After yet another round of inconclusive bailout talks in Athens, Prime Minister Alexis Tsipras said he believed a comprehensive deal with creditors could be reached by April while taking a dig at the International Monetary Fund over its tough stance on labor rights.
In comments to reporters at the end of a summit of European Union leaders in Brussels, Tsipras said he believed a technical-level agreement could still be reached in time for a March 20 Eurogroup, with a broader accord, including the specification of medium-term debt relief measures, coming in April.
Tsipras indicated, however, that tough talks on collective wage bargaining would be harder to conclude. “That issue can’t be solved at the technical level. There’s a disagreement,” he said, adding that the IMF must understand that Greece is a European country and that non-European labor models cannot be imposed on it.
In a related development, IMF chief Christine Lagarde said Tsipras asked the Fund “to stand by Greece” in its third bailout program.
“To commit to Greece, as the Greek prime minister has requested, in addition to reforms, the debt should be sustainable,” Lagarde told French newspaper Le Parisien in an interview.
Tata Steel is to shut its £15bn UK retirement fund at the end of this month, in a move that could help safeguard a future for Britain’s largest steelmaker.
The Indian steel giant said on Tuesday that following a consultation with its UK workforce, it would close the final salary scheme to further accrual, after it became a serious financial drag on its British operations.
Last month, thousands of Tata’s UK steelworkers voted in favour of the proposal, which forms part of a rescue plan to put the troubled business on a sounder footing.
In return, Tata has pledged to guarantee production at the giant Port Talbot plant in south Wales until 2021, keeping both its blast furnaces lit, as well as to invest £1bn into the business.
In surprising comments that may rekindle a verbal currency war between president Trump and Europe, German finance minister Wolfgang Schäuble told German newspaper Tagesspiegel that in his opinion the Euro is “too low” for Germany, echoing criticism from Trump’s trade advisor Peter Navarro, who last week told the FT that Germany was exploiting its US and EU partners by using a “grossly undervalued” euro to create a vast trade surplus. The comment placed Germany, alongside China and Japan, in a category of countries that the Trump administration has accused of currency manipulation for competitive advantage.
As the FT reports on Sunday morning, Schauble acknowledged that the ECB had to set monetary policy for the eurozone as a whole, but said: “It is too loose for Germany.” A recent chart from Morgan Stanley confirms that on a PPP basis, the EUR is over 40% undervalued for exporting and current surplus powerhouse Germany on a standalone basis, however for many of Europe’s peripheral countries it still remains expensive.
What was more curious about Schauble statement is that the German finance minister blamed the European Central Bank for the low exchange rate.
The eurozone’s annual inflation rate climbed above the 1 per cent mark for the first time since 2013 in December, underscoring the impact of climbing energy costs on consumer prices which have lagged at worryingly low levels for the last three years.
At 1.1 per cent, year-on-year inflation in December was confirmed in a second reading from Eurostat, which also showed an uptick in core inflation to 0.9 per cent.
But the inflationary performance across the 19-country bloc remains mixed – a development that could pose a headache for the European Central Bank, which targets average price growth of just below 2 per cent.
Germany, Europe’s largest economy, recorded a more than three-year high of 1.7 per cent last month while Italy remained more sluggish at 0.5 per cent.
1) PM May views the Brexit vote as a vote to restore parliamentary democracy and for Britain to become even more internationalist. “It was the moment we chose to build a truly global Britain”.
2) The first aim of the Brexit strategy is to provide certainty where we can.
3) The final Brexit deal will be put to a vote in both Houses of Parliament.
4) The government will ensure control of immigration to Britain after Brexit.
5) The government will pursue a bold and ambitious free trade agreement with the EU.
6) It can’t mean retaining membership of the single market.
7) The government will seek the greatest possible access to the EU which may take in some elements of the single market.
8) The UK will not be required to contribute “huge” sums to the EU budget, but we should make an appropriate contribution.
9) The UK must be free to strike trade deals with countries outside the EU.
10) The government does not want Britain to be part of the common commercial policy, but they do want to have a customs agreement with the EU. It could mean a customs agreement with the EU has to be new or for Britain to be signatory to the agreement.
11) The government wants Britain to be free to establish its own tariff schedules at the WTO, and remove as many tariff barriers to trade as possible.
12) The government will seek to avoid a disruptive Brexit cliff face adjustment and believes a transition will be in the interests of both Britain and the EU.
Stocks dipped Thursday but finished off early, sharp lows, giving back gains from the day before.
