Quantcast
Home » Debt crisis You are browsing entries tagged with “Debt crisis”

Asian shares lifted by hopes for end to US debt crisis

People walk by an electronic stock board of a securities firm in Tokyo on Oct. 4, 2013. Asian shares were mostly higher Wednesday, Oct. 9, 2013, as US debt woes were offset by President Barack Obama's offer of a short-term deal to end the political gridlock in Washington.  AP PHOTO/KOJI SASAHARA

Asian shares were mostly higher Wednesday as US debt woes were offset by President Barack Obama’s offer of a short-term deal to end the political gridlock in Washington.

Posted: October 9th, 2013 in Latest Business Stories | Read More »

Six years for Greek economy to return to pre-crisis levels – PM

Striking teachers protest against job cuts in central Athens on Monday, Sept. 16, 2013. AP

The Greek economy is “back on track” but is likely to need another six years to return to pre-crisis levels, Prime Minister Antonis Samaras said Monday.

Posted: September 17th, 2013 in Latest Business Stories | Read More »

ECB could be done helping eurozone economy

By
In this July 31, 2012 file photo the euro sculpture stands in front of the headquarters of the European Central Bank, ECB, in Frankfurt, Germany. The ECB announced Thursday, Nov. 8, 2012, that it has left its key interest rate unchanged at 0.75 percent despite sagging growth in the 17 countries that use the euro. The bank has already said that it has done enough and it's up to governments to restore growth by cutting regulation and fixing their finances. AP/Michael Probst

FRANKFURT, Germany — The European Central Bank is unlikely to offer any further help for Europe’s sagging economy Thursday after already lowering interest rates to record lows and calming the region’s debt crisis with its plan to buy the bonds of heavily indebted governments.

After a year that has seen €1 trillion ($1.3 trillion) in emergency loans to banks, a rate cut, and President Mario Draghi’s vow to “do whatever it takes” to rescue the euro, some analysts say the ECB may consider itself finished with efforts to rescue the economy of the 17 European Union countries that use the euro.

Analysts say the bank will hold off cutting its key refinancing rate any further from its current 0.75 percent when the bank’s 22-member governing council gathers at its headquarters in Frankfurt. The council sets monetary policy for the eurozone and its 333 million people.

It is also unlikely that the ECB will offer any major new emergency measures, after Draghi made the risky but crucial step in September of saying the bank could buy unlimited amounts of government bonds and lower borrowing costs for those governments, such as Spain and Italy, that are struggling to finance their debts.

Eurozone financial markets have calmed since ECB made its offer, though it has yet to buy a single bond under it. The ECB would only do so if a country asks for the help and agrees to take steps to reduce its deficit. Even so, the bond offer and calmer markets have so far removed the threat of a government might be forced to default on its debts.

But it will take more than that to get the wider economy moving again.

The eurozone shrank 0.1 percent in the third quarter, and is likely to shrink again in the last three months of the year. Meanwhile, the ECB is expected to cut its forecast for next year from 0.5 percent to near zero, in line with the forecast for 0.1 percent growth from the EU’s executive commission.

Cutting rates can stimulate lagging growth by lowering borrowing costs, thereby making it easier for businesses to expand and consumers to spend. But bank officials have questioned how much good further cuts would do. Even with record low rates, businesses still aren’t borrowing much due to the weak outlook. Eurozone retail sales slumped 1.2 percent in October, far more than expected.

Low rates and an infusion of around €1 trillion in low-cost loans to banks last December and February are only now showing faint signs of trickling through to the wider economy.

The slack economy, along with lower oil prices, has helped lower inflation to 2.2 percent, closer to the bank’s goal of just under 2 percent. Yet even that won’t be enough to trigger a cut with rates this low.

Recent statements by Draghi and other council members indicate “that the ECB perceives its job, both on conventional and unconventional policy, as just about done,” said Marco Valli, chief eurozone economist at Unicredit. He sees no rate cut “for the foreseeable future.”

Christian Schulz, senior economist at Berenberg Bank, says that as long as the economy shows even a mild recovery by next spring, “the ECB will not cut interest rates further” and could even be the first major Western central bank to start raising them in late 2013.

