diesel emissions tests in the US, is under huge pressure to get to grips with the biggest business scandal in its 78-year history.

It named company veteran Matthias Mueller on Friday as chief executive and agreed to appoint a US law firm to conduct a full investigation.

Sources familiar with the matter said today it had also suspended the heads of research and development at its core VW brand, luxury division Audi and sports car maker Porsche.

But the crisis shows no sign of dying down.

Two German newspapers said on Sunday that Volkswagen's own staff and one of its suppliers had warned years ago about the illegal use of so-called "defeat devices" to detect when a car was being tested and alter the running of its diesel engine to conceal their emissions of toxic nitrogen oxides.

Environmental campaign group Transport & Environment published new data showing that some new Mercedes, BMW and Peugeot cars use 50% more fuel than laboratory tests show, saying this was evidence of a wider industry problem.

T&E, which works closely with the European Commission, said its data did not prove other firms were using defeat devices.

But it said the gap between lab results and road performancehad grown to such an extent for emissions of both carbon dioxide and nitrogen oxides that further investigation was needed to discover what carmakers were doing to mask emissions.

ACEA, the European Automobile Manufacturers' Association, which represents top car makers, has said there is no evidence the use of defeat devices is an industry-wide issue. In a statement today, it said it supported the development of updated testing.

US and European regulators have said they are working on tighter rules.


Apple reports record sales of iPhone 6s, 6s Plus in first weekend

Apple said today it sold more than 13 million iPhone 6s and 6s Plus during the first weekend on the market, a new record for the product.

The company improved its previous record of 10 million iPhones sold in the first weekend of 2014, benefiting from the inclusion of the Chinese market, where the gadget's debut was delayed last year by regulatory issues.

Analysts had expected the company to sell 12 million to 13 million phones during the first weekend.

"Sales for iPhone 6s and iPhone 6s Plus have been phenomenal, blowing past any previous first weekend sales results in Apple's history," Tim Cook, Apple's chief executive, said in a statement.

"Customers' feedback is incredible and they are loving 3D Touch and Live Photos, and we can't wait to bring iPhone 6s and iPhone 6s Plus to customers in even more countries on October 9," he said.

Apple said the new iPhones will be available in more than 40 additional countries - starting October 9, reaching more than 130 countries by the end of the year.

The company relies heavily on the sale of its flagship iPhones, which generated nearly two-thirds of its revenue in the latest quarter.


Qatar to invest $35bn in US over next five years

Qatar plans to invest $35bn over the next five years in the United States, as the energy-rich Gulf state diversifies its global stakes, its sovereign wealth fund has said.

The Qatar Investment Authority revealed its US investment plans in a statement announcing the opening of an office in New York.

The office "will enable QIA to develop and expand its global investment portfolio, with the State of Qatar having committed to investing $35bn in the United States of America over the next five years," it said.

QIA said it also "remains committed to its investments in Europe, Asia and the Middle East," while the New York office "facilitates access to significant investment opportunities."

Qatar's portfolio - valued at between $256bn and $334bn - includes significant stakes in British supermarket chain Sainsbury's and the London Stock Exchange, as well as owning Harrods department store and the Shard skyscraper in the capital.


Source: AFP




Draghi says too early to decide on further stimulus – ECB

Posted 23/09/2015

The European Central Bank needs more time to assess if it will have to beef up its €1 trillion plus asset-buying programme, ECB President Mario Draghi said.

His comments confounded some expectations that the bank was ready to expand quantitative easing.

Mr Draghi made his comments at the European Parliament's Committee on Economic and Monetary Affairs.

He said the bank was ready to act but needed more evidence to see if the emerging market slowdown, the euro's firming and the fall in commodity prices would hijack inflation from its projected path.

"The asset purchase programme has sufficient in-built flexibility," Draghi said in prepared remarks.

"We will adjust its size, composition and duration as appropriate, if more monetary policy impulse should become necessary," he said.

"More time is needed to determine in particular whether the loss of growth momentum in emerging markets is of a temporary or permanent nature and to assess the driving forces behind the drop in the international price of commodities and behind the recent episodes of severe financial turbulence," Draghi said.

Draghi said it will take somewhat longer than previously anticipated for inflation to stabilise around the ECB's target of just under 2%.

His comments come after the US Federal Reserve left rates on hold last week on concerns about China's economic slowdown, renewed financial market volatility and sluggish inflation at home.

Though the Fed left open the door to a hike later in the year, particularly as the US economy approaches full employment, its decision raised concerns that the emerging market slowdown, led by poor industrial demand in China, could have a bigger impact on advanced economies than earlier seen.

PMI data today showed activity in China's factory sector unexpectedly shrank to a six-and-a-half year low in September, just the latest in a string of weak data for the world's second-largest economy.


Chinese factory output sank to its lowest since the global financial crisis and soft orders suggested more weakness ahead, reinforcing expectations that growth could dip below dip below 7% for the first time since the global crisis. That could trigger more monetary and fiscal stimulus.

China's slowdown has depressed global commodity prices, a particular worry for the ECB as inflation, now at a barely visible 0.1% could miss the bank's target of almost 2% for years to come.

Europe appears relatively resilient for now, however, with September PMI data showing only a small drop from relatively high levels, indicating that emerging market weakness is not derailing the euro zone's slow but steady recovery.

Meanwhile euro zone business growth slowed this month as Asian demand weakened, a survey showed today.

This resulted in fewer new jobs and also forced factories to reduce output, even though companies raised prices for the first time in over four years.

The slowdown came amid debate on whether the European Central Bank should expand its stimulus programme to have more impact on inflation and growth.

Markit's Composite Flash Purchasing Managers' Index, based on surveys of thousands of companies and considered a good guide to growth, came in at 53.9 in September, down from 54.3 last month.

A Reuters poll had predicted a dip to 54.1.

The headline index has been above the 50 level that separates growth from contraction since the middle of 2013.

"Exports are under pressure from Asia and that has lowered overall demand. Even in the US, there is a fair amount of import substitution," said Chris Williamson, chief economist at survey compiler Markit.

Fears of China's economy cooling rapidly, coupled with authorities there devaluing the currency, spooked financial markets last month. Stocks and commodities both fell.

Williamson said the PMI pointed to third-quarter euro zone GDP growth of 0.4%, similar to the consensus from a Reuters poll of economists earlier this month.

"This isn't runaway growth by any means and suggests the ECB is going to be a little disappointed with the results it's getting from its quantitative easing programme," Williamson said.

Today's PMI shows that the employment sub-index came in at an eight-month low.

But there were signs that business growth could pick up speed, Williamson added. Backlogs of work rose to the highest since mid-2011.

A manufacturing PMI fell to 52, matching expectations but down from 52.3, as export orders growth slowed. The sub-index measuring factory output, which feeds into the composite PMI, fell to a four-month low as a result.

The euro zone's dominant service industry PMI dipped to 54 from 54.4 last month. Economists had predicted a reading of 54.2.

Service companies were able charge higher prices for the first time in over four years, suggesting disinflationary pressures may be ebbing in the euro zone.

That will be welcome news to ECB policymakers struggling to get inflation close to its target of just below 2%. It was 0.1% in August.


Source: Reuters




Volkswagen shares plunge on US emissions scandal

Posted 21/09/2015

Volkswagen shares tumbled more than 20% today, their biggest ever one-day fall, as the German car maker was plunged into turmoil by accusations from US authorities that it falsified emissions data.

The US Environmental Protection Agency said that Europe's biggest car maker used software for diesel VW and Audi branded cars that deceived regulators measuring toxic emissions.

The agency said the company could face up to $18 billion in penalties.

The scandal has emerged just as VW was hoping to move on from a damaging leadership battle, with a supervisory board meeting on Friday due to discuss a new company structure and management line-up.

Some analysts said CEO Martin Winterkorn, who said on Sunday he was "deeply sorry" for the breach of US rules and ordered an external investigation, should quit.

Winterkorn recently saw off a challenge to his authority with the ousting of long-time chairman Ferdinand Piech.

He ran the VW brand between 2007 and 2015, including the six-year period when some of its models were found violating US clean air rules.

"We do not and will not tolerate violations of any kind of our internal rules or of the law," Winterkorn said, adding that the company was fully cooperating with the relevant agencies.

He gave no details on who would carry out the external investigation.

A source close to the company said any decision on emissions control mechanisms would have been taken at the group's Wolfsburg headquarters, and not by regional divisions.

VW overtook Japan's Toyota in the first half of this year to become the world's biggest carmaker by sales, but is facing a sharp slowdown in its most profitable market, China.

The US scandal also adds to the challenge it faces in reviving its North American business, which has long lagged its performance elsewhere.

The scandal will be discussed at Friday's 20-member supervisory board meeting, a source close to the board said.

Some analysts have long criticised VW's centralised management system, saying it has delayed product launches and hampered its ability to compete in overseas markets.

The US Environmental Protection Agency (EPA) said on Friday the software deceived regulators measuring toxic emissions, adding that Volkswagen could face fines of up to $18 billion as a result.

Cynthia Giles, an enforcement officer at the EPA, said the cars in question "contained software that turns off emissions controls when driving normally and turns them on when the car is undergoing an emissions test."

The feature, which the EPA called a "defeat device," masks the true emissions only during testing. When the cars are on the road, they emit as much as 40 times the level of pollutants allowed under clean air rules meant to ensure public health is protected, Giles said.

"We have admitted to it to the regulator. It is true. We are actively cooperating with the regulator," a Volkswagen spokesman said.

Volkswagen could face civil penalties of $37,500 for each vehicle not in compliance with federal clean air rules.

Some 482,000 four-cylinder VW and Audi diesel cars sold since 2008 are involved in the allegations. If each car involved is found to be in noncompliance, the penalty could be $18 billion, an EPA official confirmed

German rivals Mercedes-Benz and BMW said today that the accusations made by US authorities against VW did not apply to them.



Europe takes action to help 12 million long-term unemployed get back to work

Posted 17/09/2015

The European Commission has today proposed guidance to Member States to better help long-term unemployed return to work.

The European Commission has today proposed guidance to Member States to better help long-term unemployed return to work. Following the relaunch of the Youth Employment Initiative in May, this is another concrete initiative in the context of the broader economic and social agenda of the Juncker Commission, which seeks to strengthen job creation, economic recovery and social fairness in Europe.

In Europe there are more than 12 million people who have been unemployed for over a year. Despite the economic recovery and signs of improvements in the EU labour market, their number doubled between 2007 and 2014, accounting for about half of the total number of unemployed.

The Investment Plan for Europe has the potential to create millions of new jobs. But even when new jobs are created it is often very difficult for long-term unemployed to successfully re-enter the job market.

Therefore the proposal for a Council recommendation presented today foresees that all jobseekers who have been jobless for more than 12 months receive an individual assessment and that they receive a job integration agreement, offering them a concrete and personalised plan back to work before reaching 18 months of unemployment.

The proposal looks into the services that are offered to long-term unemployed to help them to re-enter the labour market and proposes specific actions to strengthen them. It draws on best practices gathered by Member States.

Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labour Mobility, commented: "Long-term unemployment is one of the most difficult and acute challenges caused by the economic crisis, affecting more than 12 million people in Europe. It exposes an increasing part of our population to the risk of poverty and social exclusion. We must act to bring them back to work. We cannot settle for an economic recovery that leaves so many Europeans behind. I am confident that today's proposal will make a difference for them with the full support of Member States, social partners and employers."

It puts forward three key steps:

  • Encourage the registration of long-term unemployed with an employment service;
  • Provide each registered long-term unemployed with an individual in-depth assessment to identify their needs and potential at the latest at 18 months of unemployment;
  • Offer a job integration agreement to all registered long-term unemployed at the latest at 18 months.

The job integration agreement should consist of a tailor-made plan to bring the long-term unemployed back to work. 

Depending on the existing services in each Member State it can include: mentoring, help with the job search, further education and training as well as support for housing, transport, child and health care services or rehabilitation. It should be delivered through a single point of contact to ensure the continuity and consistency of the support. It should also clearly outline the rights and responsibilities both of the unemployed and of the organisations providing support.

The proposal also calls for the active involvement of employers through partnerships with the public authorities, enhancing the range of services they can receive, as well as offering them targeted financial incentives.

Member States can implement these recommendations with the support of the European Social Fund.

The Commission's proposal will now be submitted to the Council for discussion and adoption. The implementation of the measures outlined in the Recommendation will start as soon as Member States reach an agreement.



Business Report

Posted 15/09/2015


OECD praises Ireland for broad robust economic recovery

The OECD says there is a broad-based and robust recovery underway in Ireland, but there are still risks to the economy.

It says rising property prices pose a risk and has recommended that home buyer subsidies need to be avoided.

It is warning the budget deficit remains too large and that efficiency needs to improve in health spending.

The OECD also says more supports should be provided for disadvantaged schools - saying that in Ireland, a person's level of education is still tied to their social background.

The survey was presented in Dublin today by OECD Secretary-General Angel Gurría and Finance Minister Michael Noonan.

It projects Irish GDP will grow by 5% in 2015 and 4% in 2016, and that the Irish economy is on "a sounder footing than before the crisis."

"Unemployment is falling, the fiscal deficit continues to narrow, public debt is on a downward path, the banking sector has been restructured and recapitalised and the public administration has become more efficient" it adds.

"Ireland is the 'comeback kid' of Europe's crisis-hit economies, and much of the credit for this strong recovery goes to the government's steadfast commitment to reform," Mr Gurría said.

"To avoid repeating past mistakes, now is the time to build resilience against future nasty surprises while ensuring the recovery is sustained, and its benefits broadly shared," he added.


*The Organisation for Economic Co-operation and Development (OECD) (French: Organisation de coopération et de développement économiques, OCDE) is an international economic organisation of 34 countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices and coordinate domestic and international policies of its members.


The OECD says to make growth more inclusive, Ireland's top priority should be further reducing the still-high levels of post-crisis unemployment - particularly for youth and the long-term unemployed.

It adds that the government should continue with plans to improve the apprenticeship system and other forms of training.

"Remaining unemployment traps should be eased, for instance by slowing the withdrawal of housing and family income supplements as income increases," it says.

However it also cautions that relative to the average wage, Ireland has the highest child care costs in the OECD - "so improving affordability is essential, particularly for low-income families," it says.

The survey also suggests Ireland moves for further reforms to increase productivity, particularly among small and medium-sized enterprises (SMEs), which it says is the key to raising living standards over the long-term.

It concludes, "in order to achieve this goal, public support for innovation should be rebalanced in favour of direct supports, which are more relevant to smaller firms than the tax incentives that currently predominate." 


Euro zone house-price recovery

Meanwhile the ECB has said that a euro zone house-price recovery is sustainable but subdued.

A recent rise in euro zone property prices appears sustainable, but the recovery is weaker than in past cycles and the eventual normalisation of interest rates poses some risks, the European Central Bank said today.

House prices fell sharply across the euro zone in 2009, then dipped again in 2012 and 2013.

They unwound imbalances that had built up before the financial crisis which put the current recovery on a more solid footing, the ECB said in an economic bulletin.

House prices have risen since the second half of 2014 and the growth is sustainable as a mismatch between incomes and property prices has been corrected, the ECB said in a paper.

The study is part of a broader economic update, due to be published on Thursday.

"The recovery in euro area house prices appears to be relatively broad-based across groups of countries," the ECB said.

"However, it seems that the current recovery is weaker than the typical increase observed historically during the initial phase of an upturn in house prices after a trough," it added.

