Financial Communique » EU

EU could ease the capital requirements for the banks

Viliyana Filipova — Mon, 06 Feb 2012 21:18:55 +0000

The European banking regulator may consider easing its capital requirements for banks. Later this week in London, the European banking regulator (EBA) will hold a meeting that will review in December announced new capital requirements. The requesting anonymity because of confidentiality of the talks, the meeting will be reviewed in the new higher capital buffers that banks must have on their bond holdings of certain eurozone countries. As part of measures to tackle the debt crisis, EBA asked European banks by the end of June to raise 114.7 billion additional capital. The regulator wants banks to increase their capital adequacy ratio to 9%, and to accumulate additional capital buffers, according to market value of bonds having difficulties in the euro area they have.
“To calculate the need for additional capital based on returns so volatile it was the right decision”, said Nicolas Veron, strategist at Bruegel, a Brussels-based economic research agency. “This decision is the result of political negotiations, so it is not right to blame the EBA”. Any decision to change the government buffers will be considered only after consulting the European Systemic Risk Board (ESRB) – organization of central bankers in Europe, indicate the sources compiled by Bloomberg. “The need for these buffers and their size will be reviewed, where measures to tackle the debt crisis have an impact on bond markets”, said Andrea Henri in January, President of the EBA.

S&P may decrease the credit ration of EU

Viliyana Filipova — Thu, 08 Dec 2011 11:42:43 +0000

The international rating agency Standard & Poor’s the list for review with the possibility of lowering long-term credit rating of the European Union, which is currently the maximum level of AAA, said in a statement on the official website of the agency. Meanwhile Standard & Poor `s confirmed the EU short-term rating at A-1. The agency’s decision was taken after 2 days it has submitted the list to review the long-term ratings with the ability to lower 15 Member States of the Eurozone and 3 days after being published forecast for the region’s economy likely to enter recession in early first quarter of 2012.
“Bringing in the list for revision reflects our concerns about the possible influence of ability in the future Member States of the Eurozone to service its debt”, the agency noted, recalling that 62% of revenue in the EU budget come from the Eurozone countries. Also tonight Standard & Poor `s bring in the list for review for possible downgrade of some of Europe’s largest banks.
Among them are the German Deutsche Bank and Commerzbank, French Societe Generale, BNP Paribas, Natixis and Credit Agricole, the Dutch Rabobank, Italian Intesa Sanpaolo and Unicredit, stated in another message to the agency.
We intend to pull out their ratings on the list for review once the review of long-term national ratings, the document says. There are also points out that ratings of Austria, Belgium, Finland, Germany and the Netherlands can be lowered by one grade, while those of France, Estonia, Ireland, Italy, Malta, Portugal, Slovakia, Slovenia and Spain – with two degrees . Bringing in the list for review for possible reduction means that the corresponding rating a 50% probability to be reduced over the next 90 days.

Portugal, IMF and EU agreed on 78 billion EUR rescue loan

Viliyana Filipova — Thu, 05 May 2011 14:32:19 +0000

Portugal finally reached an agreement with the European Union and International Monetary Fund (IMF) rescue package of 78 billion euros, confirmed the three negotiating parties said on Tuesday. The program lays the foundations for strengthening of the Portuguese economy, said the Head of Mission of the European Commission Jurgen Kroger. The EU will participate in a package of 52 billion euros, and the IMF – with 26 billion euros. The conditions of bail include loan acceleration and deepening of the ongoing privatization program, and significant structural reforms, said Finance Minister Teixeira dos Santos Fenrnandu. The agreed financial assistance program is tough, but necessary and fair, “said Kroger, said. Portugal is going to recession two years, the plan provides support for a contraction of about 2 percent in 2011 and 2012, before the boom in 2013, predicted Fenrnandu Teixeira dos Santos. The economic recovery after two years will be based on exports, “he told reporters. In 2010 Portugal reported growth of 1.4 percent after a year of recession in 2009 due to financial crisis. The unemployment is expected to increase to 13 percent in 2013, and in the coming years to begin to decline, said the Minister. Dos Santos presented this morning program for financial assistance to Portugal for three years worth 78 billion euros. This amount will allow you to cover the funding needs of the country that have been carefully studied before to reach agreement on that amount, said Finance Minister.
In Brussels, the European Commissioner for Economic and Monetary Affairs Commissioner Olli Rehn and IMF Managing Director Dominique Strauss-Kahn issued a joint communique, which stated that financial assistance to Portugal will require a “genuine national effort.”
“The Portuguese economy is facing challenges,” they noted, highlighting its strong support in the authorities’ efforts to protect the most vulnerable.