The Nasdaq composite, off 0.3%, snapped a seven-day winning streak and posted its first loss of 2017.
Losing as much as 180 points earlier, the Dow settled for a 63-point loss, 0.3% lower, to 19,891 even. The S&P 500 slipped 0.2%.
Financial, industrial and technology stocks were down the most, while phone company and real estate stocks edged higher. Investors were turning their focus to the next wave of corporate earnings reports in the weeks ahead.
Banks and other financial companies were down as the yield on the 10-year Treasury note fell. Lower yields mean lower interest rates on loans and lower profits for banks. The yield on the 10-year Treasury slipped to 2.35% from 2.37% late Wednesday.
Benchmark crude oil finished up 76 cents, or 1.5%, to $53.01 a barrel in New York.
In Europe, Germany’s DAX ended down 1.1%, while France’s CAC 40 lost 0.5% despite new data showing eurozone industrial production jumped 1.5% in November. Britain’s FTSE 100 ended flat. In Asia, Japan’s benchmark Nikkei 225 dropped 1.2%. Hong Kong’s Hang Seng dipped 0.5%, while Australia’s S&P/ASX 200 slipped 0.1%. South Korea’s Kospi bucked the trend to rise 0.6%.
As 2016 draws to a close, a sense of unease is gripping many commentators as they look ahead. This year brought victories for Brexit and Donald Trump. The outcome of both votes were largely unexpected. What will 2017 bring? The EU is facing three, or even four, elections in major member states. The Netherlands, France, Germany and possibly also Italy will go to the polls. The outcome in all four elections is far from certain at this stage. Indeed, voting behavior seems to have become difficult to predict.
Economic and sociological research points to a number of different factors provoking these recent results. The debate is broadly about whether it is economic issues such as income inequality, cultural issues such as a rejection of equal rights for women, minorities and gay people, or factors relating to citizens’ perceived loss of control over their destiny that has driven people to support populist candidates and causes.
At first sight, the economic factors seem to have played a strong role. The vote for Brexit predominantly came from the countryside, where GDP per capita levels are significantly lower than in the cities. Moreover, income inequality levels are much higher in the United States and the U.K. than in continental Europe. And indeed, one can show that the Brexit vote is significantly affected by regional income inequality though the effect may not be very large.
The second explanation is a rejection of progressive cultural norms. An interesting study by Ingelhart and Norris emphasizes very much this aspect. They offer evidence that the recent protest votes are a cultural backlash against progressive values. And indeed, discourse especially on social media has totally changed. Unfortunately, it seems to have become widely acceptable to talk of white supremacy and engage in racist discourse.
Eurozone finance ministers struck a deal in Brussels on Monday on short-term measures to lighten Greece’s debt burden, but the conclusion of the country’s second review of its third bailout and the participation of the International Monetary Fund have been deferred to January.
“The Eurogroup endorsed today the full set of short-term measures, including extending the repayment period and an adjustment to interest rates,” the Eurogroup said a statement.
The decision was seen to reward Greece for implementing the latest batch of reforms demanded as part of its bailout program.
The head of the European Stability Mechanism, Klaus Regling, said after the meeting that the short-term measures will start being implemented “in the next weeks.”
The measures, however, did not meet the demands of the IMF, which has demanded substantial debt relief and harsher austerity procedures in order to join the Greek program.
Despite some rumors and speculation that Merkel may call it a day after being the most important woman in Europe for over a decade, having served as chancellor of Europe’s biggest economy for 11 years, on Sunday Merkel told leading members of her conservative Christian Democrats (CDU) that she wants to run for a fourth term as chancellor in next year’s election, senior party sources told Reuters and German DPA agency.
An unexpected decline in Germany’s powerhouse industrial sector dragged industrial output in the eurozone back into decline in September, but the fall was not as severe as economists had expected.
Industrial output excluding construction declined by 0.8 per cent over the month, but was 1.2 per cent higher than the same month a year ago. Although lower than August, the decline was less severe than the 1 per cent fall predicted by economists.
Eurostat also revised upward August’s already strong figures, from 1.6 per cent monthly growth to 1.8 per cent.
The Eurostat data follow disappointing figures from the French and German statistics offices last week, which both showed unexpectedly severe declines in industrial output.
Germany’s decline was one of the largest in the entire eurozone, alongside Denmark and Greece. Sweden, Ireland and Estonia were the best performers.
September’s fall was caused by a 5.6 per cent decline in production of durable consumer goods, whereas production of non-durable consumer goods rose by 0.3 per cent.