Low rates will help the recovery but the boost to housing affordability as interest rates, now at their lower bound, normalise, the ECB said.

"The current recovery in euro area house price growth seems less contingent on prices in metropolitan areas than in 2009-10."

The ECB added that risks to financial stability from the rising prices appear limited for now. Credit growth is subdued and countries have implemented brakes on "potential house price and credit exuberance," it added.



ECB may extend QE beyond September 2016 to battle low inflation

Posted 11/09/2015

The European Central Bank is predicted to officially extend its asset purchase programme beyond September 2016 in yet another attempt to drive up inflation and rekindle growth, a Reuters poll has found.

Launched just six months ago, the €60bn-a-month sovereign bond buying scheme was originally set to end a year from now.

It has so far failed to pull inflation meaningfully higher or even weaken the euro for a sustained period.

After the financial market rout in August, triggered by concerns China's economy is slowing rapidly, speculation the ECB would ease policy again started to mount - especially with the central bank's policymakers suggesting such a move.

ECB President Mario Draghi signalled as much at a news conference after last week's monetary policy meeting.


Most economists in the survey predicted he would eventually announce a new end-date for the quantitative easing programme.

Many others said the ECB would extend the programme and increase the amount of monthly purchases at the same time, while a few forecast the programme would be increased in size only.

At a time when expectations are high for a US interest rate hike from the Federal Reserve soon, followed by Britain early next year, the ECB is faced with a weak economy that is plagued by very little domestic demand and is hardly generating inflation.

But what benefit an enhanced QE programme, either in duration or size, would have is still unclear.

Japan has pumped trillions of yen into the economy through various stimulus programmes for over a decade but inflation showed signs of rising only recently and remains far from what policymakers want to achieve.

The Reuters poll showed euro zone inflation would rise slightly in the last quarter of this year to 0.5% from August's 0.2%.

Next year it is expected to average 1.2% before rising to 1.6% in 2017. That 2017 inflation consensus is slightly lower than the ECB's forecast of 1.7% and shy of its target of close to but below 2%.

The most pessimistic economist forecasts inflation at 1.1%, barely more than half the ECB's target at that time.

Global oil prices, which have fallen 8% since the start of August after an already historic slump over the last year, and a steadily strengthening euro hardly make the case for a spike in inflation.

That, and a sharp slowdown in China is likely to pressure euro zone economies well into the future.

The poll also showed the euro zone economy would expand 0.4% in each quarter from now until the end of next year, exactly the same as expectations last month.



ECB cuts growth and inflation forecasts, maintains interest rates unchanged

Posted 05/09/2015

Mario Draghi announced last Thursday a slight downward revision of euro area inflation forecasts for 2015, 2016, and 2017. “New risks weighing on the growth and inflation outlooks have recently appeared,” explained the ECB President.

The slowdown in the emerging economies is weighing on growth in the euro area, now estimated at 1.4% this year (compared to 1.5%), 1.7% in 2016 (compared to 1.9%), and 1.8% in 2017 (compared to 2%), by the ECB. 

Freefalling oil prices in recent months haven’t helped inflation, which will not surpass 0.1% in 2015 (compared to 0.3%). As a consequence, the ECB left its key interest rate unchanged at 0.05%. In 2016, the ECB expects price rises of 1.1%, and 1.7% in 2017. And it could get worse. These forecasts, made on 12 August, don’t take into account the latest developments including the stock market turmoil and strengthening euro.

Draghi stressed that the ECB is ready to take additional measures to strengthen the economy and inflation, if the situation deteriorates further. In FAZ, Holger Steltzner writes that rethinking the ECB's QE programme is long overdue; the ECB's goals were to curb inflation, promote the economy, make the euro cheaper and loosen the credit squeeze, none of which succeeded. The motto “more action helps more” evidently does not work and yet Draghi is thinking of expanding purchases.

Meanwhile, the perennial dilemma regarding milk production, quotas and pricing will be marked by yet another protest ahead of agriculture ministers’ meeting.

Ahead of Monday’s Agriculture ministers’ meeting in Brussels, protests in the milk sector gained momentum on Thursday, denouncing the end of EU milk quotas and asking for help to cope with the Russian embargo.

French dairy producers blocked the main roads in Paris to demand higher milk prices, which have dropped heavily since the abolition of the EU milk quota. Farmers also asked for lower charges, and to stop the accumulation of stringent standards demanded by the European Commission.

The trouble in France mirrors problems elsewhere, including Britain. French Prime Minister Manuel Valls capitulated to the country's farmers yesterday after more than a thousand tractors threatened to bring central Paris to a standstill. "Everything will be done to enable farmers to earn a dignified living," he said. 

In a different tone, Handelsblatt's Tanja Kuchenbecker criticised the fact that farmers overestimated demand for milk and now are calling for subsidies to make up for their losses. Meanwhile, Bulgarian Agriculture Minister Desislava Taneva said on Thursday that it was high time Bulgaria started receiving fair and adequate support for its diary sector from the European Commission. Moreover, it has been reported that members of the EP Agriculture and Rural Development Committee from the ranks of the EPP addressed a letter to European Commissioner Phil Hogan on Thursday, in which they demand that the EC take action in the dairy sector, including in determining the intervention price of milk and dairy products.

The European Commission has already provided help for farmers but Slovak Minister of Agriculture Ľubomír Jahnátek points out that it is not enough. This is not the end of the protests since farmers from several EU countries are organising further demonstrations during Monday’s meeting in Brussels.


The Federation of Agricultural Producers MTK has said that thousands of EU farmers will participate in a monster tractor protest in Brussels. MTK committee spokesperson Tommi Lunttila says that EU policy makers must now bear the responsibility for the consequences of their decisions regarding the Russian embargo. 

However, Agriculture Commissioner Phil Hogan warned that the EU must not back off from the reforms that have been agreed in the sector – i.e. the dropping of milk quotas – abolishing a big part of the protective framework and leaving it exposed to the “powers of the market” and the “free competition.” In France, Le Monde notes that the “very pressing issue” of supporting milk and pork prices will depend on the outcome of the special summit, called for by France, in Brussels on the 7th of September, but for now, nothing says that the summit will produce the desired results. Regardless of what may be the outcome of the summit, judging from past experience, we can be guaranteed a very colourful event, and hopefully not as violent as in previous occasions.



Business Report

Posted 29/08/2015

Whilst this week the business news was largely dominated by the trauma in the Chinese economy, and the tremors that it sent around the world’s stock markets, in this business report we have decided to give the Chinese drama a rest and instead focus on a couple of interesting American IT-based stories and also to focus on the inspiring ideas of a Spanish entrepreneur who proposes simple ideas to reinvigorate our domestic finances.


Inside Amazon: a view

According to Jodi Kantor and David Streitfeld writing in The New York Times this month, allegedly all is not roses with Amazon’s work culture.

Amazon is known for its cutthroat efficiency and harsh tactics; it's what makes it possible to get a pack of toilet paper delivered to your door in less than 24 hours. But CEO Jeff Bezos' love of precision and data goes far beyond fulfilling orders and undercutting competitors' prices. It permeates every aspect of the workplace.

And ruthless optimization, unsurprisingly, doesn't make for a very supportive workplace environment. The New York Times' Jodi Kantor and David Streitfeld interviewed over 100 former and current Amazon employees for a fantastic new report out this month that reveals just how bad it can get. Working at the retail giant's Seattle offices is apparently nothing like showing up to work at an idyllic Silicon Valley campus.

Employees describe a system that quantifies and analyses every aspect of their work. Anything that the data can't pick up is revealed by informants — also known as fellow employees. Everyone has access to the "Anytime Feedback Tool," which lets employees criticize or praise their co-workers discreetly.

The feedback makes it to upper management, and can often be used in Amazon's standard weekly or monthly performance reviews, according to the Times. Employees are also routinely ranked, and managers are forced to fire a certain amount of the lowest-scoring workers every time to fulfil quotas.

It isn't hard to argue that it's a good idea for a company to know what its employees are actually accomplishing. But, going off of the Times' interviews, Amazon's standards are ludicrous. The company tries to squeeze everything it can out of its employees, and often lets them go after they're burnt out. For instance, managers expect to receive immediate responses to emails sent after midnight, and they complain when employees have poor internet connections while traveling on vacation. Amazon itself calls its standards "unreasonably high," and as one former employee said, "Amazon is where overachievers go to feel bad about themselves."

Perhaps worst of all is Amazon's apparent approach when its employees need help. The Times has uncovered several cases where workers who were sick, grieving, or otherwise encumbered by the realities of life were pushed out of the company. A woman who had a miscarriage was told to travel on a business trip the day after both her twins were stillborn. Another woman recovering from breast cancer was given poor performance rankings and was warned that she was in danger of losing her job.

All of that said, Amazon is clearly a massively successful company. The picture painted by the Times isn't a pretty one, but it's possible (likely, even) that the workplace culture does appeal to some. There's no denying that Amazon has produced an extremely competitive product and has grown massively over the years.

Let's just hope that this isn't how all companies are run in the future. If you need any more convincing, just keep in mind what one Amazon veteran told the Times: "Nearly every person I worked with, I saw cry at their desk."

Sounds like a fun workplace!


Facebook had a billion users in a single day

Meanwhile, regarding another American IT mega enterprise, this week Facebook had a billion users in a single day, says Mark Zuckerberg.

The "milestone" was reached on Monday, when "1 in 7 people on Earth used Facebook to connect with their friends and family," he said in a post.

Facebook has nearly 1.5 billion users who log in at least once a month, but this was the most in a single day.

The company gained its billionth user in October 2012.

The social media phenomena, loved by millions and hated by equally as many, was founded in 2004 by Mr Zuckerberg while he was a Harvard student.

In his post on Thursday, he predicted that Facebook's reach would continue to grow.

"This was the first time we reached this milestone, and it's just the beginning of connecting the whole world," Mr Zuckerberg wrote.

In July, Facebook claimed that over half of the world's online users visited the site at least once a month.

There is no point in sleeping unless one can dream

Far from the Greek odyssey being solved, and having new Greek elections around the corner, it is clear that the Europeans will be destined to witness another pack of never-ending Summits in Brussels, which thus far have had little progress in solving societal unrest about this economic crisis.

Maybe the problem is not going beyond the macroeconomic figures, but rather looking into the microeconomics, shaking the lethargy out and being proactive and constructive. I must admit it can be a difficult task when all that you hear is negative messages of how bad the situation is, however taking the example of the success of certain entrepreneurs is no doubt inspiring.

Not so long ago we were admiring the success of the Irish economy, baptised as the “Celtic tiger,” now faded into the realms of economic self-parody, but the structure remains, a long list of entrepreneurs, the promotion of business ideas and an excellent mutual relation between academia and industry-commerce are perhaps some of the pivotal ingredients that are maybe driving the current Irish economic recovery. Indeed, Ireland post-economic catastrophe - is the fastest growing economy in the EU today.

Javier Rivero DiazJavier Rivero DiazThis subject made me reflect on the work of a friend from my infancy, a former neighbour, Javier Rivero Diaz, or as I call him, Javi. I came across him briefly during my last visit to my family in Alcobendas (Madrid), and I just remembered how positive and cheery he always was, and continues to be.

He is not only an entrepreneur but he is helping thousands of people to follow in his footsteps. He is a professor at the Instituto de Empresa in Madrid and apart from coaching celebrities, he is also CEO of Desarrollo Profesional TV.  Nevertheless, I think that his ultimate goal is to make this world a better one. Opportunities may come and go and some guidance is always welcomed.

Javi is author of Gimnasia Financiera, a response to the economic crisis with an unusual focus, the book aims to help you to improve your domestic economy by not getting into trouble with your personal finances, something that would seem rather obvious in the current cult of austerity which dominates Euroland today. In his book Javier proposes several tricks to be financially healthy which will enable us to better manage our domestic situation without losing sleep in the process, here are just a few of his common-sense suggestions:

  • Reduce your number of credit cards, maximum two, and give more importance to using cash.
  • Establish a transparent communications with your creditors, when possible, and assume responsibility for your own debts.
  • Manage your expenses and do not get into debt that you will not be able to sustain.
  • Think positively, this will help you to be successful.
  • Be aware of the legalities of your financial commitments and be tax compliant.
  • Use your cash point only when you really need it and manage your cash weekly.
  • Divide your earnings wisely. Compartmentalise your expenses: investment, savings and do not forget to invest in your education (Javier recommends 10% of your earnings for upskilling and ongoing education).
  • Have various sources of income, do not depend only on one salary but diversify, for example: renting an apartment, explore different avenues to exploit your full earning potential, make use of potential internet earnings, etc.
  • Be conscious of your expenses, above all, get rid of non-essential costs that you do no longer need and are still paying for, i.e. get rid of direct transfers for services that  you no longer use.

The profits of his book are donated to NGOs and institutions that help families in economic difficulties, one more reason to buy his book, which is also available on the Kindle platform.

 Javier’s book has been featured on such media as CNN, RTVE, LaSexta, and many others, and alongside conferences all over the world, Javier has found time to write another book Como Vender Mas (How to sell more), no doubt it will be another success for Javier and useful advice for hundreds of people.

In closing this article, I would like to mention the words of another successful citizen of Alcobendas, Penelope Cruz, when she said in her Oscar winning speech: “I grew up in a place called Alcobendas, where this was not a very realistic dream…,” one more reason to think that success and self-improvement is not something that comes out of the blue, but something that you have to work hard for. I might also add the words of an Irish poet who said “there is no point in sleeping unless one can dream” (Oscar Wilde).


By Raquel Jimenez for EU Spectator




Business Report

Posted 20/08/2015


Greece repays €3.4bn to ECB following bailout deal

Greece has repaid €3.4bn due to the European Central Bank, a source close to the Greek government said after the launch of a massive new reforms-for-bailout deal.

Greece was able to repay the loan as euro zone finance ministers announced that they had disbursed €13bn to Athens and set aside another €10bn to recapitalise the country's cash-starved banks.

The finance ministers of the 19-country euro zone late yesterday announced that they had formally approved a new bailout worth up to €86bn after European parliaments, including the German Bundestag, had given it their green light.

Klaus Regling, the Managing Director of the Eurozone Stability Mechanism that manages the bailout signalled Greece was making a fresh start.

"Today's ESM disbursement (of €13bn) will allow Greece to meet its urgent financial obligations to the International Monetary Fund and the European Central Bank, and other budgetary needs," Mr Regling said in a statement.

"The second sub-tranche of €10bn will contribute to stabilising the banking sector, whose situation deteriorated sharply after the imposition of capital controls in June," he said.

Jeroen Dijsselbloem, the Dutch Finance Minister who chairs the so-called Eurogroup of his euro zone peers, said the reform-for-aid accord formally approved Wednesday would hopefully give Greece a new lease on life.

"This agreement provides perspective for the Greek economy and a basis for sustainable growth," he said.

"The Greek government is bound to be implementing this wide-ranging reform package with determination and we will monitor the process closely," Mr Dijsselbloem said.

"We are certain to encounter problems in the coming years but I trust we will be able to tackle them," he added.


Stock markets fall amid economic uncertainty

European stock markets have fallen once again today, as traders reacted to China's economic problems, the outlook for US interest rates, Greek action over its bailout, as well as sliding oil prices.

Greek stocks sank despite Athens paying back a chunk of its latest bailout, as concerns elsewhere dragged down global markets.

London's benchmark FTSE 100 index dropped 0.49% to stand at 6,371 points in midday deals, while in the eurozone Frankfurt's DAX 30 shed 1.17% and the CAC 40 in Paris lost 1.14% so far today.