Romania joined to the Pact for the EUR

Viliyana Filipova — Sun, 27 Mar 2011 13:59:50 +0000

Romania is not a member of the Euro zone, but joined the pact for the euro. The country is seeking to avoid new debt crisis, but will retain its tax policy. The six countries outside the euro area, including Romania, joined the “Pact for the euro,” said Basescu in Brussels. Harmonization on taxes, encouraged by the present Covenant does not mean that we should all have the same level of taxes, he said. Romania will never join if its right to maintain the single rate of taxation has been called into question, said the president. Bucharest adopted in 2005 tax reform, based on introduction of a tax / flat tax of 16 percent on profits of companies and income of individuals, which is considered a trump card in the country’s efforts to attract foreign investment. Basescu explained that the purpose of the pact – to stimulate competitiveness and employment, are included among the priorities of Romania. This pact confirmed the correctness of the measures taken by the government assured the Romanian president, given the savings plan, adopted in mid-2010 to reduce the budget deficit. The pact for the euro, encouraging economic reform, debt reduction and coordination of tax policies, was passed in the night of Friday the summit of the EU in Brussels.

EC offers up border for direct payments

Viliyana Filipova — Fri, 19 Nov 2010 07:56:06 +0000

It is possible that reform of the Common Agricultural Policy (CAP) of the European Union to set an upper limit on direct payments to agriculture. This was announced by European Commissioner for Agriculture Dacian Ciolos that presented in Brussels a common vision for the sector. Commissioner’s statement was broadcast live in the EU Information Centre in Sofia. CAP bloc traditionally allocates almost half of its budget. The current GSP ends at the end of 2013 with the expiration of the budget period of the EU. Currently, farmers in old member states receive higher subsidies from the accession states. “European Commission believes that the CAP must maintain its leading role, but it should be clear what is the added value resulting from its operation,” said Dacian Ciolos. Surely the new budget period 2014-2020 subsidies for agriculture will be reformed, it was clear from his statement. We need to ensure that aid will go to active farmers who actually need them. Even small farmers should be encouraged so as to be more market oriented, said Ciolos. The reform will be looking for equality and balance not only between old and new member states but also between regions within a country, said EU. Ciolos however stressed that the goal of reform is transparency and evolution, not revolution.
In response to a journalist’s question he said that the Baltic states which joined the EU in 2004, and receive less money from the old members will receive higher direct payments. They will be comparable to the average level of funding in European countries. Bulgaria and Romania are in a similar situation as last joined, but particularly the two countries Commissioner did not comment on anything. The ideas to change the CAP are yet to be discussed. Commission will present a formal legislative proposals in mid-2011

EU: China should open the market for public orders

Viliyana Filipova — Thu, 22 Jul 2010 15:08:19 +0000

The Labour Commissioner Karel De Guh said that China should improve investment opportunities for foreign companies in the country, said “serious questions” that puts European business practices in connection with the Chinese procurement market, says the Wall Street Journal. During his visit to the Shanghai World Exposition (World Expo) Guh stressed that China should ensure transparency and openness of its market procurement and noted that all the rules that distort competition, hampering economic growth. In response to remarks by European Commissioner, Chinese Vice Minister of Commerce Gao Huchan said that the policy of the Chinese government is strongly opposed to protectionism. Guh said that Chinese investment in Europe remain relatively low until the GAO sees possibilities for cooperation between Europe and China in high technology and green energy. Between 2004 and 2008, European imports from China grew by an average of 16.5 percent per year, although because of the global financial crisis experienced a drop of 13% in 2009.
China remains the largest importer in Europe Last year in the European Union (EU) imported Chinese goods for 215 billion.

