The newly appointed Italian “Ministry of the Economy” had said…

truly insulting!

The euro zone is at risk of snatching defeat from the jaws of victory by abandoning efforts to cut budget deficits and fix long-standing economic problems.

The growing perception that austerity has been futile is incorrect.

Fiscal consolidation is producing results, the pain is producing results

Euro-zone policy makers need to do a better job of communicating their successes to a weary population.

EU to share costs of closing banks

Just what they need, another tax:

Under the proposal, the costs of closing down a bank in the first year of operation would be fully covered by a fund set up by the home country where the bank resides.

Such funds would be set up in every euro zone country and each would be filled from fees paid in by banks in the respective countries, amounting each year to 0.1 percent of all covered deposits they hold.

Posted in EU

Morgan Stanley on eu

German IFO, GDP & Eurogroup: After last month’s drop to 107.4, MS Research expects the IFO business climate to decline by further 0.4 points to a reading of 107.0 in November. They would expect both business expectations for the next 6 months and current business conditions to have corrected, with the expectations component losing more. The drop in sentiment underscores the fragile nature of the economic recovery and the rising concerns of business leaders about the economic policies likely to be pursued by the Grand Coalition. The PMIs yesterday confirmed that growth in the euro area has stalled in 2H. That said, a surprise shock to the downside will further strengthen case for further ECB measures. We also have the release of Q3 GDP where MS research expects growth to have decelerated materially, with headline growth declining from 0.7%Q to just 0.3%Q. On the policy front, Eurogroup finance ministers will discuss the European Commissions recommendations on the 2014 draft budgets. Market participants are likely to pay close attention to France, Italy and Spain.

comments on euro zone and india

Do you think they know austerity causes loans to go bad?

Troubled loans at Europe’s banks double in value (FT) European banks’ non-performing loans have doubled in just four years to reach close to €1.2tn and are expected to keep rising. A report by PwC found that non-performing loans (NPLs) rose from €514bn in 2008 to €1.187tn in 2012, with rises in the most recent year driven by deteriorating conditions in Spain, Ireland, Italy and Greece. It predicted further rises in the years ahead because of the “uncertain economic climate”. Richard Thompson, a partner at PwC, said the “reshaping” of European bank balance sheets had several more years to run as lenders shed troubled and unwanted loans and attempted to strengthen their balance sheets. He estimates European banks are sitting on €2.4tn of non-core loans that they plan to wind down or sell off. The first eight months of 2013 have seen €46bn of European loan portfolio transactions, equal to the entire amount recorded in 2012.

Do you think they know higher rates support higher inflation and weaken the currency?

India’s Central Bank Expects Inflation to Remain Stubborn (WSJ) The Reserve Bank of India Monday sounded concern about inflation, which it said would remain outside its comfort zone this fiscal year. In its half-yearly review of macroeconomic and monetary developments, released a day before its monetary-policy meeting, the RBI also highlighted the need to boost economic growth. But its stress was more on inflation. Inflation at the wholesale level—the main measure of prices in India—notched a seven-month high of 6.46% in September. It has remained above the central bank’s comfort level of 5% for four consecutive months through September. The RBI said it expects both consumer and wholesale inflation to remain around their current levels. “This indicates persistence of inflation at levels distinctly above what was indicated by the Reserve Bank earlier in the year,” it said.

Greek youth unemployment soars to 64.9pc

The EU is a failed state.

Greek youth unemployment soars to 64.9pc

By Szu Ping Chan

August 8 (Telegraph) — Repeated doses of austerity under international bailouts have almost tripled Greece’s jobless rate since its debt crisis began in 2009, weighing on an economy in its sixth year of recession.

Unemployment rose to 27.6pc in May from an upwardly revised 27pc in April, according to data from statistics agency ELSTAT. This is more than twice the average rate in the eurozone, which stood at 12.1pc in June, and is the highest reading since Greece’s statistics office began publishing monthly jobless data in 2006.

This means there are now almost 1.4m people out of work in Greece, and 3.3m people who are considered economically inactive.

Joblessness in the 15-to-24 age group jumped to 64.9pc, from 57.5pc in April.

Greek prime minister Antonis Samaras will hold talks with US President Barack Obama later on Thursday.

Mr Samaras is keen to secure US approval for stimulus policies for Greece’s recession-hit economy, in contrast to the austerity emphasis preferred by many of its European partners, most notably Germany.

In an interview with Greek newspaper Kathimerini, US vice president Joe Biden said America had “a stake” in Greece’s economic recovery and wanted the crisis-hit nation to stay in the eurozone.

“The administration has always taken the view that it’s overwhelmingly in our interest to have Greece remain a strong and vital part of the eurozone,” he said.

“We have a stake in Greece’s success,” Mr Biden added.

More on EU Private Sector Credit Expansion

ECB Says Bank Loans to Private Sector Shrink Most on Record

By Jeff Black

July 25 (BN) — Lending to companies and households in the 17-member euro area fell the most on record in June in a sign the region is still struggling to shake off its longest-ever recession.

Loans to the private sector dropped 1.6 percent from a year earlier, the Frankfurt-based European Central Bank said today. That’s the 14th monthly decline and the biggest since the start of the single currency in 1999.

The rate of growth in M3 money supply, which the ECB uses as an indicator for future inflation, fell to 2.3 percent in June from 2.9 percent in May, according to today’s data. That’s below all 30 estimates in a Bloomberg survey of economists.

M3 grew 2.8 percent in past three months from the same period a year earlier. M3 is the broadest gauge of money supply and includes cash in circulation, some forms of savings and money-market holdings.

Euro Zone Output Down in May as Recovery Remains Fragile

Interesting how the weakness seems to be shifting to Germany and France?

Euro Zone Output Down in May as Recovery Remains Fragile

By Martin Santa

July 12 (Reuters) — Euro zone factory output fell in May for the first time in four months, data showed on Friday, suggesting a fragile and uneven recovery in the bloc that is struggling with record joblessness and renewed political tensions in southern Europe.

Industrial production in the 17 countries using the single currency fell 0.3 percent on the month, following a revised 0.5 percent increase in April, data from the EU’s statistics office Eurostat showed.

Economists polled by Reuters had expected a 0.2 percent decline in May.

Compared with the same period last year, factory output in May dropped as expected by 1.3 percent, after a 0.6 percent contraction in April.

Production in Europe’s two biggest economies, Germany and France, dropped in May, with Italy and Spain showing small increases. Overall, factory output was dented by a 2.3 percent drop in the production in durable goods, such as cars and TVs.

Germany, France, and Italy account for two-thirds of the euro zone’s industrial output.