"The European stock markets are continuing to lose ground as investor worries over China intensify," said Fawad Razaqzada, analyst at Gain Capital trading group.

"Such is the level of pessimism that the DAX has even taken out the low it hit in July when the Greek crisis ... was at the forefront," he added.

Greece today cleared €3.4bn owed to the European Central Bank, effectively ending the bitter feud dividing the leftist-governed eurozone nation and its European creditors that threatened to force the country out of the euro and sow chaos in the global economy.

But Athens' main stocks index was down 2.95% afterwards, with deepening political rifts in Greece putting pressure on Prime Minister Alexis Tsipras to call snap elections.

"The Eurozone indices fared a bit worse than the FTSE ... despite the fact that Greece paid back the ECB on time, an event that would have once caused indices-wide jubilation," said Connor Campbell, analyst at Spreadex trading group.

Meanwhile, Asian markets provided a negative lead, slumping on heightened concerns about the health of China's economy after Federal Reserve minutes from its last policy meeting clouded the outlook for US interest rates.

China's benchmark Shanghai stock index closed down 3.42% overnight, as worries persisted over the country's weak economy and currency.

On currency markets, the dollar had tumbled yesterday as the Fed dampened expectations for a rate rise in September and outlined its fears about the global economy, sending oil prices tumbling.

The minutes "did not shed much more in the way of solid news on the timing of the first rate hike, which now might be complicated by Chinese developments and increasing market volatility," said Neil MacKinnon, economist at VTB Capital.

Dealers said markets remained pressured by uncertainties over China after the shock devaluation of the yuan last week added to fears that growth in the world's second biggest economy is slowing more than thought.



British retail sales edged up in July as sales attracted shoppers

British retail sales edged up in July as shoppers took advantage of high-street promotions to splash out on electrical appliances and furniture, according to official figures.

The country’s Office for National Statistics said retail sales by volume rose 0.1% month-on-month in July in a reversal of the unexpected 0.1% fall seen in June.

Sales in household goods stores surged 13.4% higher year-on-year in July as a raft of discounts and stronger housing market conditions boosted demand.

But the rise in sales was lower than the 0.4% rise expected by most economists, with a fall in fuel sales on forecourts holding back progress in the retail sector.

Paul Hollingsworth, UK economist at Capital Economics, said the weaker than expected retail sales figures were "nothing to worry about."



He added: "The prospects for retail spending remain bright. Real pay is rising strongly, unemployment is still low and the recent fall-back in the oil price and the forthcoming cut to gas prices should give households' discretionary spending power another healthy boost."



New mobile phone service for Irish market

Ireland's newest mobile phone operator is launching today with iD Mobile expected to increase competition in the market.

iD Mobile is owned by the Dixons Carphone group and its entry into the Irish market could lead to lower prices for consumers.

The company is a Mobile Virtual Network Operator, or MVNO, which means it does not have its own network but uses another operator's instead.

iD Mobile will be using Three Ireland's network, although it has also installed a considerable amount of new infrastructure of its own, which it says will enable it to better innovate.

As part of its approval of Three's takeover of O2 last year, the European Union instructed the Hutchinson Whampoa-owned business to make some of its mobile network capacity available to two other MVNOs.

Three subsequently agreed a deal with the Dixons Carphone Group, which operates the Carphone Warehouse chain, and with UPC, which is expected to launch its mobile offering later this year.

iD Mobile is aiming to secure 6% of the market within five years, representing around 300,000 customers.

In particular it is targeting three distinct segments of the market - young independent people aged 25-34 who are confident with technology and primarily use bill pay services; established families who may have multiple devices paid for by parents and who want control over the cost; and "empty nesters," whose children have left home.

The company says its market research is telling it that customers here want greater flexibility in their mobile plans.

As a result it has opted for a pricing system that allows the customer to pick from a range of handsets which can be partly paid for upfront, or entirely over a period ranging from 12 to 24 months.

Handsets can also be traded in, in order to reduce the monthly price plan cost.

Customers will then be able to choose from a menu of options in order to build their own personalised voice, data and text tariff and can alter those options at any point through the iD Mobile website, app or customer service centres.

The handset and service costs are split from each other, meaning bill pay customers won't have to commit to a traditional contract and once their handset is paid off, their monthly bill should fall.

The company will also offer 4G for all data at no extra cost. However, there is no unlimited data option with the upper limit for those that choose it being 20GB per month.

There will be no roaming packages initially, but the company says its roaming prices will be competitive with the market.

iD Mobile will have 12 retail outlets in Harvey Norman stores, and the service will also be sold through the 78 Carphone Warehouse shops around the country, as well as Carphone Warehouse and iD Mobile's websites.

It will offer around 20 handsets at launch, the majority of which will be 4G, although the Apple iPhone will not be initially available.

Market analysts and competitors will be closely watching the launch of iD Mobile and the expected launch by UPC of its mobile offering in the coming months, to see if they have a positive impact on competition in the market here.

At the time that the EU gave approval for Three Ireland's takeover of O2, both communications regulator Comreg and rival Vodafone expressed concern that the conditions attached to the approval were not strong enough to ensure competition was maintained in the marketplace.

Source: AFP/Reuters



Syriza party has failed in its mission to bring an end to austerity

Posted 11/08/2015

Syriza's deal: Cuts, reforms, privatisations, deregulation and new bank protections

After eight months of occasionally combative - and generally tedious - negotiations, Greece has reached a final agreement to secure a third bailout from its international creditors.

A spokeswoman for the European Commission has confirmed that an agreement has been reached "in principal."

For those who voted for Syriza on the last Sunday of January hoping that the party would bring an end to austerity, the final deal will make for uncomfortable reading.

The breakdown:

The Greeks will be required to produce a primary surplus (current government spending, minus income from taxes - excluding interest paid on government debt) of 0.25% in 2015, 0.5% in 2016, 1.75% in 2017 and 3.5% in 2018.

It is forecast that the Greek economy will contract by between 2.1% and 2.3% in 2015, and 0.5% in 2016 - before growing by 2.3% in 2017.


  • Before the money is handed over Greece must introduce new laws on non-performing loans held by the country's banks.

  • It must also deregulate its gas market.
  • An independent sovereign wealth fund will be established to raise €50bn to recapitalise banks, and reduce debts.
  • Tax breaks for farmers currently receiving fuel subsidies must be cut.
  • New tighter rules need to be introduced to chase individuals who owe taxes to the state.
  • Self-employed workers and small companies will pay more taxes in advance of working out their final annual income.
  • Those earning between €50,000 and €100,000 will have their 'solidarity tax' payment increased from 4% to 6%.

Reforms passed in July:

  • VAT rates have been simplified, and applied more widely.
  • Pension payments have been cut, and the state statistical agency has been made independent.
  • Parts of the civil justice system have started to be overhauled.
  • The country has agreed to EU's so-called 'bail-in' rules to aid banks who find themselves in financial difficulties.

Still to come...

  • Further, more drastic pension reforms.
  • The privatisation of the electricity network.
  • Reforms of Sunday training rules, pharmacy ownership, milk sales and bakeries.
  • A review of collective bargaining rules, and regulations regarding industrial action, and collective dismissals.



China devalues its currency to boost exports

The move comes after the release of poor export figures

The Chinese authorities surprised the market this morning by devaluing its overseas trading currency the Yuan by a record 1.9% against the US dollar and indirectly against other currencies

China has unofficially maintained a fixed link with the dollar for many years and the move is seen as an attempt by the government to boost the country’s exports in an environment where reduced domestic demand and lower manufacturing activity is likely to slow economic growth rates below the target 7% per annum.

Data released over last weekend shows that China's exports fell by 8.3 percent in July, as demand weakened across the US, Europe and Japan.

One of the risks of the move is that it will trigger a flight of both Chinese and foreign capital from the country as the value of assets there fall with the value of the currency.

The People’s Bank of China says the change is a once off adjustment.



Greek third bail out close to deal

Posted 09/08/2015

Greece and the creditors agree to the creation of the Privatisation Fund.

The guarantee deposit for public goods will be based in Athens and supervised from Brussels.

Negotiations between Greece and the IMF, European Commission, ECB and the ESM (European Stability Mechanism) advance "progressively," as continually reports the EU executive. The words, therefore, are turning into facts. On Friday, officials from both sides sitting at the negotiating table closed the first great chapter of this new saga: the fund of state assets, according to an internal working document dated 7th of August.

The aim is that the fund will generate 50 billion in 30 years thanks to the value of its components. The Fund will have finally its headquarters in Athens, and not in Luxembourg as initially creditors' proposed. However, it will remain under the close supervision of the European Commission. Diplomatic sources prefer not to count the chickens before they are hatched as they argue that "nothing will be agreed until the whole is agreed."

The Fund, presumably, will host all the property to be privatized until 2045 as state enterprises (for example, the Port Authority of Piraeus), public infrastructure (ports, airports, marinas) and other state assets. What may be disturbing still for some Greeks is that the working document also contemplates the possibility of adding natural resources (mining and hydrocarbons operations) into this deposit.

A senior source present in the negotiations maintains, however, that "nothing is decided as a whole." As advanced in July, half of the 50 billion profit expected from the Fund will be used as a bank guarantee. The remaining will be utilised for economic development of the country (25%) and debt payment to creditors (25%). Overall, these clauses will leave creditors well covered in case of Greek state insolvency and will freeze Greek assets for three decades.

The situation remains critical as failure of reaching the final agreement for the third bailout, mainly due to the opposition of some national parliaments, Athens (with a slashing debt reaching 200% of their GDP) will only receive a second bridging credit -the first was in July to meet their most pressing needs, which included of course the repayment of 3.5 billion euros to the European Central Bank which expires on the 20th of August, hence the urgency expressed by both parties.

The structure of the fund and the guarantee payment is similar to investment funds that already exist in countries like Australia and Norway. According to reports, profits are expected at three decades view, allowing public goods enough time to start generating money throughout a well and truly damaged economy. The establishment of the Fund was one of the conditions agreed at the summit last 13th of July in Brussels, which got unclog the critical situation that the Hellenic country was approaching. This measure, however, raised eyebrows across Europe, and in particular within the more left wing of Prime Minister Alexis Tsipras own party (Syriza).

Given the criticism that the Greek government received in recent weeks about the possible sale of the assets of the country, the working document clarifies that "the transfer of assets does not necessarily mean their sale," since it is expected that the 50 billion expected can be the results obtained through different processes: "Some goods can be sold, others may be part of long-term concessions and others can generate income for the fund itself."

The intention of the Greek authorities is, however, do everything possible to prevent the grain of public assets. The Fund thus must "come up with" ways to have a steady income. An example would be to impose a small fee for each container transported by train or plane.


The headway comes as some members of the 19-nation common currency express scepticism that a deal can work. Finnish Foreign Minister Timo Soini said over the weekend that his government is ready to discuss a new aid plan for Greece but that “we should admit that this isn’t going to work.”

This latest agreement indicates that conditions in the third bailout are not far from reaching an end. Sources of the EU executive insists that next Tuesday will be "crucial" to determine whether the necessary conditions exist to sign a memorandum of understanding on the third bailout estimated at 86 billion and, to that end, the Eurogroup will hold a meeting at the end of week ratify the agreement. Failing an agreement, Greece will need a second bridge loan to meet their immediate payments: 3.5 billion euros to the European Central Bank on 20 this month. "It is an ambitious timetable," says Brussels.

Indeed, last week, Hans Michelbach, a Bavarian lawmaker who has argued against a deal with Greece, said he didn’t believe a rescue program could be reached in time and other financing arrangements would be needed.

According to sources close to the negotiation, there would be an agreement in principle on the amendment of agricultural taxation, deregulation of some professions ("closed professions" in Greek), which has been a workhorse with the previously called troika from the first rescue, and also the opening of shops on Sundays, which has a strong opposition in Greece from the Orthodox Church.

However issues that remain unclear are which priority actions should now be approved by the Greek Parliament and the amount that Greece would receive if the third rescue package is agreed. Athens expects to receive a total of 25 billion at the end of the month, of which half would be used to meet debt obligations.




Greek stock exchange re-opens after five weeks with 22% drop

Posted 03/08/2015

Greece's stock exchange reopened with a drop of more than 22% after a five-week shutdown imposed by the country's debt crisis and capital controls.

The ATHEX plunged to 615.72 points a few minutes after opening down 22.82% from its June 26th close.

The country's main banks took a heavy blow at the opening with drops of around 30%.

Head of the capital markets commission, Constantine Botopoulos said: "Naturally, pressure is expected, markets will not fail to comment on such an extensive shutdown,"

"But we must not get carried away. We must wait until the end of the week to see how the reopening will begin to be dealt with more coolly."

The stock exchange operates as normal for foreign investors but local traders face limits on their transactions as part of the capital controls imposed by the government last month.

The restrictions mean that Greek investors are unable to finance the purchase of securities by taking money from their bank accounts in Greece.

They will, however, be able to use foreign bank accounts or make cash transactions.

The volatility cap has been reduced from 30% to 20%  during the first three days of trading.

The country's lenders are in a vulnerable position because of outflows of billions of euros from deposits over the past six months.

Some €40bn has been withdrawn from Greek banks since December, according to the country's banks association, amid fears over the fate of the Greek economy.

The reopening of the stock market comes after senior EU and IMF auditors held their first meetings with Greek ministers to finalise a new three-year bailout for the country which could be worth up to €86bn.

The last trading session on the Athens stock exchange was on 26 June, ending a few hours before Prime Minister Alexis Tsipras announced a referendum on the stringent bailout conditions demanded by Greece's international creditors.

In response, worried Greeks rushed to withdraw cash from ATMs, prompting the government to impose capital controls from 29 June and announce the closure of the country's banks and the stock exchange.

The banks reopened on the 20th of July , but withdrawals and money transfers abroad remain restricted. The International Monetary Fund (IMF) is very wary of any financial contribution to a third Greek bailout.

The implication of remarks by an IMF official is that it is very unlikely to provide funds at the first stage.

The fund could, however, join in later, provided both the eurozone and Athens take steps to address IMF concerns.

The problem for the IMF is that its staff believe the elements so far agreed are not enough to make the Greek government's debt sustainable.

Negotiations are under way and the IMF is involved. But its staff think the euro zone governments need to give Greece debt relief.

That does not have to be in the form of explicit reductions in the outstanding debt. It could mean longer repayment terms and delays before any payments are required - so-called grace periods.

The eurozone has insisted that it is only prepared to look at the possibility after Greece has made a start on implementing whatever conditions will be agreed. The IMF official also said Greece needs to commit itself to further reforms if it is to make the debt situation sustainable.

He didn't spell out what they were. But they will involve reforms to the government finances to control spending and maintain tax revenue. They will also cover what are called structural reforms, to remove barriers to economic growth. Faster growth would generate more tax revenue to help make the debt situation sustainable.

Neither Greece nor the eurozone are ready to take those steps, the official suggested.


Political implication

The implication then is that Greece and the eurozone will find it very hard to persuade the IMF to stump up any cash at the start, though it might be willing to do so if there is debt relief and further reform later.

The immediate significance of the IMF's position is political.

If the bailout talks do produce an agreement to provide financial assistance from the euro zone bailout agency, the European Stability Mechanism (ESM), it will still need approval by some parliaments, including Germany's Bundestag.

Many members, including some from Chancellor Angela Merkel's own party, are very unhappy about a third bailout for Greece. There is a much better chance of persuading them to acquiesce if the IMF is on board.