Not everyone agrees. Analysts at Nomura and IHS Global Insight see a chance for a cut in the first part of next year and don’t completely rule out a surprise move Thursday. Howard Archer at IHS says low inflation and slack growth mean that the ECB “has ample justification and scope to take interest rates from 0.75 to 0.50 percent sooner rather than later.”

The ECB stance contrasts with that of the U.S. Federal Reserve, which is adding support for the US economy by carrying out open-ended purchases of government bonds until unemployment falls. The purchases keep longer-term interest rates down. The U.S. economy is growing, unlike Europe, but could face trouble from the so-called “fiscal cliff” — automatic spending cuts and tax increase that would result if Congress and President Obama fail to make a budget deal. The Fed next meets Dec. 11-12.

Posted: December 6th, 2012 in Latest Business Stories,Photos & Videos | Read More »

Debt crisis to overshadow Asia-Europe summit

Participants of the ASEM (The Asia–Europe Meeting) Sustainable Development Dialogue listen to an opening speech, presented by Hungarian Foreign Ministers Janos Martonyi in the ministry of Foreign Affairs in Budapest on June 21, 2012 during the official opening session. The first sustainable development conference on the role of water in sustainable regional development strategies is a co-operative and comprehensive interaction among the regions of Danube River and Mekong River. AFP

Debt-laden European nations will lobby Asia’s economic dynamos for help to calm the crisis raging in the eurozone at a major summit next week in communist Laos, one of the world’s poorest countries.

Posted: November 2nd, 2012 in Latest Business Stories | Read More »

A long and winding road to Europe’s recovery

By

The seemingly endless deluge of mostly dreary economic figures such as growing unemployment and weak manufacturing output from across Europe reinforced the view that the road to the region’s recovery remains long and winding.

Posted: August 13th, 2012 in Headlines | Read More »

Advertisement

News

  • 3 caught with P7M shabu aboard truck stopped at Cotabato City checkpoint
  • SC fines retired judge for ‘undue delay in rendering decisions’
  • Monica Lewinsky says she was cyberbullying’s Patient Zero
  • Work at QC justice hall suspended as militants demand release of political prisoners
  • Total confirms death of CEO Christophe de Margerie
  • Sports

  • Pacquiao scores; Donaire absorbs KO
  • Mismatch of the year
  • Ruthless Lions ambush Chiefs
  • Cobras bag Cesafi cage title
  • Donaire undone by uppercut in 3rd
  • Lifestyle

  • Secure your child’s college education the easy way
  • Fashion designer Oscar de la Renta dies at 82–US media
  • A ‘bromance’ to last a lifetime
  • Hospitalized children illustrate Christmas boxes for wine lovers, health buffs
  • The problem with horror movies
  • Entertainment

  • UK critics praise Gia, other Filipinos
  • Being No. 1 is magic
  • Lav Diaz’s ‘Yolanda’ docu in Denmark
  • In the key of Mr. C
  • Spotlight on Aia de Leon
  • Business

  • US stocks gain despite weak IBM earnings
  • Rising household debt poses risks to growth of SE Asian economies
  • Capital requirements on banks raised
  • PH economic growth in 2014 expected to fall short of target
  • Neda chief seeks increased support for small farmers
  • Technology

  • Facebook sues lawyers over ‘scam’ lawsuit
  • NTC gets 60-day TRO vs enforcing text refund
  • Japanese jailed for making guns with 3D printer
  • Top 8 enterprise network infrastructure, security trends for 2015
  • Comet Siding Spring coming for 1st rousing visit in a million years
  • Opinion

  • In his hands
  • CSW, coordination and coherence
  • Her name is Jennifer
  • Living (and dying) with Ebola
  • Recapture ignorance!
  • Global Nation

  • Official visits US trade union’s rehab projects in Leyte
  • Chicago lecture on US colonialist hailed as ‘most relevant’ history month event
  • Ethnic voters soon to be majority in California
  • PH envoy: Ties with US stronger 70 years after MacArthur’s landing
  • Clueless AFP colonel explains Laude murder
  • Marketplace
    Advertisement