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Category Archives: Europe
A classic example of the Russian leader’s annual conference: just don’t mention the rouble or military involvement in Ukraine
John Crace’s review of the year: from sorry apology to solemn vow, 2014 was not a vintage year of political accomplishment
Politicians rarely find it easy to say sorry but, in April, culture secretary Maria Miller did manage to find a 32-second window in her diary to come to the House of Commons to mutter: “Yeah whatevs I dun nuthin wrong and though I’m sayin soz I don’t mean it cos what’s wrong with claimin to live in wun house and livin in anuva I mean everywunz at it innit?”
One of the shortest parliamentary apologies on record was the preface to one of the longest general election campaigns. The unforeseen consequence of the Fixed Term Parliament Act of 2011, which was introduced to ensure the coalition’s survival for five years, was that parliament had little to do in the government’s final year. Time and again, the then leader of the house, Andrew Lansley, was forced to explain why there wasn’t much government business going on; his nadir came when he had to find a reason, other than inactivity, why the Commons was being prorogued a week earlier than usual at Easter. “I am surprised at the honourable lady’s argument that we are not busy,” he said wearily, before the tumbleweed carried him away. “We are busy. When we return from recess, we have a busy two days.”
Inquest to re-examine deaths of ten people who were fired upon by the Parachute Regiment in west Belfast in August 1971 Continue reading…
Unilever, Procter & Gamble and Gillette are among those facing penalties for colluding on price rises between 2003 and 2006
Some of the world’s biggest consumer products companies, including Unilever, Reckitt Benckiser, Procter & Gamble and Gillette, have been fined a combined €951m (£748m) by the French competition watchdog for price fixing in supermarkets.
The regulator said the 13 companies, which also include Colgate-Palmolive, Henkel, L’Oréal, Beiersdorf and Johnson & Johnson’s Laboratoires Vendôme, had colluded on price increases between 2003 and 2006. “These two sanctions are among the most significant imposed to date by the competition authority,” it said. The regulator added that the price-fixing had kept prices “artificially high” affecting consumers and “caused harm to the economy”.
The latest business and finance news, as SNB takes fresh measures to weaken the franc following the Russian rouble crisis
Over in Greece, the political wheels are turning after MPs rejected the government’s nominee for the presidency last night, increasing the chance that the administration could collapse.
“I confirmed my view which is categoric: early elections, required in the case of parliament’s inability to elect a president of the republic, will lead the country into turmoil whose end result will be to find ourselves out of the Eurozone.”
“At this point, the widest possible consent is required. We all have to put the interests of the country above personal or party interest. We owe it to the Greek people from whom we have asked huge sacrifices.”
“He asked me to come to a solution of consent in the name of national policy. We believe that a national solution will be found only after elections.”
Imposing negative interest rates on commercial bank deposits could actually backfire on the Swiss economy and cause an asset bubble.
So warns Angelo Ranaldo, Professor of Finance and Systemic Risk at the University of St Gallen.
“By introducing negative interest rates, the Swiss National Bank is reacting to the European Central Bank’s recent decision and to the renewed pressure on its safe haven currency thanks to the Russian crisis.
But there is a fundamental disconnect between the Swiss economy and the outlook for the Eurozone: the Swiss economy is in better shape and disinflation is not a concern.
Analysts at Goldman Sachs reckon that the Swiss central bank could be forced to intervene in the foreign exchange markets again, once the impact of negative rates wears off:
Goldman saying that the SNB may still rely on FX interventions to protect the floor after shock rate cut earlier. EURCHF currently at 1.2041
Credit rating agency Fitch has warned that risks to Russia’s economy have intensified.
In a statement, Fitch sounded the alarm over the rouble’s extreme volatility this week, and the interest rate hike to 17%.
The inflationary impact of recent falls (inflation is heading towards double digits) will erode real incomes, further damaging private consumption and domestic demand.
If rates have to be kept high or increased to support the currency at a lower oil price, the impact could be greater still. The CBR has estimated that average oil prices of $60/barrel could cause GDP to shrink 4.5%-4.7% in 2015.
Fitch says $66 oil in 2015 would cut #Russia‘s GDP by 2.8%, and the CRB rate increase will make that worse. To review rating in January.
After a rocky start, Greek bonds are actually rising in value now, pushing down the interest rate (or yield) on the debt.
Greek Bonds actually doing okay this morning – the yield drops to 8.52 (-24bp) on the 10 year.
The feel-good factor from last night’s Federal Reserve meeting continues to push European stock markets higher.
Shares are rising on relief that the US central bank will be patient when deciding when to raise US interest rates.
Equities in Europe are trying hard to take advantage of a dovish, US Federal Reserve-led rally in the States last night. The S&P 500 had its best day of the year, rising a shade over 2% to close back above the 2000 level.
While the ‘considerable time’ statement remains in the minutes despite some reports to the contrary, the fact it changed its language slightly, and highlighted a ‘patient’ stance on when rates will start going up, maintained the dovish theme. The comments by chair, Janet Yellen, that this alteration in language did not actually mean a change in its outlook helped put a rocket under equities for the final part of last night’s session.
Greece’s jobless rate has dipped a little, but remains in at depression-era levels.
