stagflation there too
| Actual | Forecast | Previous | |
| 6:00am EUR CPI y/y (p) | 3.2% | 3.1% | 3.1% |
| 6:00am EUR Consumer Confidence | -12 | -10 | -9 |
| 6:00am EUR Unemployment Rate | 7.2% | 7.1% | 7.2% |
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Category Archives: EU
Poland cutting demand
This has been much the same for new members that previously had higher budget deficits.
It firms the Euro and keeps unemployment higher than otherwise.
[Before the euro, tight fiscal was ‘offset’ by the national CBs bought $ (I call that ‘off balance sheet deficit spending’) which supported employment and net export growth. While exports are a real cost, and this process thereby came at a real cost to the domestic standards of living, it did make the numbers (GDP, employment) look good.]
Poland likely to slash deficit in euro convergence plan
(Thomson Financial) Poland is likely to lower the public sector deficit in its new convergence programme for joining the euro, targetting a cut in its deficit to 1 pct of gross domestic product by 2011, a deputy finance minister said today.
He also said the government would aim to cut the 2009 deficit by several billion zlotys from the 27.1 bln zlotys planned for this year.
“From the convergence programme which should be approved by the government and sent to Brussels, it is possible that in 2008 the general government deficit will be 2.6-2.7 pct (of GDP), and in 2009 2-2.5 pct,” Stanislaw Gomulka, one of Poland’s four deputy finance ministers, said today. “In 2010 it may be around 1.5 pct and in 2011, 1 pct. I think the discussion will concern these levels,” Gomulka told reporters on the sidelines of a conference in Warsaw.
Asked by Thomson Financial News about next year’s deficit, he said: “The government may assume in its work on the 2009 budget, a deficit of several billion zlotys lower than the 27.1 bln zlotys planned for 2008.” The government normally lodges its initial budget assumptions in the middle of year after several months of consultations with other ministries.
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2008-01-18 EU Highlights
With the US Fed cutting aggressively, and now a reasonably large US fiscal package a near certainty, the mainstream will see increase in US demand as further support for world prices.
They have no economic theory to support this.
In fact, mainstream theory would more likely be inclined to call this policy subversive, as it sees inflation as the primary risk to optimal long term growth and employment. And they see the real costs (in terms of lost output) to bring down inflation, once allowed to elevate, as far higher than any possible near term gains from adding to demand in the short run.
Highlights:
| EU’s Almunia Says Inflation ‘Is on the Rise’ Due to Oil Prices |
| ECB’s Weber Doesn’t Expect Inflation Far Below Ceiling in 2009 |
| Liebscher Sees Prices Easing by Year-End |
| ECB Says Banks Expect Funds Squeeze in Coming Months |
| Trichet discounts productivity gain |
| German Economy on a Solid Foundation in 2008: Finance Minister |
| French Growth to Be About 2.25% in 2008, Sarkozy Spokesman Says |
| Spain House Price Inflation Slowed to 4.8% in Fourth Quarter |
| Spanish Mortgage Lending Growth Decelerates to 15% in 2007 |
| Portugal’s Dos Santos Says Slowdown May Be Worse Than Forecast |
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2008-01-16 EU Highlights
Overall, inflation and weakness continues:
| European Inflation Holds Above 3% as Food Prices Soar |
| German 2007 Inflation Fastest Since Records Began |
| France: Inflation up to 2.3% in Q4 sunk real wages, spending |
| ECB’s Weber Says Shouldn’t `Over-Dramatize’ Inflation Jump |
| Europe’s Economies Face `Stagflation’ Risk This Year |
| Weber Says ECB Won’t Tolerate Excessive Pay Increases |
| European Car Sales Rose in 2007 on New Fiat, BMW Models |
| German First-Quarter Growth to Slow to 0.3 Percent |
| Bank of Italy Cuts 2008 Growth Forecast Due to Euro, Inflation |
| Bank of France Cuts Fourth-Quarter Growth Forecast to 0.4% |
| French Populace Grows to 63.8 Million, Second-Highest in Europe |
| Iceland delays banks’ plans to adopt the euro |
Good choice.
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2008-01-15 EU Highlights
EU Headlines:
Same twin themes as the US, weakness and inflation:
| Spain Core Inflation Rises for Fifth Month on Food |
| German Economic Growth Slowed as Sales Tax Increased |
| German Investor Confidence Dropped to 15-Year Low |
| French inflation at highest level since 2004 |
by Ben Sills
(Bloomberg) In France, the euro region’s second-biggest economy, inflation accelerated to 2.8 percent in December, the fastest pace in almost four years. Inflation held at 3.1 percent for the whole of the single currency area, matching the fastest pace since the euro was introduced.Controlling Prices
The European Central Bank is “prepared to act preemptively so that second-round effects and risks to price stability do not materialize,” President Jean-Claude Trichet said at a press conference in Frankfurt Jan. 10.
By Christian Vits and Gabi Thesing
(Bloomberg) ECB policy makers, including President Jean-Claude Trichet and the Bundesbank’s Axel Weber, have threatened to raise interest rates if the increase in inflation leads to so-called second-round effects where workers demand higher wages to offset increased living costs.
| European Bonds Gain for Second Day as German Confidence Slumps |
anticipating ECB may cut due to weakness like the Fed
| Prodi Government Names Antonio Lirosi as First `Inflation Czar’ |
| Germany Says ECB’s Independence Won’t Be Questioned |
They support the anti-inflation bias.
| Portuguese Inflation Slowed to 2.7% in December on Transport |
still high
A few highlights from Middle/Eastern Europe:
| Romania Will Cut Budget Gap More to Fight Inflation |
Fiscal tightening in general – slowing demand in the Eurozone.
| Czech Producer Prices Unexpectedly Declined 0.1% in December |
Still high and rising.
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2008-01-14 EU Highlights
European News Headlines:
| Europe Industrial Production Falls for Second Time in 3 Months |
Fed beggar they neighbor policy robbing some demand.
| European Bonds Gain on Speculation ECB Won’t Lift Interest Rate |
inflation on the rise
| Bonello Says Inflation May Slow to 2% by End of Year |
He also says this will happen if oil and other prices come down ‘as expected’- must be looking at futures prices.
| Italian Industrial Output Falls for Third Month in November |
| Norway Expects to Drill 35 to 40 Oil-Exploration Wells in 2008 |
High prices may bring out more supply – some day.
| Icelandic January Inflation Holds at Highest Since March |
same everywhere
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2008-01-09 EU Highlights
Fed will take heat for conducting a weak $, beggar thy neighbor, inflate your way out of debt policy, as it will be seen US exports are robbing demand from eurozone, while price pressures rise, spreading stagflation around the world.
| Highlights: |
| ♦ Europe’s Economic Expansion Exceeds Earlier Estimate |
| ♦ German Output, Exports, Retail Sales Unexpectedly Fall on Oil |
| ♦ German Nov industrial output down 0.9 pct from Oct, cons up 0.4 pct |
| ♦ Germany May Cut Forecast for 2008 GDP Growth, Steinbrueck Says |
| ♦ European Trade Union Says Wage Growth Is No Threat to Inflation |
| ♦ French November Trade Deficit Widens to EU4.8 Billion |
| ♦ December inflation surprising, rates may grow further |
[source: Bloomberg]
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