Spring is coming late for the global economy. Recently International Monetary Fund adjusted its forecast for the global economy, projecting it will grow just 3.3 percent in 2013, a prediction that some analysts insist is overly optimistic.The United States and China are showing strained growth, while recession in the eurozone remains a nagging headache for EU policy makers.No Spring break in USSluggish global economies may have to look elsewhere if they were counting on a robust US economy to serve as a locomotive through the tough times.Job growth slowed dramatically in March, with payrolls going up by 138,000 workers, which compares to almost the three year best of 332,000 in February. Although the unemployment rate remains at 7.6 percent, some 500,000 Americans dropped out of the labor market altogether, thus skewering the official data.Some companies may have increased hiring in January and February, in expectation of an economic rebound in 2013, but then switched gears in March when the sales figures failed to meet expectations, John Silvia, chief economist at Wells Fargo, told CNNMoney.”The slower hiring will certainly make people less optimistic about economic growth going forward,” said Silvia.At the same time, US home sales fell in March, according to the latest data put out by the National Association of Realtors.The Realtors’ report on the sale of previously owned homes on Monday showed the annual sales rate in March came in at 492,000, down 0.6% from February.Finally, new data released on Tuesday shows US factories reporting their weakest growth levels in six months in April.The US data “will obviously add significantly to concerns, most recently related to the softer China and German data, that another seasonal slowdown in the global economy is taking hold,” Alan Ruskin, Deutsche Bank’s head of G10 currency strategy, told the Financial Post.Some are blaming the lacklustre data on the government’s deep spending cuts have only just begun, and will total $85 billion through September. They’re expected to prevent the U.S. economy from growing beyond 2% this year.Meanwhile, international corporate bellwethers, like Caterpillar and McDonald’s, have recently pointed to the lacklustre global economy as a drag on their businesses.The question that many analysts are now attempting to answer is whether the downturn is a temporary blip on the radar screen or the start of something much bigger.In any case, the sluggish economic indicators inside of the eurozone and the United States are partially to blame for the downturn in one of the world’s hottest economies.Germany and the EUThe eurozone received a nasty wakeup call when it was reported that Germany, the largest economy in the EU, witnessed a contraction in its services and manufacturing sectors in April.It was the first drop in business activity in Germany in five months. Now the question arises whether Europe’s stringent austerity measures and budget cuts may have gone too far, leaving the European consumer less willing to spend money.Some of the economic signals point in that direction. There was an unexpected contraction in EU orders in March to Taiwan, one of the region’s largest suppliers of tech gadgets and appliances.And who could forget Cyprus, the once-popular offshore tax haven, which recently took the unprecedented and hugely unpopular step of seizing investors’ deposits in a desperate bid to avoid a total collapse of its banking system? Although the move may have saved the island, it did little in terms of restoring a sense of confidence on the continent.Add to this climate of uncertainty the unexpected drop in German business activity, and the public frustration over deep spending cuts, it appears likely that European Central Bank will continue dropping interest rates in a bid to get Europe spending its money again.”We stand ready to act again,” said European Central Bank President Mario Draghi.“With Germany unable to offset the austerity and credit crunch drag on growth in the (less dynamic parts of the eurozone), and with excess capacity growing and business expectations falling, the only question is why the ECB has not cut rates already,” commented Lena Komileva, director of G+ Economics.As the debate looms, yields on government bonds for Italy, Spain, Portugal and Ireland dropped to their lowest levels in more than two years, on expectations the European Central Bank will eventually be forced to shave its key interest rate.Chinese dragon snoringIn the first quarter, the Chinese economy grew at a slower pace than economists had expected, raising questions about the rate of recovery in the world’s second-biggest economy.Gross domestic product grew 7.7 percent over the previous year during the first quarter, the National Bureau of Statistics reported Monday. Although that is a bit faster than the government’s projected target of 7.5 percent, it is below the 8 percent anticipated by economists.In the fourth quarter of 2012, growth was 7.9 percent.Meanwhile, separate reports on industrial production and retail sales also performed less well than expected.The HSBC Purchasing Managers’ Index for China in April fell to 50.5 in April from 51.6 in March but was still stronger than February’s reading of 50.4.Asian markets reacted negatively to the news, with most indices falling about 1 percent.Economists