Financially, the IMF is less critical. It is the euro zone that has provided the great bulk of the resources for the first two bailouts and would do so with the third.

It could afford to find the full expected €86bn (£60bn) if really necessary. The ESM has the capacity to make €455bn of new loans at present.

The political roadblock erected by the IMF is more difficult.


Source: Reuters




The European Commission modernises EU customs procedures

Posted 28/07/2015

The European Commission has adopted today a legal act to create a simpler, more modern and integrated EU customs system to support cross-border trade and provide for more EU-wide cooperation in customs matters. It builds on the Union Customs Code adopted in 2013, which sets out detailed rules for twenty-first century customs processes.

Customs services play a central role in policing the EU’s external borders and in facilitating trade. The customs union is the operational arm of much of the EU's commercial policy measures.

In addition, a growing range of government agencies call on customs to enforce their policies at the border.EU customs handle 16% of world trade, or over two billion tonnes of goods a year with a value of EUR 3,400 billion.

The EU Customs Union is a unique example of an area where a number of countries apply a uniform system for handling goods (imported, exported and transiting) and implement a common set of rules (the Union Customs Code).

The EU Customs Union is managed on the ground by 28 national customs services acting as if they were one.

The European Commission proposes EU customs legislation and monitors its implementation.

There are no customs duties at the EU Customs Union's internal borders. All goods circulate freely within the EU Customs Union, whether they are made in the EU or imported from outside. 

The number of customs declarations (271 million in a year) is equivalent to 516 declarations a minute or 9 declarations a second.

The tonnage of goods traded each year (2.2 billion tonnes is equivalent to the weight of 53 average family cars being moved per second.

EU Customs handle a huge part of the world's international trade. The following figures demonstrate this in a number of areas:

Summary of key EU figures
(year 2013; 28 Member States; source: Eurostat and DG Taxation and Customs Union)

Total (Extra-EU trade)



Value (€)

€ 3.4 trillion

€ 1.7 trillion

€ 1.7 trillion

EU share in world trade (%)


(US = 16.2%,
China = 12.6%)

(US = 11.1%,
China = 14.7%)

Quantity of goods (tonnes)

2.2 billion

1.6 billion

0.6 billion

Number of Customs declarations

271 million

145 million for import, 108 million for export and 18 million for transit


Pierre Moscovici, EU Commissioner for Economic and Financial Affairs, Taxation and Customs, said: “A modern and cost-effective customs system facilitates international trade and is conducive to growth. It also plays a vital role in defending the safety and security of European citizens and in protecting Member States' interests.”

The Commission has been working for several years on a major overhaul of customs rules in the EU. The basic regulations were changed in 2013. Detailed acts must subsequently be adopted so that the new rules can be applied as of 1 May 2016.

Today's decision takes the form of a delegated act. This kind of legal act, introduced by the Treaty of Lisbon in 2010, gives the Commission power to adopt the technical, non-essential elements of an existing legislation, in this case of the Union Customs Code.


The act adopted today covers a wide area of customs activity, including:

  • Simplifications of the customs procedure inward processing which allows the processing of non-Union goods without payment of import duty and other charges to support creation of added value in the EU;
  • Clearer rules to ensure equal treatment of economic operators in the EU;
  • Wide-ranging provisions which will allow customs decisions and authorisations to be valid across the EU in the future;
  • Establishing common data requirements as the basis for new IT systems linking Member States' customs administrations to ensure a seamless exchange of information;
  • Improvements in risk management to reinforce the fight against trade in illicit and prohibited goods, terrorism and other criminal activities.


The Commission consulted extensively with Member States and trade interest groups to prepare the delegated act. The act was adopted well ahead of the 1 May 2016 deadline to allow stakeholders to adapt.

The delegated act will now be considered by the European Parliament and the Council. In accordance with Article 290 TFEU, both can raise their objections within two months. This period of scrutiny can be extended by a further two months.



Greece submits official request for IMF loan

Posted 25/07/2015

Greece has submitted an official request to the International Monetary Fund for a new loan as it seeks a huge third bailout from its creditors, the finance ministry said.

"We would like to inform you that we are seeking a new loan facility from the International Monetary Fund," Finance Minister Euclid Tsakalotos wrote in a letter to Christine Lagarde, the managing director of the IMF.

Earlier, talks on tying up a new bailout deal for Greece failed to start as had been expected, with officials blaming security worries for delaying the negotiations with international creditors - who are detested by many Greeks.

Greek government officials had said this week that the talks on the third bailout programme worth up to €86bn would start in Athens today.

But representatives of Greece's creditor institutions - the European Commission, the European Central Bank and International Monetary Fund - said they cannot begin until the right location is found, given the talks' sensitivity and the wide public anger about austerity policies imposed under "there are some logistical issues to solve, notably security-wise," a European Commission official said.

"Several options are on the table," the official said, without giving more details.

The Greek parliament has already approved two packages of reform measures, a prerequisite for starting the formal negotiations to hammer out details of the new bailout.

However, another source close to the talks said Greece had been asked to do more on reforms before top international officials could come to Athens.

The government of leftist Prime Minister Alexis Tsipras held five months of acrimonious talks with the creditors before they finally offered to start talks on a new bailout - and only after the government missed a debt repayment to the IMF and had to close local banks for three weeks.

Mr Tsipras accepted the creditors' terms even though Greek voters had rejected an earlier offer in a referendum.  

Athens hopes this time the negotiations will be quick and can be concluded by the 12th of August so the deal can get parliamentary approval before a bond repayment to the ECB falls due on the 20th of August.

At the moment, only technical talks are under way to sort out logistical issues. One government official said he hoped negotiations with the institutions' mission chiefs could start tomorrow.

A European Commission spokeswoman said only that negotiators from the institutions, including the European Stability Mechanism rescue fund, were expected to go to Athens "in the coming days."      


At the same time a Greek official has said that talks between Greece and its international creditors over a new bailout package should go-ahead on Monday after logistical issues that delayed meetings this week are resolved.

The meetings with officials from the European Commission, European Central Bank and International Monetary Fund had been expected to start on Friday but were delayed by organisational issues including the location of talks and security.

The finance ministry official said talks were now expected to get under way formally on Monday after the logistical issues were resolved.

The official, who spoke on condition of anonymity, denied that the government was trying to keep the lenders’ team away from government departments.         

"We don't have any problem with them visiting the General Accounting Office," the official said.

Greeks have viewed inspections visits by the lenders in Athens as a violation of the country's sovereignty and six-months of acrimonious negotiations with EU partners took place in Brussels at the government's request.

Asked if the government would now allow EU, IMF and ECB mission chiefs to visit Athens for talks on a new loan, State Minister Alekos Flabouraris said: "If the agreement says that they should visit a ministry, we have to accept that."

The confusion around the expected start to the talks yesterday underlined the challenges ahead if negotiations are to be wrapped up in time for a bailout worth up to €86bn to be approved in parliament by the 20th of August as Greece intends.

Already, Prime Minister Alexis Tsipras is struggling to contain a rebellion in his leftwing Syriza party that made his government dependent on votes from pro-European opposition parties to get the tough bailout terms approved in parliament.

One of Mr Tsipras' closest aides warned that the understanding with the opposition parties could not last long and a "clear" solution was needed, underlining widespread expectations that new elections may come as soon as September or October.

"The country cannot go on with a minority government for long. We need clear, strong solutions," State Minister Nikos Pappas told the weekly Ependysi in an interview published today.

Mr Tsipras has said his priority is to secure the bailout package before dealing with the political fallout from the Syriza party rebellion.



Eurostar sees record passenger numbers

Posted 22/07/2015

Channel Tunnel high-speed train company Eurostar has said it notched up record passenger numbers despite disruption from last month's strikes in Calais.

The group said it carried 2.8m passengers between the UK and the continent in the three months to the end of June - the highest ever in one quarter.

Its record performance came in spite of the Channel Tunnel and ferry disruption seen late last month, when striking Calais ferry workers closed the French port and blocked Eurotunnel rail services.

Two strikes took place at the end of June, leaving thousands of cross-Channel passengers and lorries stranded, while migrants also took advantage of the chaos to try to board UK-bound lorries stuck on the French side of the Channel.

A spokesman for the group said it was a "frustrating situation", adding that the firm was in close contact with authorities to make sure it can "respond very quickly" in future.

Eurostar said a boost from business travellers and strong take-up of its new south of France service drove the record number of passengers, which marked a 3% rise year-on-year.

The group saw Business Premier passenger numbers leap 10% higher in the three months, with an increase reported on both sides of the channel.

It has already sold more than 88,000 tickets for its new south of France service, which was launched on 1 May and stops at Lyon, Avignon and Marseille.

It has already increased the service from three times a week to five.

Second quarter revenues rose by 1.5% to £232m (€332m) after the buoyant demand, according to Eurostar.

But despite the second quarter boost, Eurostar said half-year revenues overall were 2% lower after a hit in the first three months by a lorry fire that closed the Channel Tunnel, and Paris terrorist attacks in January.

Large movements in foreign exchange rates also had an impact on sales and the group said with this stripped out, half year revenues were 4% higher.

The group added its new fleet of trains are in the final stage of testing, ready to come in to service at the end of the year.

The e320 trains will be able to carry more passengers and boast a new interior design created by Italy's Pininfarina, as well as wifi connectivity and advanced passenger information services.

Eurostar is also refurbishing some of its existing fleet, the first of which will be ready for service in the coming weeks.



EU-US trade negotiations gather pace

Posted 18/07/2015

EU and US officials have said they have picked up the pace in talks on the world's biggest free trade accord, although they did not discuss the main sticking point, which is investment protection.

Negotiations on the Transatlantic Trade and Investment Partnership (TTIP) began optimistically in 2013 but have gotten bogged down on growing reservations in the EU, especially over US demands that private companies be allowed to take governments to court to seek redress.

Earlier this month, the European Parliament said the Investor-State Dispute Settlement (ISDS) system – a feature in other US trade deals – undercut democratic oversight and should be replaced by a public court procedure.

EU chief negotiator Ignacio Garcia Bercero and his US counterpart Dan Mullaney told reporters after the 10th round of TTIP negotiations in Brussels that both sides were committed to pushing ahead with the talks.

"We have worked this week with strong political wind in our wings," Mr Garcia Bercero said, citing recent solid support for the accord in the US Congress, from US President Barack Obama and from the G7 group of top industrial countries.


"We had no discussion on investment protection or ISDS," he said, when asked if the subject had come up.

Mr Mullaney, who cited the recent European Parliament decision as an endorsement for moving ahead, said "both sides now have clear guidance to get TTIP done and to bring home an agreement."

Mr Garcia Bercero said the European Commission, the executive arm of the EU that conducts the negotiations on behalf of the 28-nation EU, understood the concerns voiced over ISDS.

"We will be able to put through a proposal in many ways different from the existing ISDS regime. We will now be working to finalise a proposal once we have gone through discussions with member states and the Parliament," he said.


Source: AFP



Business News

Posted 15/07/2015

Ryanair to bid for IAG slots at London's Gatwick

Ryanair will bid for the slots IAG has agreed to release at London's Gatwick airport as a condition of its takeover of Aer Lingus, its chief executive Michael O'Leary said today.

IAG, which owns British Airways, gained EU approval for its €1.36 billion bid for yesterday evening after agreeing to improve concessions to ease competition concerns, including giving up five slots at the London airport.

"We welcome the proposals by IAG that they would surrender some slots in Gatwick. We will certainly be bidding for the slots and we would certainly want to expand services we offer at Gatwick," O'Leary told a news conference in Brussels, Reuters said.

Ryanair said it would accept IAG's offer for its 30% stake in Aer Lingus last week.

The takeover had been conditional on the backing of Ryanair and the Government, which agreed to sell its 25% stake in May.

Mr O'Leary said Ryanair did not expect to receive the €400m of proceeds for its stake until September, and he said the board would then consider how to spend it.

"Speaking personally I'll be advocating that we use the proceeds to help us pay down aircraft, but there's clearly some interest among our shareholders that they will get some of the proceeds as well," he said.

"The board I'm sure will be generous and do whatever is in the best interest of Ryanair's shareholders."

Ryanair last year placed an order for up to 200 new Boeing BA.N planes and is targeting 50% growth in passenger numbers by 2019.

Meanwhile, the UK's Competition Appeal Tribunal has decided to dismiss Ryanair's latest appeal regarding its shareholding in Aer Lingus.

Welcoming the decision, the UK Competition and Markets Authority also granted Ryanair the necessary approvals to sell its 29.8% stake to IAG.

Ryanair had appealed against the CMA's decision last month that there was no material change of circumstances for it not to require the airline  to reduce its shareholding in Aer Lingus to 5%.

Since that decision, however, Ryanair has announced its intention to sell its shareholding to IAG.

Europe approval 'landmark' in IAG-Aer Lingus deal

The Irish Minister for Transport Paschal Donohoe has said the European Commission's approval of IAG's takeover bid for Aer Lingus is a substantial landmark in the process and that the deal should be completed by Autumn.

Minister Donohoe said the State stands to gain €350-370m from the sale.

This funding will go into a connectivity fund that will be used to lend on a commercial basis to projects that will improve access in and out of Ireland.

In relation to the sale of slots at Gatwick, the Minister said this will increase competition in and out of the airport, adding that the key concern for Government was to protect slots at Heathrow Airport.

He said the takeover would allow Aer Lingus to bring more long haul flights into and out of Ireland, as well as increasing the flow of passengers.

IAG said last night it had secured European Union competition approval for its €1.36 billion bid for Aer Lingus after agreeing to make concessions to ease competition worries.

The Commission had said it had concerns that the merged entity would have faced insufficient competition on several routes and that it would have also prevented Aer Lingus from continuing to provide traffic to the long-haul flights of competing airlines.

It confirmed yesterday that IAG had submitted commitments to release five daily slots at London's Gatwick airport to facilitate the entry of competing airlines on routes from London to Dublin and Belfast.

Willie Walsh, IAG CEOWillie Walsh, IAG CEOIAG, headed up by former Aer Lingus CEO Willie Walsh,  also made a commitment to enter into agreements with competing airlines which operate long-haul flights out of Britain, the Netherlands and Ireland so that Aer Lingus will continue to provide these airlines with connecting passengers.

Adding Aer Lingus to its portfolio of airlines - British Airways (BA), Iberia and Spanish budget carrier Vueling - opens a new avenue of growth for IAG, allowing it to expand capacity on lucrative transatlantic routes by using Dublin Airport.

UK jobless figures see first rise in two years

UK unemployment levels have risen for the first time in more than two years, official figures showed today.

The number of jobless in the UK increased by 15,000 to 1.85 million in the three months to May, the Office for National Statistics said.

It was the first quarterly increase in the number since the three months to March 2013.

"It's possible that the rate of improvement in the labour market that we have seen over the last three years may have eased off, though it is too early to be certain," the ONS said.

But the figures also showed that pay rises continued to accelerate, with average weekly earnings up by 3.2% year-on-year in the three months to May, up from 2.7% in the three months to April.

It is the strongest rate since April 2010 and with inflation hovering at around zero, it means that real terms pay is improving at a rate not seen for nearly eight years.


Regular pay excluding bonuses rose by 2.8%, the highest rate since February 2009.

Today's figures show that the unemployment rate rose to 5.6% after sinking to 5.5% in the three months to April.

There were 30.98 million people in work in the UK in the latest three-month period, 67,000 fewer than in the preceding period. It was the first quarterly fall since April 2013.