Elstat reports that the unemployment rate was 25.5% in the third quarter of 2014, down from 26.6% in April-June, and 27.2% a year earlier.
Swiss central bank chief Thomas Jordan also confirmed that the Russian crisis had prompted today’s decision to charge commercial banks who deposit their francs with the SNB.
Back to Switzerland….and the head of the Swiss National Bank has predicted that the negative interest rates announced today will remain “for the foreseeable future”.
SNB chairman Thomas Jordan told a press conference that further measures could be imposed if it’s necessary to weaken the franc and stimulate inflation again.
“If it becomes necessary, we can take further measures. Possible measures include a further reduction of interest rates or a reduction of the exemption threshold”.
Record growth in department stores and electrical appliance stores in November 2014. Boosted by ‘black Friday’
It seems #BlackFriday gave UK retail sales a massive boost. That’s it then. We’ll never be rid of it.
Britain appears to have caught the Black Friday bug.
New figures from the Office for National Statistics show that retail sales jumped by 1.5% month-on-month in November, the biggest rise this year.
“Black Friday’s shopping frenzy provided the sector with a timely boost and retailers will hope that this momentum is maintained throughout the festive period.
“A combination of aggressive discounting and consumer’s determination to secure big ticket bargains ensured that electrical goods and household appliances were the standout categories. Clothing and footwear retailers used the event to reduce stockpiles of winter clothing, albeit to the detriment of their profit margins.
Financial analyst are digesting Switzerland’s decision to impose negative interest rates on cash deposits at its central bank.
The SNB continued to show its unwavering support for the EURCHF floor by introducing negative interest rates….
We doubt the action will have long term effect and expect to see EURCHF grind back towards the EURCHF 1.2000 minimum exchange rate.”
“Having seen the franc trading at, or very close to, the cap that it set of 1.20 to the euro over the past month, the SNB obviously felt it needed to shore up its defences against a building storm surge of money looking for a safe home.
It is also faced with the potential for Q.E. by the ECB next year, which would likely put further downwards pressure on the euro across the board.
“The timing is suspicious because the fee will be charged starting on January 22nd.”
German firms appear to be shrugging off the Russian crisis, and Europe’s economic problems.
The IFO survey of German morale, just released, has risen to 105.5 up from 104.7 last month. That’s the highest reading since August.
Heads-up; Vladimir Putin’s press conference is about to start in Moscow. We’re running a separate liveblog, as it’s going to last for several hours:
Announcement on the tannoy at Putin press conference asks journalists not to bring toys and furry animals into the hall.
Over in Berlin, German chancellor Angela Merkel has warned that sanctions against Russia over Ukraine remain unavoidable as long as Moscow does not respect Ukrainian sovereignty.
“As long as we do not reach this goal … sanctions remain unavoidable, though I would like to reiterate that they were not and are not an end in themselves.”
The Russian rouble is volatile around this morning, as traders await Vladimir Putin’s annual press conference, from 9am.
It’s currently down 2.2% against the US dollar at 61.5 roubles/$1, having hit a low of 58/$1 in early trading.
Greek three-year bonds weakened this morning after MPs rejected the government’s presidential candidate last night, pushing up the yield on the debt.
European stock markets have risen in early trading, taking their lead from Wall Street’s rally last night.
The German DAX and French CAC both surged 1.7%, while the FTSE 100 is up a more modest 0.5% or 30 points at 6366.
Markets had been expecting such a move and, despite signs of some disagreement on the committee as three members dissented, the shift is a signal of confidence in the sustainability of the US recovery.
Fed Chair Yellen reassured that policy continued to depend upon the data, with no move likely within the next “couple of meetings”.
Because it wants to weaken its currency, the Swiss franc, by penalising banks who hold deposits.
The Swiss franc has weakened sharply after Switzerland’s central bank surprised the markets by announcing it would impose negative deposit rates of 0.25% on commercial bank deposits.
The franc fell by half a cent, to 1.2095 francs against the euro, a two month low.
The SNB reaffirms its commitment to the minimum exchange rate of CHF 1.20 per euro, and will continue to enforce it with the utmost determination. It remains the key instrument to avoid an undesirable tightening of monetary conditions resulting from a Swiss franc appreciation.
Over the past few days, a number of factors have prompted increased demand for safe investments. The introduction of negative interest rates makes it less attractive to hold Swiss franc investments, and thereby supports the minimum exchange rate.
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.
And #SNB introduces negative interest rates as the great monetary policy experiment continues …
Ethical questions raised over plans to redevelop unfinished Third Reich seaside complex into luxury holiday apartments Continue reading…
Extreme right accused of dishonest manipulation of environmental issues with the launch of eco-nationalist New Ecology movement
The launch of a ‘New Ecology’ movement by France’s National Front (FN) this week has been condemned by environmentalists as opportunistic, inconsistent and dishonest.
The far right eco-nationalist grouping was launched by Marine Le Pen, with a ‘patriotic’ platform of opposition to international climate talks and support for France’s nuclear industry.
There is a general sense that Europe could survive a breakup with Greece, if it came to that, with relatively minimal damage, thanks to an array of recent regulatory changes and a renewed commitment among leaders.