at HSBC, one of the world’s largest banking and financial services company, said the news could prompt more investment by the government in a bid to ensure growth.”This should prompt a stronger policy response mainly in the format of more fiscal spending in the coming months,” they said in a released note. “Once fiscal spending is delivered, growth should be lifted in the coming quarters. But the magnitude of the growth acceleration will depend on the dose of policy response.”The Chinese economy has averaged growth of around 10% a year in the past three decades, but officials, concerned about too much loose credit in the economy as well as the potential for a housing market bubble, do not want to stimulate the economy.Earlier this month, Fitch, the ratings agency, warned over excessive debt levels in China and delivered a downgrade on the local currency.Fitch believes local government debt levels are so high that Beijing will eventually be forced to assume part of the burden.‘Abenomics,’ the Japanese ModelAmidst this low-level panic in the global markets, economic policy makers may require some new ideas aside from unpopular austerity measures.In a move away from western initiatives, Japan has recently launched a wide-scale stimulus program known as “Abenomics,” named after Prime Minister Shinzo Abe. The initiative includes investment in public spending programs and the easing of monetary policy from Japan’s central bank.It may take some time for Japan’s experiment in Keynesian economics to take hold. Andrew Kenningham, senior global economist at Capital Economics, said he expects the Japanese economy to grow just 1 percent this year.”The massive monetary stimulus should lead to higher inflation in the short term, but it is not clear that it will lead to stronger economic activity,” Kenningham told CNN.Japan’s demographic situation also presents a problem. Japan’s ageing population and shrinking labor force point to sluggish growth down the road.And Japan is certainly not alone as it travels down that road, as many of the world’s biggest economies are wondering if poor first quarter results are an ominous sign of things to come, or just another part of the business cycle. …
In Germany, 39 people were injured by a lightning strike at a Father’s Day party in Dabel, a village around a 160 kilometres from Hamburg.
Eight of the wounded are believed to be in serious condition.
Several trees and a electrical switch box were hit by the strike.
A woman at the party described what happened: “All of a sudden there was a big bang and people were thrown away from the beer cart. Then there was chaos.”
Around 500 people were at the party when the lightning struck. Many were treated for shock.
More about: Germany
Copyright © 2013 euronews
Two suspected ETA terrorists arrested in France 26/06/2012 10:43 CET
ETA may ‘disband’ if it can negotiate release of… 25/11/2012 03:05 CET
French minister says “not my decision” over Batasuna… 04/11/2012 09:36 CET
Suspected head of Basque separatist group seized in… 28/10/2012 15:14 CET
Spain’s Basque region calls early election 21/08/2012 20:03 CET
Six alleged members of the Basque separatist group
ETA have been arrested in France.
This comes after their suspected leader, who is considered a terrorist by the European Union and the USA, got a life sentence in April, for the murder of two Spanish officers in France in 2007.
A source close to the case has reportedly said, investigators located two of the alleged members several days ago and put them under surveillance before making the arrests.
The ETA is blamed for 829 deaths in a four decade campaign of bombings and shootings for the Independence for the Basque Country of Northern Spain and Southwestern France.
At a press conference The Spanish interior minister, Jorge Fernandez Diaz congratulated Spanish Police and French security. “This operation is an important step towards the dismantling of ETA and proof of its defeat by police and the law. The ETA we have known and suffered through in Spain for decades, will not exist again.”
The six men were arrested in Blois, a city in central France Brive la Gaillarde, and Montpellier in the south west of the country
The organisation announced a a seize fire in October of 2011 but is yet to formally disarm and Spanish government has refused to hold talks with its leaders.
Copyright © 2013 euronews
The timeline isn’t clear, but the German software giant SAP thinks it’s time to get out of selling on-premise software. SAP is offering its advanced in-memory computing product, HANA, as a cloud service, and says everything else will go there. No word on prices, or on what Oracle and AWS will do. …
The registration process has opened in Iran for candidates to succeed Mahmoud Ahmadinejad in next month’s presidential election.
Reports say more conservatives than reformists have put themselves forward.
Most candidates are thought to want to defuse tensions with the West and a change from Ahmadinejad’s confrontational style.
Hasan Rowhani, a former nuclear negotiator and an advisor to former President Rafsanjani, is among the frontrunners.
“By forming a government of prudence and hope, I want to save the economy, re-establish morality in society and have constructive interaction with the world, and present honesty and righteousness to the people,” Rafsanjani said.