While the number of part-time workers fell by 97,000, the number of full-time workers increased by 30,000, the figures showed.

Numbers claiming unemployment-related benefit in June rose by 7,000 to 804,200, the first monthly increase since October 2012.

Speculation about the reason for the rise in unemployment may focus on the fact that the figures cover a period of business uncertainty in the run-up to the general election.

Statisticians said they had no anecdotal evidence to either support or discount the theory.

The worsening jobs picture may also be linked to a weaker-than-expected period of UK economic growth at the start of 2015, but statisticians were also unable to comment on this.

Bank of England governor Mark CarneyBank of England governor Mark CarneyIt comes a day after expectations about a hike in interest rates was heightened by comments from Bank of England governor Mark Carney, who said the timing of a rise was moving closer.

An increase in joblessness may be thought to weaken the likelihood of a hike, though this would be mitigated by the continuing improvement in pay settlements.

Today's data showed the number of those classed as economically inactive rose by 30,000 to 9.02 million in the three months to May.

This was mainly due to more people with long-term sickness.           The group also includes students and people looking after the family or home.

Youth unemployment - for people aged 16 to 24 - fell by 13,000 to 729,000.

The number of people unemployed for more than 12 months reduced by 53,000 to 570,000.


ECB says euro zone bank sector on the mend

Europe's battered financial sector is showing further signs of mending and banks are increasingly competing for custom by lowering credit standards, a key European Central Bank survey showed today.

The ECB said its quarterly bank lending survey showed that banks are easing credit standards for loans to enterprises.

This is seen as an encouraging sign, since the chronic weakness of credit activity has previously been blamed for the absence of any noticeable recovery in the euro zone.

"In the July 2015 bank lending survey (BLS), euro area banks reported a net easing of credit standards on loans to enterprises in the second quarter of 2015," the ECB report said, attributing the development to "competitive pressures."

Banks also reported a net easing of credit standards on loans to households for house purchases, again as a result of competition, it said.

At the same time, demand for loans is increasing, the ECB found.

"Net demand for loans to enterprises increased substantially, owing mainly to the general level of interest rates. Fixed investment also contributed to an increase in demand. Net demand for housing loans continued to increase substantially owing to the low level of interest rates and to housing market prospects," the ECB said.

The euro zone central bank has previously complained that its ultra-easy monetary policy had not been feeding through into the real economy, because banks are not passing the money on in loans, particularly to the small and mid-sized enterprises (SMEs) which are the region's economic backbone.

In an attempt to address this, the bank cut its interest rates to new all-time lows and also embarked on a series of programmes to pump liquidity into the economy.


For example, it is making cheap funding available to banks via its TLTRO or targeted long-term refinancing operation programme on the condition that the banks will lend the cash on to businesses.

Most recently, the ECB embarked on a controversial programme of sovereign bond purchases, known as quantitative easing or QE. 

The ECB said the additional liquidity made available to banks via the TLTROs was being used to grant loans.

Looking ahead to the third quarter, "banks expect no change in standards on loans to enterprises, an easing of standards for consumer credit and a net tightening of credit standards on housing loans," the ECB said.

Source: RTE / Reuters 




EU to rule on IAG-Aer Lingus deal

Posted 10/07/2015

Although this business story is clearly not in the league of the Greek financial saga, it has been rumbling on for nearly as long. It is not a done deal in the world of aviation, but most of the negotiating hurdles have been overcome as the IAG is set to gain European Union competition approval for its €1.36 billion bid for Aer Lingus, after improving concessions to ease competition worries. "The concessions include giving up some airport slots in London and special prorate agreements with rivals," a source said.

Prorate deals typically allow competing airlines to obtain favourable terms allowing them to carry passengers on connecting flights in order to feed into the rivals' own flights. IAG had previously offered only prorate deals but was forced to bump up concessions after the European Commission said these were not sufficient.


The EU competition authority is scheduled to rule on the IAG takeover bid by July 15th.

Earlier, Ryanair said its board had voted unanimously to accept the IAG offer for Ryanair's 29.8% shareholding in Aer Lingus Group.

The Ryanair board said it believes that the current IAG offer maximises Ryanair shareholder value.

The airline said it will now vote in favour of the motion at the Aer Lingus extraordinary general meeting next Thursday.

"We believe the IAG offer for Aer Lingus is a reasonable one in the current market and we plan to accept it, in the best interests of Ryanair shareholders," commented Ryanair's CEO Michael O'Leary.



He said the price means that Ryanair will make a small profit on its investment in Aer Lingus over the past nine years.

The Ryanair approval comes two months after the Government agreed to sell its 25% holding to British Airways owner IAG, which had launched a €1.4 billion takeover bid for Aer Lingus.

The IAG deal offers Aer Lingus shareholders €2.55 per share - comprising €2.50 plus a five cent cash dividend.

Ryanair had fully written down the value of its Aer Lingus stake, built up during several failed takeover attempts of its own dating back to 2006. That means the proceeds, slightly more than Ryanair spent accumulating its stake, will boost its finances.

IAG's proposed offer, its third in a matter of months, was recommended by the Aer Lingus board in January

Shares in both Ryanair and Aer Lingus closed higher in Dublin trade today after the news. but stalled during months of political wrangling before IAG gave the Government reassurances on jobs, routes and landing slots at Heathrow Airport.

The Irish Minister for Transport Paschal Donohoe has welcomed the decision by the Ryanair board to unanimously accept the offer by IAG for shareholding in Aer Lingus.

Minister Donohoe said it represented an important development in the future of Aer Lingus and points to a more secure future for the airline.

He also said it was another important development in the extraordinary progress that Ryanair is making in European and Irish aviation.

Speaking in Co Clare this afternoon Fianna Fáil spokesperson on Tourism Timmy Dooley said the decision made by the board to accept the offer poses real long-term concerns held by industrialists about access, which will be born out in due course.

He said the Government had already taken the decision to dispose of its share in the airline, a decision he disagrees with for reasons which he believes will be born out in the long-term.

Barring a sensational eleventh-hour development it's almost certain now IAG will seal the Aer Lingus deal following the extraordinary meeting of the airline's shareholders next Thursday.

Officially IAG needs to gain control of 90%, under takeover rules here, to compulsorily acquire the stakes of all remaining shareholders. At 75% it could delist the shares from the stock exchange which, from the point of view of the other investors, would mean their stakes in the airline were less liquid and potentially less attractive as an investment.

With the Ryanair shares added to the state's 25.2% stake, IAG now has commitments in respect of 55% of the shares plus a further 4% as the Abu Dhabi airline Etihad has indicated it will accept the offer too. So, at this stage, unless a counter-offer emerges from another quarter IAG's bid is likely to prove persuasive even for shareholders who may have considered holding out or rejecting it.

So, was it worth it for Ryanair to buy into Aer Lingus in the first place? In the narrow sense: no. It spent €407m building the stake between 2006 and 2007. Selling out to IAG will bring in €410m. That's a 0.7% return over the guts of eight years. Not a great investment of its shareholders' money.

Strategically, though, buying the stake may have been a smart move. For starters it prevented any rival taking out Aer Lingus and parking a tank on Ryanair's lawn at a time when the UK/Ireland routes represented a much bigger proportion of Ryanair's revenue and profit than they do now. It also, arguably, cemented the dominance of an Aer Lingus/Ryanair axis in this part of the world.


Remember that the European Commission blocked Ryanair from taking over Aer Lingus because of its concerns it would create a dominant carrier on routes between the two countries. The UK's Competition and Markets Authority has gone even further and delivered a ruling that Ryanair must reduce its stake from 29.8% to 5% because, in its view, having such a large stake in its main rival on services between Britain and Ireland is in itself anti-competitive.

Ryanair argued that the CMA was wrong to conclude that it had the power to block another airline from buying Aer Lingus and cited the IAG offer as evidence. But the fact that the IAG takeover can not succeed without Ryanair's support, even if all other shareholders were behind it, suggests there was merit to the CMA's position.

In agreeing to sell to IAG, Ryanair is making the best of what might have been a bad lot.


Seeing off the IAG bid would have proven a pyrrhic victory if Ryanair then had to accept a much lower price as a forced seller, disposing of its shares at the CMA's direction.

With the Government supporting IAG and indications from Brussels that IAG would be likely to succeed in clearing the regulatory hurdles at which Ryanair failed in its takeover attempts, the low-cost carrier's best option was to take the money and run.



Greek Minister Accuses Creditors of Terrorism

Posted 04/07/2015

Greece's creditors have been accused of "terrorism" by the country's finance minister as Greeks prepare to vote on a possible new bailout deal.

Yanis Varoufakis claimed the International Monetary Fund, European Central Bank and the European Union wanted to "humiliate Greeks" as he argued for a No in Sunday's referendum.

The vote could decide Greece's future as a member of Europe's single currency and comes amid a new warning that a No result could hasten their departure from the euro.

The country's arch-critic - Germany's finance minister Wolfgang Schaeuble - said Greece would remain part of the eurozone whatever happened, but could temporarily lose the single currency.

People across Greece are preparing to vote, with many travelling back to their home regions to do so.

But the most recent polls suggested the result was too close to call, with the nation of 11 million people evenly divided.

Prime Minister Alexis Tsipras believes a No vote would strengthen his hand in negotiations with creditors to get a less harsh deal for a country ravaged by years of austerity, recession and poverty.

However, Yes supporters fear a so-called Grexit from the eurozone and a return to Greece's former currency, the drachma, if Mr Tsipras got his way.

Critics of the government have also complained the very technical bailout question was unintelligible, while eurozone officials said the deal which is referred to expired last Tuesday.

The question is: "Must the agreement plan submitted by the European Commission, the European Central Bank and the International Monetary Fund to the Eurogroup of 25 June, 2015, and comprised of two parts which make up their joint proposal, be accepted?

“The first document is titled 'reforms for the completion of the current program and beyond' and the second 'Preliminary debt sustainability analysis.”

Voters are being asked to tick one of two boxes: "not approved/no" and - below it - "approved/yes."

European Commission chief Jean-Claude Juncker warned Greece's negotiating position would be "dramatically weakened" in the event of a No - and still difficult even in the event of a Yes vote.

Sky's Economics Editor Ed Conway, reporting from Athens, said: "Not that long ago there was the sense that the euro was irreversible and you can't ever leave.

"Now the fact we hear from Wolfgang Schäuble that Greece could leave temporarily - that seems to change matters."


But Conway cautioned: "I think a lot of people would say that what are often considered to be temporary measures turn out to be permanent."

He pointed to the UK leaving the Exchange Rate Mechanism ERM in 1992 which was described at first as a temporary change but ended up being permanent.

The referendum was called as Athens failed to reach a deal with the creditors last weekend on an extension of its bailout programme.

Since then, the country's banks have been closed and capital controls (€ 60 daily limits on ATM cash withdrawals for customers leading to long queues) have been imposed until 6 July.

Mr Varoufakis said whatever the result of Sunday's vote, the banks would reopen and Athens would end up reaching an accord with its creditors.

He said failure to agree a new bailout deal would be too costly for both sides and a trillion euros would be lost if Greece was allowed to crash.

But he also reiterated he would resign if there was a Yes vote. His left-wing Syriza government could also collapse.

He said the "troika" of creditors wanted to "humiliate Greeks" and make them an example of what not to do for other countries, like Spain, where radical left-wing parties are finding increased support.

"What they're doing with Greece has a name - terrorism," he told the Spanish El Mundo newspaper.

"Why did they force us to close the banks? To instil fear in people. And spreading fear is called terrorism," he said, referring to the IMF, ECB and EU.



Brexit more feared than Grexit say European bankers

Posted 25/06/2015

IIF says that Brexit is the bigger potential nightmare for Europe's bankers

The possibility of Britain leaving the European Union sometime in the future worries European bankers a great deal more than the prospect that Greece might be on its way out soon.

Britain's inclusion in the EU is more important to the bloc's long-term future than whatever happens to Greece, bankers attending a financial industry conference said.

Their comments came despite last-ditch talks aimed at keeping Greece solvent and avoiding a possible exit from the euro zone rumble on in Brussels.

"To me, Brexit is the bigger potential nightmare," Tim Adams, president of the Institute of International Finance (IIF), said at the organisation's European meeting in Frankfurt today.

"The UK is such an important part of the European economy and ecosystem. We have one year of uncertainty hanging over us," he added.


British Prime Minister David Cameron has promised to renegotiate Britain's relationship with the EU and then hold a vote by the end of 2017 on whether to stay in the bloc or leave.

Cameron's efforts to start that renegotiation this week have been stymied by Greece, which must persuade its creditors to unlock billions of euros in bailout funds to avoid defaulting on a debt repayment next week.

The IIF was at the heart of the last major effort to stave off bankruptcy in Greece when its officials, along with senior bankers from BNP Paribas, Deutsche Bank and other lenders, spent months renegotiating the terms of Greece's €130 billion debt mountain.



In 2012, private investors, including banks, insurers and hedge funds, swallowed €100 billion in losses.

This time around, Greece's creditors are mostly other euro zone governments and public sector organisations such as the International Monetary Fund.

The IIF is not involved in the talks, nor are the banks, who have all slashed their exposure to Greece.

"We're much better placed for any outcome than we were a few years ago." Ana Botin, chief executive of Spanish bank Santander, told an audience at the IIF meeting.

A majority of about 200 attendees at one session in Frankfurt indicated with a show of hands that they expected Europe to clinch a deal with Greece. A majority, albeit smaller, also said it was right to do a deal.

"The proposals by the Greek government over the weekend showed movement from their part and offers specific measures that I think can be the basis for discussion and eventual compromise," said Hung Tran, who as managing director of the IIF was involved in the 2012 debt restructuring.

But Martin Blessing, chief executive of Commerzbank, which lost nearly €3 billion in the 2012 deal, warned against agreement with Greece at any cost.

"Having a false compromise where in the end you're creating moral hazard for other countries would be the worst solution," Blessing said in an interview with Reuters.

"The Greek population is voting each day by taking money out of the banks. That is not of course a sign of confidence in the politics that the Greek government is pursuing," he added.


Source: Reuters



EU to relaunch Common Consolidated Corporate Tax Base plans

Posted 17/06/2015

EU Finance Commissioner Pierre Moscovici is to bring forward a reformed CCCTB package next year.

The European Commission is to relaunch plans for a Common Consolidated Corporate Tax Base, which will be mandatory for multinational companies operating in the European Union.

EU Finance Commissioner Pierre Moscovici has announced he will bring forward a reformed CCCTB package early in the new year.

It will differ from the existing package, which is deadlocked in disagreement with member states

The new package will propose introducing the regime in two steps, with the first being a common corporate tax base - a common definition of what counts as taxable corporate profit.

Later the Commission will propose a phased in consolidation, or a sharing out of tax revenues. The Commission said there is strong consensus in favour of the idea that companies should pay tax where they make profits.

The Commissioner said he will also bring forward a reform of the transfer pricing regime, and so-called patent boxes which give a preferential tax rate for intellectual property.

He said these allow multinational companies to shift profits around between countries to avoid paying tax. These two measures cover about two thirds of the profits that multinationals move around to avoid tax, he added.

Mr Moscovici said that following his visit to Dublin last month and discussions with Minister for Finance Michael Noonan there was, he believed "room for discussion on this two steps approach".

The Commission is opening a public consultation on measures to increase transparency around corporate tax, including on whether companies should have to report how much tax they pay on a country by country basis in the EU.

EU releases world tax havens blacklist

The European Union published its first list of international tax havens today as part of a crackdown on multinational companies trying to avoid paying tax in the 28-nation bloc.

The list of 30 territories includes Hong Kong and Brunei in Asia, Monaco, Andorra and Guernsey in Europe and a series of Caribbean havens including the Cayman Islands and British Virgin Islands.

The European Commission proposals also include reforms to end sweetheart tax deals following a series of investigations into arrangements between EU countries and firms including Amazon, Apple and Starbucks.

"We are today publishing the top 30 non-cooperative jurisdictions consisting of those countries or territories that feature on at least 10 member states' blacklists," Commissioner Pierre Moscovici told a news conference.

The former French finance minister said the publication of the blacklist was a "decisive step" that would "push non-cooperative non-EU jurisdictions to be more cooperative and adopt international standards."

The full list is: Andorra, Liechtenstein, Guernsey, Monaco, Mauritius, Liberia, Seychelles, Brunei, Hong Kong, Maldives, Cook Islands, Nauru, Niue, Marshall Islands, Vanuatu, Anguilla, Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Grenada, Montserrat, Panama, St Vincent and the Grenadines, St Kitts and Nevis, Turks and Caicos, US Virgin Islands.

But critics say the publication of the list risks being seen as an attempt to distract from the EU's need to tackle its own issues with tax avoidance.

Today's tax proposals are a response to the so-called "LuxLeaks" scandal that exposed deals with the tiny EU state of Luxembourg that saved some of the world's largest companies, including Apple, IKEA and Pepsi, billions of dollars in taxes.

The dealings in Luxembourg have been particularly embarrassing for Jean-Claude Juncker, now the head of the European Commission, who was the small duchy's premier when the deals were made.

The EU is also looking to build on existing probes into the tax dealings of Apple in Ireland, Starbucks in the Netherlands and Amazon and Fiat in Luxembourg.


Are emoji PIN codes the next move in banking security?

Posted 16/06/2015

A British start-up is pushing for banks to switch the traditional four-digit code to a selection of emoji images, easier to remember and harder to crack.

An inventive new way of dealing with modern banking and the problems over how to come up with a better PIN code when taking money out of an ATM or using a credit card – by replacing the numbers with emoji.

 The small icons, Intelligent Environments argues, are actually easier to remember than a four-digit number, while also being complex and varied, making it significantly more difficult for someone to steal. Having crunched the numbers on probabilities, the company claims that there are 7,290 permutations of four non-repeating numbers, but when it comes to employing emoji for the same task, there are 3,498,308 from a selection of just 44 icons.

Intelligent Environments quotes memory expert Tony Buzan as having said: “The Emoji Passcode plays to humans’ extraordinary ability to remember pictures, which is anchored in our evolutionary history. 

Watch Intelligent Environments explain the concept.

We remember more information when it’s in pictorial form, that’s why the Emoji Passcode is better than traditional PINs.

As of now, no banks appear to have signed up to this rather unusual concept of safer banking, so it will probably be quite some time before – if ever – we actually need to look over our shoulders at the ATM while typing smiley, wink, rosy cheeks, medical mask to take out a crisp €50 or pound note.


By James Dempsey - newstalk



EU-CELAC Summit Highlights - BrusselsGuadalupe del OlmoGuadalupe del Olmo

Posted 10/06/2015

By Guadalupe del Olmo

The European Union and Latin America and the Caribbean have enjoyed privileged relations since the first bi-regional Summit, held in Rio de Janeiro (Brazil) in 1999, which established a strategic partnership. They are natural partners linked by strong historical, cultural and economic ties. They co-operate closely at international level and maintain an intensive political dialogue at all levels.

Regional Summits take place every two years since January 2013, date of the first summit between the EU and the Community of Latin America and Caribbean states (CELAC), established in 2010 as a new region-wide political organisation and therefore new counterpart for the EU. Brussels hosts the 2015 Summit on 10-11 June and is themed "Shaping our common future: working for a prosperous cohesive and sustainable societies for our citizens."

The EU pursues sub-regional relations with Central America, the Caribbean, the Andean Community and Mercosur. Bilateral relations are increasingly dynamic.

EU-CELAC -A Strategic Partnership for the 21st century

The Community of Latin American and Caribbean States (CELAC), launched in 2010, is a regional mechanism for political dialogue and cooperation.

For the first time , it involves 33 countries of Latin America and the Caribbean (LAC). It has merged the  Rio Group (political consultation forum) and CALC (“Cumbres América Latina y Caribe” – internal LAC Summits). EU-CELAC relations are structured around biennial summits, regular senior officials' meetings as well as specific thematic dialogues and initiatives including: From now on CELAC will be the EU's counterpart for the bi-regional partnership process, including at summit level.

The Joint Initiative on Research and Innovation fosters sustainability and social inclusion through a targeted focus on science, research, technology and innovation.

The EU-CELAC Structured Dialogue on Migration  provides a framework to exchange best practices and build capacities that can help to address bi-regional migration challenges.

The EU-CELAC Coordination and Cooperation Mechanism on Drugs  provides a policy dialogue structure aimed at tackling the world drug problem and is a reflection of the shared and common responsibility in this area.

The economic character of the relationship has also intensified these last ten years. The EU is linked to most non-EU Caribbean countries through an Economic Partnership Agreements. Free trade areas have been fully in force with Mexico and Chile since 2000 and 2005 respectively. Efforts are underway to update and modernise these two agreements.

The free part of the agreements between the EU and Colombia and Peru has been  provisionally applied since 2013. Ecuador initialled its accession protocol to this Agreement in December 2014. Central America and EU parties are provisionally applying a free trade area since 2013. Negotiations for a free trade area continue with Mercosur.

The EU is the main development partner of the LAC region, its second largest trade partner and its first investor.



Alliance4YOUth - Conference at the European ParliamentRandall CalvinRandall Calvin

Posted 08/06/2015

By Randall Calvin

The “Alliance for YOUth” is a business-driven movement to promote a better transition from education and training to employment for our youth across Europe. The “Alliance for YOUth” wants to be a change agent in sharing knowledge and experiences to solve local barriers to youth employment.

The “Alliance for YOUth” members are committed to contributing to the following pillars:

1) Strengthening the supply of high quality apprenticeship and traineeship positions on an individual or joint basis. Apprenticeships are the preferred option, however in situations where this is not possible, quality traineeship positions will be offered as a valid alternative. Programmes facilitating labour mobility are as well part of this commitment.

2) The individual or joint organisation of/participation to readiness for work programmes (career consultation, CV clinics, etc.) in close coordination with educational institutions and youth organisations.

3) The sharing of knowledge and experiences with education providers, authorities at all levels, trade unions, business organisations and youth associations through the European Alliance for Apprenticeships Ambassador network. “Alliance for YOUth” members will nominate ambassadors on an individual basis but will share experience from across the “Alliance for YOUth”.

In a statement by Commissioner for Employment, social affairs, skills and labour mobility, Marianne Thyssen, said creating jobs, through growth, competiveness and skills matching is at the heart of this new Commission. This is my absolute priority for the next few years. Today we find ourselves in a paradoxical situation.

On the one hand five million young people are unemployed and 7.5 million are neither in education, training or employment. On the other hand there are more than two million vacancies and many employers report difficulties in finding people with the right skills. This clearly points to the need to align skills to labour market needs. She highlighted that to achieve this we need a closer cooperation between the world of education and the world of work. And we need more practical learning in the workplace. Strengthening the cooperation between the education sector and employers is key if we want to achieve good results in the long term. Too often, the worlds of education and work are disconnected. Apprenticeships – a scheme which demands strong cooperation between schools and employers – deliver real and fast results.

Ms Thyssen underlined that apprenticeships make it much easier for young people to transit from education and training to work, and to provide the skills that companies need in order to grow. This is why we launched the European Alliance for Apprenticeships almost two years ago - a multi-stakeholder platform to strengthen the supply, quality and reputation of apprenticeships. Since it was launched, the European Alliance for Apprenticeships has mobilised initiatives from Member States, social partners, chambers, business organisations, Vocational and Educational Training providers, youth organisations and others. On 22 June, we will organise a big event in Riga in cooperation with the Latvian Presidency where we aim to give a new boost to the European Alliance for Apprenticeships. We aim in particular to make our dialogue with the private sector even more solid. 

She was pleased to have the Alliance 4 Youth as part of the European Alliance for Apprenticeships. The Alliance 4 Youth partners set the example for other companies when it comes to investing in the future of young people as a way to invest in their own business. She said "you will be very interested in the results they will show you today, one year after their pledge to create more than 100,000 jobs and training opportunities in Europe. The Alliance 4 Youth, and all of its member companies, are ambassadors when it comes to demonstrating the importance of business involvement in the education and training of young people. I hope more companies will follow in your footsteps."



Cameron to discuss global corruption at G7 summit

Posted 06/06/2015

The Prime Minister said the example of FIFA should spur leaders to reduce corruption worldwide

The bribery scandal in FIFA should spur the international community to target the "cancer" of corruption around the globe, David Cameron will tell world leaders at a G7 summit this weekend.

At talks in Bavaria, the Prime Minister will call for an international effort to root out corruption, claiming it is holding back economic growth and human development all over the world.

Ahead of the G7, Mr Cameron said: "In the last fortnight we have seen the stark truth about FIFA. The body governing football has faced appalling allegations that suggests it is absolutely riddled with corruption.

"And (Sepp) Blatter's resignation this week presents an opportunity to clean up the game we love. It is also an opportunity to learn a broader lesson about tackling corruption.

"Just as with FIFA, we know the problem is there, but there is something of an international taboo over pointing the finger and stirring up concerns. At international summits, leaders meet to talk about aid, economic growth and how to keep our people safe. But we just don't talk enough about corruption.

"This has got to change. We have to show some of the same courage that exposed FIFA and break the taboo on talking about corruption."

"Corruption is the cancer at the heart of so many of the problems we face around the world today," Mr Cameron said, adding that corruption "doesn't just threaten our prosperity, it also undermines our security."

"Football is beginning a long journey to rid itself of corruption and it will take time, courage and determination to see through the reforms that FIFA needs. I believe world leaders must show the same courage and determination to tackle corruption around the globe. That will be my mission tomorrow at the G7 and in the months and years ahead."

Mr Cameron will join US President Barack Obama, French President Francois Hollande, Italian PM Matteo Renzi, Canadian PM Stephen Harper and Japanese PM Shinzo Abe for the two-day gathering, hosted at Schloss Elmau in the Bavarian Alps by Germany's Chancellor Angela Merkel.

Mrs Merkel has put climate change and sustainable development at the top of the agenda for the annual summit of the world's leading industrialised economies beginning on Sunday, which will also focus on growth, security and the threat from terrorism and disease epidemics.

But Mr Cameron will argue that the issue of corruption - which he put at the heart of the UK's agenda for its presidency of the body in 2013 - has a bearing on all these areas and must be discussed openly as part of the debate.

He will cite World Bank estimates that corruption adds 10% to business costs worldwide, with $1tn (£650bn) paid in bribes every year.

The Organisation for Economic Co-operation and Development (OECD) believes corruption costs around 5% of global GDP annually, while in developing countries it can add 25% to the cost of procurement, Mr Cameron will say.

Seven of the 10 most corrupt countries in sub-Saharan Africa are also in the bottom 10 on the human development index and infant mortality is twice as high in countries with the most corruption as in those with the least.

Mr Cameron will say that there is an onus on world leaders to do what they can to tackle the issue, and will call for action in the coming months to focus the efforts of the various international organisations tasked with combating corruption and ensure that they are working effectively with one another.

Anti-corruption measures should be at the heart of the new United Nations development goals for the coming 15 years due to be agreed in September, he will say.

Demonstrations over climate change, wealth inequality and the proposed Transatlantic Trade and Investment Partnership (TTIP) US/EU free trade deal are expected outside the heavily guarded G7 venue, with a protest camp set up in the nearby town of Garmisch-Partenkirchen and around 35,000 attending a pre-summit rally in Munich on Thursday.



EU- Japan Summit in Tokyo

Posted 30/05/2015

The 23rd bilateral summit between the European Union and Japan took place yesterday in Tokyo, Japan.

European Commission President Juncker, European Council President Tusk and Japanese Prime Minister Abe held a press conference, their joint statement is available here.

The ongoing negotiations for a strategic partnership agreement and a free trade agreement were on the Agenda of the Summit.


Speaking at the Keidanren, Japan's main industry federation, Commissioner for Trade Cecilia Malmström, in Tokyo to discuss these negotiations, said: "We believe that if this deal is worth doing, it's worth doing right. We have to be ambitious on the substance as well as on the timing."

The EU and Japan are not only joining forces on trade, but also on the front of technology, research and innovation, with a new 5G agreement to cope with the increasing need for wireless Internet and complement current efforts to create a Digital Single Market in Europe.

The agreement will allow to work towards a common understanding and standards of 5G, identify new harmonised radio band frequencies for 5G spectrum and cooperate on future 5G applications in areas like connected cars or e-health.

In parallel, the EU and Japan have also agreed to deepen their cooperation on Research and Innovation (R&I).

The agreement will build on the strong research ties in areas like ICT and aeronautics and strengthen collaborations in health and medical research, environment, energy and physics. The partners will also set up a joint funding mechanism that will make it easier to finance common R&I projects and collaborate more closely on policy aspects, like Open Science. The EU has also signed an agreement to stimulate scientific exchanges between its European Research Centre (ERC) and the Japan Society for the Promotion of Science (JSPS).



Yanis Varoufakis on Riga:

"Lies flowed for weeks like an out of control sewer"

Posted 25/05/2015

By Joseph Conroy - Newstalk

The Greek minister challenges reports of a breakdown during his negotiations with eurozone ministers.

Yanis Varoufakis has taken to his blog in an attempt to set the record straight regarding the Eurogroup meeting in Riga on April 24th which has been described as the 'Rumble in Riga.'

Eight of those who were present at the meeting broke decorum and spoke of a breakdown in relations, which allegedly ended in the trading of personal insults and Mr Varoufakis being accused of wasting the other ministers' time.

He says that these 'leaks' were untrue, and presented the world with "a preposterously false view of what was being said" in the meetings.

This fed into a broader narrative that reported that Alexis Tsipras had sidelined Mr Varoufakis due to the breakdown in relations - he describes this as not "even remotely true."

The minister adds the following clarifications:

  • My fellow ministers never, ever addressed me in anything other than collegial, polite, respectful terms.
  • I did not lose my temper during that meeting, or at any other point.
  • I continue to negotiate with my fellow ministers of finance, leading the Greek side at the Eurogroup.

He also comments on the media's coverage of suggestions that he had betrayed the trust of the Eurogroup by covertly recording the meeting, saying that he recorded some of his input on his phone with the purpose of drawing up a briefing note to circulate with the Greek government when he returned to Athens.

"I stood firm against the torrent of lies that flowed for weeks like an out of control sewer. I desisted all provocation and refused to divulge anything of what was said in the meeting," the minister continues.


Mr Varoufakis ends with a series of messages:

To my detractors I have this to say: "You have not had any leaks from me during or after any of my meetings. Indeed, no one has respected the confidentiality of those meetings more than I – even during the days and weeks I was being provoked by the news media’s false, personal attacks regarding those meetings."

To fellow Europeans I add this: "Perhaps it is time we became a little more sceptical about the journalism we rely upon as citizens. And perhaps we should query European institutions in which decisions of monumental importance are made, on behalf of Europe’s citizenry, but in which minutes are neither taken nor published."