The candidates have five days to declare their intention to stand. Iran’s Guardian Council will then decide whether they can.
President Ahmadinejad is prevented by the constitution from running for a third term.
His controversial re-election four years ago prompted major unrest. The leaders of the reform movement from that time remain under house arrest.
Copyright © 2013 euronews
EU leaders rattled by UK plans for a referendum on… 24/01/2013 07:22 CET
British PM David Cameron warns EU leaders to protect… 24/01/2013 13:25 CET
Cameron’s EU carrot to tempt Euro-sceptic voters 23/01/2013 11:05 CET
Cameron’s EU carrot for Euro-sceptic voters 23/01/2013 13:04 CET
UK-EU relations still divisive in Britain 23/01/2013 17:15 CET
Britain would be better off economically if it left the European Union, according to Nigel Lawson, the man who ran the country’s finances between 1983 and 1989.
“I strongly suspect that there would be a positive economic advantage to the UK in leaving the single market,” Lord Lawson wrote in the Times newspaper. “In my judgment the economic gains would substantially outweigh the costs.”
Lawson is the most senior Tory politicians to support withdrawal from the EU. His voice will give credibility to his more junior party counterparts who have been calling for Prime Minister David Cameron to bring legislation for a prompt yes/no referendum on the country’s membership of the EU.
The question of Europe has been divisive for the Conservative Party for decades. The issue helped in bringing down two recent prime ministers, Margaret Thatcher and John Major. Lawson himself voted to stay in the EU in 1975, but said the recent debt crisis in the Eurozone has fundamentally changed the EU and that he would vote to leave it if a referendum were to be held.
Mr Cameron, who came to power in a coalition government in 2010, pleaded with his party to “stop banging on about Europe”. He promised in January to renegotiate the terms of Britain’s EU membership and to hold an “in-out” referendum if he is re-elected in 2015. However, he has not succeeded in calming his backbench MPs.
As if an internal war was not enough for the Prime Minister, the right wing UK Independence Party (UKIP) has been gaining steadily in polls and gained in last week’s local elections. It has been hinted that if Cameron does not find a solution to appease his party members, the chances of defections to UKIP may be high.
Cameron’s renegotiation policy that focuses on a new, looser relationship with Europe in order to boost the British economy attracted the support of 500 business leaders. Others fear the referendum pledge comes with years of dangerous uncertainty that will deter foreign investment in Britain and upset allies in the EU, Britain’s biggest trading partner. Trade with EU in 2012 amounted to 51 per cent, both imports and exports, according to HMRC.
The UK has been a member of the union since 1973. Cameron’s spokesman said the prime minister wants the EU to change and “wake up to the modern world of competition,” adding “our continued membership must have the consent of the British people, which is why the PM has set out a clear timetable on this issue.”
By Ali May
Copyright © 2013 euronews
Russian stocks closed higher on Monday, with the MICEX up 0.38 percent to 1,413.43 and the RTS adding 0.16 percent to close at 1,432.15.European markets saw minor losses on Monday: The LSE was closed for a holiday, while other major indices saw slight corrections following strong gains last week. The German DAX 30 fell 0.13 percent to 8,112.08 points in Monday trading, France’s CAC 40 slipped 0.15 percent to 3,907.04 and the Spanish Ibex 35 closed 0.48 percent lower at 8,503.8 points, with banking shares among the biggest losers.Germany will release official data on factory orders on Tuesday, May 7, and France will publish data on industrial production later in the day.US stocks traded mixed on Monday: The S&P 500 set another record-high close at 1,617.50, up 0.19 percent, the Dow Jones slipped 0.03 percent to 14,968.89, and the Nasdaq grew 0.42 percent to 3,392.97. Bank of America demonstrated strong gains on news of a major mortgage securities settlement.Asian markets saw no big drivers on Tuesday due to cooling sentiments on the better-than-expected US jobs report. Tokyo stocks have come roaring back following a four-day holiday amid strong performance in Europe and the US. Japan’s Nikkei jumped 2.6 percent to 14,083.26 for the first time since June 2008, boosted by the US jobs report. Hong Kong’s Heng Seng and the Shanghai Composite in mainland China are trading flat. South Korea’s Kospi has fallen 0.37 percent, and Australia’s S&P/ASX 200 has declined 0.3 percent.Oil is trading lower, with Brent down 0.4 percent and WTI down 0.6 percent. …