He concludes: "Secrecy and a gullible press do not augur well for Europe’s democracy."


Meanwhile Greece to keep repaying creditors as long as it can - says a government official.

Athens has been scraping state coffers to meet debt obligations and to pay wages and pensions in recent weeks.

Struggling Greece will keep on repaying, for as long as it can, its EU-IMF creditors, who have demanded reforms and withheld release of the country's remaining bailout funds, a spokesman said today.

"To the extent that we are able to pay, we will keep on repaying these obligations," government spokesman Gabriel Sakellaridis told reporters.

"It is the government's responsibility to be able to repay all these obligations.... It is also the responsibility of the creditors to be faithful to (their) loan obligations," he added.

Sakellaridis's remarks came a day after a cabinet minister said Greece had "no money" to make a series of repayments to the International Monetary Fund from  June 5.

"The instalments for the IMF in June are €1.6 billion. This money will not be given.  There isn't any to be given. This is a known fact," Interior Minister Nikos Voutsis said yesterday.

Greece's government has been locked in negotiations with its creditors - the IMF, the European Union and the European Central Bank - for the past four months in a bid to unlock some €7.2 billion in bailout cash.

The Syriza-led government, which was elected in January on an anti-austerity platform, has so far refused to agree to key economic reforms that the creditors want in exchange for the rescue funds.

But with a punishing debt repayment schedule in the next three months, the country now desperately needs those funds.

Last week, the parliamentary spokesman for Syriza had also said that the government would be unable to honour repayment to the IMF as its priority is to pay salaries, pensions and running costs.

"No country can repay its debts with only the money from its budget," Nikos Filis told Ant1 television.



Airbus warns investment at risk if UK leaves EU

Posted 21/05/2015

The European aerospace and defence giant Airbus would reconsider investment in the UK in the event of Britain leaving the European Union.

Paul Kahn, president of the 16,000-employee Airbus UK, said Britain must compete for international investment.Paul KahnPaul Kahn

"The best way to guarantee this is by remaining part of the EU," he said.

Earlier, Chancellor George Osborne said in a speech to the CBI employers' group that he wants the UK "to be in Europe, but not run by Europe".

Prime Minister David Cameron has promised a referendum on the UK's EU membership by the end of 2017, and the matter has been rising up the political and business agenda.

On Monday, the chairman of construction equipment firm JCB said the UK should not fear an exit from the EU.

And on Wednesday, the president of the CBI, Sir Mike Rake, said businesses should "speak out early" in favour of remaining in a reformed EU.

Mr Kahn, speaking to the BBC's industry correspondent John Moylan, said that with a UK referendum on leaving the EU perhaps less than 18 months away, companies like Airbus needed to be at the forefront of the debate.

"I believe that it is vital for a company such as Airbus to come out and make a stand in favour of Britain remaining in the European Union," he said.


'Reconsider investment'

Airbus, the world's second-largest planemaker after Boeing, employs 6,000 people at its site at Broughton, north Wales, where it assembles the wings for all Airbus aircraft.

Several thousand more people are employed at Filton, near Bristol, designing wings and testing landing gear.

He stressed that if Britain were to leave the EU, the company would not suddenly close.

But he added: "If after an exit from the European Union, economic conditions in Britain were less favourable for business than in other parts of Europe, or beyond, would Airbus reconsider future investment in the United Kingdom? Yes, absolutely."

Airbus is one of Europe's biggest industrial enterprises spanning civil aviation, defence and space, with operations in Germany, France and Spain.

If Britain were to leave the EU Mr Kahn suggested the company could face more red tape in areas such as work visas and trade barriers.

He said he was not "blindly supporting Britain's membership of the EU," adding: "I welcome the UK government's intentions to deliver positive and hoped-for reforms - which would create a leaner and more efficient EU."

His comments came on the day that Mr Osborne told business leaders at the CBI that the government would be fighting for a reformed Europe.

He acknowledged in his speech that some businesses might "want us to leave the EU come-what-may. And there are also those, including some in this room, who want us to go further into a more federal Europe."


But the chancellor said: "Our position - which I think is shared by the majority of British people and a majority of British businesses - is that we want Britain to be in Europe, but not run by Europe. The problem of making the single currency work is inevitably drawing its members toward ever-closer integration. We don't want to be part of that integration. The challenge for us is to ensure that while this happens we protect the single market, and make sure the EU continues to work in the interests of all 28 member states, including Britain."

Europe, he said, had "priced itself out of the global economy" with a raft of rules, regulations and red tape.

EU membership is in UK's national interest - CBI

Businesses should "speak out early" in favour of remaining in a reformed European Union, the president of the Confederation of British Industry says.

Sir Mike Rake will argue at the group's annual dinner that firms "must be crystal clear that membership is in our national interest."

There are "no credible alternatives" to EU membership, Sir Mike will say.

In the run-up to his speech, Sir Mike told the BBC's Today programme: "We need to remind ourselves that we're part of a market of 500 million people to which 50% of our exports go.

"Most businesses and governments want to see a reform that allows us to grow. Reforms can be made that we believe can improve our competitiveness without the need for treaty change."

This evening, Sir Mike will say that it is now time for business to "turn up the volume" on the "crucial issue" - "speaking out clearly and in a language which people can understand."

He will tell the 1,000 businessmen and women, and politicians: "In the months to come, our country will have to make its own choice. A choice between openness and isolation, between shaping the future or retreating into the past. The question is not whether the UK would survive outside the EU, but whether it would thrive."


Reform needed

But he will also call for the UK to redouble its efforts to secure EU reform.

"Reform will not happen overnight, but by working with our allies on an ambitious, yet achievable, agenda, we can make it a reality," he will say.

Businesses so far appear divided over the historic vote.

The British Chambers of Commerce director general John Longworth said on Monday that 55% of his members were in favour of a "reformed Europe", and said the "in-out debate is more nuanced than a lot of people would have us believe".

In contrast, the chairman of construction equipment maker JCB said that the UK had nothing to fear from the UK's exit from the European Union.

"We are the fifth or sixth largest economy in the world. We could exist on our own - peacefully and sensibly," Lord Bamford told BBC Midlands Today.

However, many have urged the government to bring forward the referendum to end the prolonged wait.

Mr Longworth said the in-out referendum should "take place as soon as is practical" and Labour party leadership contender Andy Burnham has also called for the promised referendum on Britain's membership to be brought forward.



Greece wants loan deal by end of May, says government

Posted 19/05/2015

Greece faces a hefty repayment schedule to the IMF and the ECB in the coming months

Greece needs to strike a deal with its creditors by the end of the month to stay afloat, the government has said, as investors ditched Greek bonds in a sign of growing concern about possible bankruptcy.

Despite its precarious position, Athens said it would not abandon its "red lines" in talks with the International Monetary Fund and euro zone partners.

These include a debt restructuring, a lower target for the primary surplus to take in more than it spends apart from debt interest payments, and a pledge to make no further cuts to pensions or wages.

"We are not putting red lines because we have a fetish about these red lines," said Greek Government spokesman Gabriel Sakellaridis.

"We think they are necessary elements of a deal so that we don't once again have the problems of the past."

But in a sign of the pressure facing Athens, Germany's central bank said the Greek government, which took office in January promising to roll back years of bitter austerity, needed to honour past reform pledges to stave off insolvency.


"A sustainable solution is not possible without substantial reform in Greece," the Bundesbank said.

Fearing the worst, investors sold off Greece's debt, with two-year bond yields rising 289 basis points to 23.99% - the largest daily raise in more than a month. Ten-year yields rose 76 bps to 11.54%.

Nevertheless, Athens' main stock index closed up 1.6%, reversing an earlier fall of 2%.

Sakellaridis said public sector salaries and pensions would be paid this month, but made clear cash was running out, with the state owing the International Monetary Fund some €1.5bn next month.

"There should be a solution in May so we can resolve our liquidity issues," he told a news conference.


Greece has been in talks with its creditors over the past four months about the release of some €7.2bn in aid, and there is a growing feeling that the end game is at hand.

The government says many of the demands of lenders would make the situation worse by hurting economic growth. The labour minister told reporters that restoring collective bargaining rights for unions and scrapping planned pension cuts should be included in any deal struck with lenders.

Greek newspaper To Vima said the European Commission had prepared a possible compromise, proposing that creditors should accept a lower primary surplus target from Greece in return for tax reform and hike in sales taxes.

The report lifted the Athens stock market, but the Commission in Brussels and the Greek government both denied any knowledge of such a proposal.

Although the negotiations have progressed painfully slowly, the European Union's monetary affairs chief said earlier that the two sides had narrowed their differences and praised Athens for being more constructive on privatisations.

"We have moved closer to common understanding on reforms to be adopted in a number of areas," European Economic and Monetary Affairs Commissioner Pierre Moscovici told reporters in Berlin, citing Greece's value-added tax system, its independent revenue administration and the control of non-performing loans.

But he also saw a rapidly closing window of opportunity. "We have got to conclude before the end of May," he said.

If Greece defaults, it might be forced to abandon the single currency, which could trigger the collapse of an economy that has already been battered by years of bitter austerity.

For months, the government has been borrowing from different parts of the state administration to meet its spending needs, but its options are evaporating.

For months, the government has been borrowing from different parts of the state administration to meet its spending needs, but its options are evaporating.

"Greece is running on fumes and the risk of non-payment of some form is riding high ... These are desperate times and desperate stakes," Rabobank strategist Richard McGuire said.

Source: AFP


Meanwhile, the speed of the recent European government bond market sell-off is worrying, a senior ECB rate setter said today.

But he added that overall the move was a normal correction as the more pessimistic growth and inflation assumptions were reversed.


European Central Bank Executive Board member Benoit Coeure said the bank's asset buying would rise slightly in May and June to account for lower market liquidity in the summer holidays in July and August - but not to counter the market sell-off.

The bank may also buy more assets in September to smooth out its transactions and keep the monthly average at € 60 billion, he said.

"I do not see the recent reversal in the price of Bunds and other sovereign bonds as a cause for concern, insofar as it reflects a market correction," Coeure said in a closed-door speech yesterday that was published today.

"It is the rapidity of the reversal that worries me more. After several similar episodes, it is yet another incident of extreme volatility in global capital markets showing signs of reduced liquidity," he said.

The sell-off in euro zone bond markets over the last two weeks has been the sharpest since the euro's introduction.

Normally rock-solid 10-year German Bund yields have gone from near zero at the end of April to over 0.7% last week, an unexpected reversal as the ECB is buying € 60 billion of assets per month as part of its quantitative easing programme.

Though the ECB could in theory lower its deposit rate further into negative territory from the current -0.2%, Coeure said he did not wish to remove the zero lower bound underpinning interest rates.

Source: Reuters




Euro zone's Q1 GDP weaker than expected as Germany underperforms

Posted 13/04/2015

Euro zone economic growth was slightly weaker than expected in the first quarter because of slower than anticipated expansion in Germany.

But the rate of growth in the euro zone was still the fastest in almost two years, data showed today.

The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.4% quarter-on-quarter in the three months from January to March.

Economists polled by Reuters had expected a 0.5% quarterly expansion.

The growth in the euro zone economy is likely to have been helped by cheap energy and food prices, a weak euro and European Central Bank money printing so far this year.

The quarterly expansion was still the strongest since the second quarter of 2013 and marks a steady acceleration over the growth rates in 2014.

But German growth slowed by more than expected as foreign trade weighed on Europe's largest economy. Germany's economy grew 0.3% on the quarter after chalking up a 0.7% expansion in the final three months of 2014.

That undershot the consensus forecast in a Reuters poll for 0.5% growth.

It was also far weaker than in neighbouring France, where the economy expanded by a surprising 0.6% on the quarter, its strongest rate in two years, and beating market expectations of a 0.4% expansion.

The euro zone's third biggest economy Italy grew slightly more than expected thanks to a pick up in domestic demand, fuelling hopes of a recovery this year after three years of recession.

Italian GDP rose 0.3% following stagnation in the last quarter of 2014 and was flat on an annual basis. This was better that an average forecast of a 0.2% rise quarter-on-quarter.

Meanwhile, Greece, struggling to secure more funding from international creditors in exchange for growth-boosting reforms, contracted 0.2% on a quarterly basis but grew 0.3% year-on-year.



Bank of England keeps interest rates at record low of 0.5%

Posted 11/05/2015

The Bank of England has kept interest rates steady at a record-low 0.5%, judging that the outlook for prices and wages is still too weak for it to raise the cost of borrowing despite solid growth prospects.

The Bank issued no statement but governor Mark Carney will explain more on Wednesday, when he presents a quarterly update to the central bank's forecasts for growth and inflation.

Most economists do not expect the BoE to raise interest rates - which have been unchanged for more than six years - until early 2016, and none of those polled by Reuters last week expected the BoE to raise rates this month.


The US Federal Reserve is expected to start raising rates this year, followed by the BoE.

The European Central Bank is further behind as it is in the early stages of a major stimulus programme to revive the euro zone economy.

Analysts are waiting to find out when the BoE expects inflation to return to its 2% target after slumping to a record-low zero percent in February and March due to a tumble in global oil prices.

The BoE delayed its interest rate decision from last week to avoid clashing with a national election which unexpectedly saw prime minister David Cameron's Conservative Party return to power with an outright majority.


Economists say the election result is likely to reinforce the BoE's view that there is no need for interest rates to rise soon as Cameron's government will continue to tighten fiscal policy with the aim of eliminating its budget deficit by 2019.

In February the BoE forecast it would take around two years for inflation to return to target, while growth would continue at an above-average pace of just under 3%, as the country makes up ground lost during the financial crisis.

Since then, growth in the first three months of this year has come in weaker than the Bank expected at just 0.3%.

Economists think the BoE may have to nudge down its growth forecasts on Wednesday.

However, last month the central bank also noted that markets had priced in only a very slow pace of rate rises – something which may push up the inflation forecast derived from the BoE's economic models.

Mr Carney may address market expectations on interest rates when he speaks at 10.30am on Wednesday.

In April, markets were pricing in no rate move until September 2016 and for rates to rise slowly after that.  Now, markets expect a rise in around a year's time.

Markets have been repeatedly wrong footed on rates by the BoE. Almost a year ago, it warned that they were underestimating the chance of a rate rise, causing a jump in sterling. Then oil prices tumbled, reducing pressure to fight off inflation.


Source: Reuters


Moody's sees UK rating risk if country votes to leave EU

Posted 08/05/2015

Ratings agency Moody's said the election victory of Prime Minister David Cameron might have implications for the Britain's sovereign debt rating if it led to the country leaving the European Union.

Mr Cameron has promised to hold a referendum on Britain's membership of the EU before the end of 2017.

"While the election result will have no impact on the UK's rating, if the Conservative Party's plan to hold a referendum on European Union membership results in the UK's exit this could have consequences for the whole economy, including potentially for the sovereign rating, if the UK was unable to broadly replicate the benefits of membership," Moody's said.


Meanwhile, Britain's stock market surged higher today after David Cameron's Conservatives unexpectedly won the election, giving the party another five years in power.

The blue-chip FTSE 100 index had gained over 2% this afternoon to stand at 7,031, within touching distance of the record high of 7,122.74 points reached last month.

It was headed for its biggest one-day percentage gain since early January.

The FTSE 250 mid-cap index jumped 2.9% to set an all-time high as the election results came through, pushing the Conservatives towards an overall majority and overturning poll predictions of a hung parliament.

Many investors had backed the Conservatives over the opposition Labour Party.


Labour had set out tough new regulations on industries such as banking, utilities, property and gambling which could have hit the profits of companies in those sectors.

The FTSE 350 Utilities index moved up 4.2% - the biggest one-day percentage gain in six years - on the prospect of less regulation in the sector.

The Labour party had wanted to give the energy regulator the power to force firms to cut prices in response to falls in wholesale costs.

UK banks were up about 2.6% as the election results removed fears of a break-up of the biggest banks and further hikes in a tax on banks' assets. Shares in Lloyds, RBS and Barclays were up between 4% and 5.9%.

Shares in bookies chain Ladbrokes surged nearly 10% on relief that the opposition party, which wanted a new levy on online betting, was out of power.             

Property stocks were also seeing a relief rally as Labour's "mansion tax" proposals and "use it or lose it" policy for developers who own land that could be used for homes had unnerved investors. On the other hand, the Conservatives plan to expand a "Right to Buy" programme to allow people living in social housing to purchase their homes at a discount.

Housebuilders Berkeley Group, estate agents Savills, Country Countrywide, Foxtons and online property search company Zoopla up 6.6-8.8%.     

And shares in Sports Direct jumped over 4%. The company is a large user of zero hours contracts, which were seen as being under threat by a Labour-led government.

Sterling was also on course for its biggest daily rise against the euro and dollar since 2009.

But while the short-term political risks may have diminished, the longer-term risk of Britain holding a referendum to leave the European Union remains, particularly for sterling.

Sterling jumped more than 1% against the dollar to trade above $1.55 for the first time since late February, and rallied 2% against the euro to 72.40 pence per euro.


EU - key principles 'non-negotiable' in talks with UK

The EU said today it was ready to work with Britain's re-elected Prime Minister David Cameron on his reform demands but said key principles including the freedom of movement were not up for negotiation.

Cameron has pledged to hold a referendum on membership of the European Union by 2017 and wants changes to the bloc's treaties on issues including migration.

"I confirm that the four freedoms in the treaty are non-negotiable. They are non-negotiable because they are the essence of the EU," Margaritis Schinas, a spokesman for European Commission President Jean-Claude Juncker, told a daily briefing. 


"The European Commission stands ready to work constructively with the new British government, and, yes, President Juncker looks forward to meeting David Cameron soon," he added.

He pointed out that Juncker had opened the door for "minor" treaty changes in comments last month but ruled out any altering of the four key treaty principles of free movement of goods, services, capital and people.

"First we want to see and receive the UK proposals on reform, and of course in the spirit of openness, friendliness and constructive spirit we are ready to discuss those in our quest for a fair deal with Britain."

"Treaty change is something that is not that easy but it's also part of a longer-term perspective of how we organise the European Union," the spokesman added.



Euro zone's growth outlook raised

Posted 06/05/2015

The European Commission announced its Spring Economic Forecast yesterday, the Commission said that exports and private sector investment were continuing to drive growth.

It also said that domestic consumption was a contributory factor in higher growth rates, however, the Commission expressed concern about the risks posed to the recovery by pressures to increase public sector pay, and a general risk that competitiveness could be eroded if wage increases were not in line with in productivity.


"The main risks around the deficit projections are persisting spending pressures linked to demographics and possible increases in public sector pay," the forecast concluded.

The Commission also noted that high levels of private and household debt meant that domestic spending "remains uncertain."

"Bank net lending to households and non-financial companies continues to decline as demand remains subdued and companies use retained earnings for investment. Nonetheless, the profitability of the domestic banks continues to improve, which should boost their capacity to extend credit," the report said.

"Inflation will remain very subdued in 2015, given that energy prices are still low. In 2016, inflation is forecast to rise in line with expectations in the euro area," the report said.

The report said that risks to the economy could include the prospect that further paying down of household debt could dampen domestic spending, while an increase in wages, "if not in line with productivity, could erode competitiveness."

Euro zone economic growth to accelerate to 1.5% in 2015

Meanwhile, euro zone economic growth will be stronger than previously expected this year thanks to cheaper oil, a weaker euro, stable global growth and supportive fiscal and monetary policies.

In its quarterly economic forecasts of main economic indicators for the whole 28-nation European Union and the 19 countries sharing the euro, the EU executive arm also forecast a pick-up in inflation later this year and declining unemployment.  The Commission expects euro zone economic growth to accelerate to 1.5% in 2015 from 1.3% forecast three months ago. It kept unchanged its previous forecast of 1.9% growth for next year.

Meanwhile, Greece's economy suffered an alarming slump in the first three months of 2015, the European Commission said, in a dangerous development as Athens continues to battle its EU-IMF creditors.

The EU executive cut its overall 2015 growth forecast for Greece to 0.5%, a huge reduction from its earlier prediction of 2.5%.

"The European economy is enjoying its brightest spring in several years, with the upturn supported by both external factors and policy measures that are beginning to bear fruit," said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs.

Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and CustomsPierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs

As the economy accelerates, so does euro zone inflation - the Commission raised its forecast for consumer price growth this year to 0.1% from a price fall of 0.1% forecast three months ago. Next year consumer prices are likely to rise 1.5% rather than 1.3% expected earlier.

Stronger growth will also help bring down unemployment more quickly-- the Commission now expects an unemployment rate in the euro zone of 11% this year and 10.5% next year, down from 11.2% and 10.6% respectively projected earlier.

The euro zone's aggregated government deficit will also be smaller than previously expected at 2% rather than 2.2% this year and at 1.7% in 2016, rather than the previously forecast 1.9%.

Euro zone debt has peaked last year at 94.2% of GDP, the Commission said, and will now fall to 94% this year and 92.5% in 2016. Three months ago the EU executive arm expected debt would only peak this year at 94.4%. 



McDonald's announces turnaround plan

Posted 04/05/2015

McDonald's has said it would vastly reorganise its international operations and sell off more corporate sites to franchisees as it strives to reverse a trend of sagging sales.

The US fast-food burger giant said its overseas markets will be organised by their maturity within the McDonald's system, rather than by region. 

Its current structure splits markets outside its home US market into Europe and Asia/Pacific, Middle East and Africa.

McDonald's "international lead" segment will be more mature markets such as Australia, Britain, Canada, France and Germany, "which operate with similar economic and competitive dynamics."

The "high-growth" segment will be those with higher expansion potential, including China, Italy, Switzerland, Russia and South Korea, the world's largest fast-food chain said.

Remaining regions will go into the "foundational" markets unit.

"Our new organization creates a structure under which leadership of McDonald's new segments will be able to more effectively address the common needs of their markets and customers," said new chief executive Steve Easterbrook.

With 36,000 outlets in over 100 countries, the home of the "Big Mac" has been under pressure from falling customer traffic and revenues for two years, due to a range of challenges including changing consumer tastes and more agile rivals.

Faced with slower sales, McDonald's in January picked Mr Easterbrook to replace Donald Thompson as chief executive.

In addition to announcing the reorganisation of international markets, Easterbrook said the company would refranchise 3,500 sites by the end of 2018, lifting the share of its franchised restaurants from 81%  to 90% worldwide.

The company also said it would achieve $300m (€268m) in annual cost savings by the end of 2017, in part through the additional refranchising.

It pledged to return $8-9 billion (€7- 8bn) to shareholders in 2015.

Dow member McDonald's shares slipped 0.2% percent to $97.59 (€87.48 in opening trade).




Euro zone business growth at seven-month high in February

Posted 04/03/2015

Price cutting and a weaker currency helped euro zone business activity accelerate in February, according to new surveys.

The surveys were published just before the European Central Bank embarks on €1 trillion stimulus programme.

Survey compiler Markit said the surveys pointed to first quarter GDP growth of 0.3%, the same as at the end of 2014, as business activity expanded in all of the bloc's four biggest economies for the first time since last April.

That growth prediction matches the median forecast in a Reuters poll taken last month.

"The outlook has brightened for all countries. The weaker euro should help boost exports and, perhaps most importantly, the commencement of quantitative easing by the ECB should stimulate the economy as we move through the year," said Chris Williamson, chief economist at Markit. 

The euro has fallen nearly 8% since the start of the year against the dollar, helping drive Markit's final February Composite Purchasing Managers' Index (PMI) up to a seven-month high of 53.3.

Although weaker than a preliminary estimate of 53.5 it comfortably beat January's 52.6 and achieved its 20th month above the 50 level that separates growth from contraction.

A PMI covering the euro zone's dominant service industry rose one point from January to 53.7 but was similarly lower than a flash reading of 53.9.

To encourage demand, firms have been cutting prices for almost three years - the output price index again came in sub-50 at 47.9.

The ECB has been battling to bring inflation back to its near 2% target - euro zone inflation stood at -0.3% in February.

As part of that battle, and to stimulate growth, the central bank plans to flood markets with cash.

Service firms were optimistic about the plan as their business expectations for the coming 12 months were at their highest since May 2011.     The sub-index was 64.1.




Earlier this year...

Euro zone exits deflation, unemployment stable – Eurostat

Posted 30/04/2015

Inflation in the euro zone was at 0% in April

The euro zone exited four months of deflation in April, official data showed today, reversing a dangerous bout of declining prices and reviving hopes of economic recovery in Europe.

Inflation in the euro zone hit 0% in April, after a drop of 0.1% in March, with low energy costs still impacting the cost of living, the EU statistics agency Eurostat more...



Not lovin' it: McDonald's record losses in all regions

Posted 22/04/2015

By Joseph Conroy

The golden arches seem to be losing their appeal

McDonald's first quarter results show a 2.3 percent decrease in sales - the company attributes this to "negative guest traffic in all major segments" - this is corporate speak for 'less people are going to McDonald's in all regions.'

Consolidated operating income fell by a significant 28 percent - revenues decrease by 11 percent, but most of this drop was due to fluctuations in currency more...

TTIP negotiation advancing behind closed doors Guadalupe del OlmoGuadalupe del Olmo

Posted 21/04/2015

By Guadalupe del Olmo

As the ninth round of TTIP negotiations began in New York, the European Commission yesterday published an in-depth survey of SME’s attitudes to the deal.

Almost 900 companies from 25 Member States were surveyed. The report finds that SMEs are already big winners from transatlantic trade. 150,000 SMEs exported to the United States in 2012, accounting for 28% of all EU exports there (equating to approximately EUR 77 billion).

SMEs in sectors linked to food, beverages & agriculture; clothing, textiles & leather; as well as chemicals had an above-average share of EU more...


UK competition authority stands firm on Ryanair ruling

Posted 19/04/2015

UK's CMA has published a provisional verdict on Ryanair request

Ryanair had asked the CMA to reconsider its 2013 decision.

In the seemingly never-ending saga of the IAG takeover of the

Irish national carrier, the UK's Competition and Markets Authority (CMA) said it would not change an order for Ryanair to sell down its 30% stake in rival Aer Lingus because of IAG's proposed bid for Aer Lingus. more... 

Greece will not get delay on debt repayments - IMF chief Christine Lagarde

Posted 16/04/2015

Christine Lagarde said the IMF board had not granted a payment delay in the last 30 years

International Monetary Fund chief Christine Lagarde has strongly rebuffed talk of Greece obtaining a delay on its debt payments to the Fund.

"It's clearly not a course of action that would actually fit," she said, adding: "We have never had an advanced economy ask for payment delays."

"Payment delays have not been granted by the board of the IMF in the last 30 years," she continued at a news conference as the IMF and World Bank spring meetings were getting underway in Washington. more...



ECB reaches money-printing target in first month

Posted 08/04/2015

The ECB has committed to buying €60 billion of assets a month with newly created money until September 2016

The European Central Bank bought almost €61 billion of government bonds and other assets in March, it said yesterday.

This just beat its target in the first month of a programme designed to revive the euro zone economy.

The ECB has committed to buying €60 billion of assets a month with newly created money until September 2016, or longer if needed to get inflation back on track to hit its target of just below 2%.

Purchases of public-sector bonds started on March 9, while those of other assets such as covered bonds and asset-backed securities began earlier. more... 

Euro zone manufacturing picks up as weak euro boosts exports

Posted 01/04/2015

Manufacturing activity across the euro zone accelerated faster than previously thought last month, adding to signs the euro economy is recovering.

Any indication of a pick-up in growth will delight the European Central Bank, which embarked on a quantitative easing programme in March.

It is aiming to buy around €60 billion of bonds every month to drive up inflation and spur the recovery.

Markit's final March manufacturing Purchasing Managers' Index (PMI) was at a 10-month high of 52.2, beating a flash reading of 51.9.

It was the 21st month it has been above the 50 mark that separates growth from more...




Greece sends list of planned reforms to EU and IMF

Posted 29/03/2015

The Greek economic saga continues…

Greece has said it would boost state revenue by € 3 billion this year - though it would not introduce more 'recessionary measures'

Greece has sent its creditors a long-awaited list of reforms with a pledge to produce a small budget surplus this year in the hope that it will unlock badly needed cash.

The European Union and IMF lenders, informally called the Brussels Group, started discussing the list last Friday, a euro zone official said, although a Greek official said the examination would begin on Saturday.

Their approval, followed by the blessing of euro zone finance ministers, will be needed for Athens to unfreeze further aid and stave off more...


EU proposes tax reforms amid tax avoidance controversies

Posted 18/03/2015

It hopes that there will be greater transparency between member states.

New legislation unveiled by the European Commission hopes to force EU governments to share details of their tax deals with multinational corporations with their European partners.

The Commission hopes that this will lead to self-policing by EU states, as all European tax authorities will be able to review each state's tax systems.

This falls short of campaigners hopes that tax policies would be shared in public documents. more...


Goldman Sachs predicts the euro will fall through parity with the dollar within a year

Posted 15/03/2015

Goldman slashes euro forecasts, sees new low $0.80 by end-2017

US investment bank Goldman Sachs today cut its forecasts for the euro.

The bank predicted that the euro will fall through parity with the dollar within a year and plunge to a new record low of $0.80 by the end of 2017.

Goldman's outlook for the euro is now the gloomiest of all major financial institutions. more... 


Majority of Germans say Greece should leave euro

Posted 13/03/2015

More than half of Germans believe Greece should leave the eurozone, according to a poll published this morning.

The Politbarometer survey released by public broadcaster ZDF found 80% believe Greece is not acting in a reliable manner in its negotiations with eurozone partners.

The proportion of respondents who think Greece should stay in the currency union has fallen to 40% from 52% two weeks ago, while 52% now believe it should leave, up from 41%.

Only 11% now think the left-wing government in Athens is behaving in a trustworthy way in talks with its EU partners, and only 14% believe the Greek government will actually implement the austerity and reform measures it has committed to, while 82% doubt it. 80% believe Greece should get no more bailout funds if it fails to follow through on its pledges, according to the survey conducted by the Mannheim Research more...


EU makes possible Russia-Ukraine deal on gas delivery

Posted 08/03/2015

Moscow and Kiev have agreed on a gas delivery deal to ensure Ukrainian gas consumption until the end of March, with Ukraine guaranteeing an undisputed transit of gas to the EU, after an EU-brokered trilateral gas talks in Brussels.

"am satisfied that we managed to safeguard the full application of the Winter Package for the supply needs in Ukraine," European Commission Vice President responsible for energy Maroš Šefčovič , who chaired the trilateral talks, said in a statement this week.

Russia asked Ukraine on Friday to complete payment for Russian gas on the day to guarantee gas supplies in March, warning that in line with last October's agreements reached in Brussels, supplies will stop if no money is received. more...

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