Beginning of the Belgian Presidency of EU

Viliyana Filipova — Thu, 01 Jul 2010 23:32:30 +0000

Shaken by successive government crisis and more than ever divided between Flemish and Francophone Belgium took today, July 1, the Presidency of the European Union. Relay is taken from Spain by the Belgian Community leadership will continue until the end of the year. The 12th Belgian presidency comes at a critical moment in which unsolved problems and unfinished tasks are immensely, said yesterday. Among them stand the completion of the reform of regulations in the banking and financial sector, earning a European diplomatic service, strengthening European economic governance. The new Belgian government would intervene in power before October and the new ruling will not have much time to adapt. The previous government withdrew in late April when Prime Minister Yves Lyoterm resign after the Flemish liberal party Open VLD withdraw its support for the cabinet.
Czech scenario?
There is concern not to repeat the Czech scenario in which the EU has witnessed in the first half of last year. Then the Czech government fell from power – in the middle of the commitment of the Community presidency, leading to total loss of influence of Prague on European affairs. “Of course, Belgium is a European belief, but a country whose future is uncertain, not enjoy the great political trust,” said the agency Christian Frank, a professor at the Institute for European Studies at the Catholic University of Louvain.
Role of the pilot
Belgians emphasize consensus going into the realm of European Affairs, trying to reassure Europe. Emphasized also that the Lisbon Treaty is less weakened the influence of rotating presidency. The position of Belgium is that today the State President has rather a pilot role in European governance than the “captain of the flight. “First we will serve the European institutions”, said the country, adding that will seek to moderate positions. Further dilution of the role of the Belgian Presidency is expected to have European chairman Herman van Rompoy, which at the same time is also Belgian. That is, although it has weakened the importance of the institution itself, chairing the rotating, van Rompoy likely to have a function of facilitator in the event of contradictions.

France beat Germany with decreasing of the deficit

Viliyana Filipova — Sat, 26 Jun 2010 09:58:23 +0000

The French Government announced on Friday a new tax increase amounted to 3.5 billion in 2011, reported Financial Times. The total increase in tax revenue next year will reach 13.2 billion, ahead of Germany’s program to reduce the budget deficit amounting to 11 billion euros in 2011. Revenue from the increase, however, retreated to the increase in VAT by 2,5 percentage points in Britain next year, which is expected to bring 12.1 billion pounds (14.7 billion). The series of tax increases to reduce budget deficit expected for this year’s 8 percent of GDP to 6% in 2011 as promised to the European Union (EU). The plans are based on forecast economic growth of 2.5 percent next year, the International Monetary Fund (IMF), the EU and many economists are optimistic about. The last tax increase should reassure the financial markets, but not cause panic in society. Earlier in the month the French government announced increased taxes on business and the rich worth 3.7 billion euros to help fill the deficit in the pension system. Paris still hopes to collect 1 billion in 2011 from the new bank tax.
The government also plans to freeze public spending, with the exception of those on pensions and interest payments, one option is to freeze public sector wages.

EU will resque Greece in extreme cases

Viliyana Filipova — Sun, 31 Jan 2010 16:54:48 +0000

The European Union has made clear that Greece will not abandon and leave the growing crisis with the country’s obligations to endanger the eurozone, writes Financial Times. “It is clear that economic policies are not only a national issue, but also Europe, told reporters in Brussels, European Commission President Jose Manuel Barroso. According to senior EU officials in Greece last resort may receive emergency assistance from the governments of the euro area and by the EC, but without the participation of the International Monetary Fund. Euro zone countries and European authorities did not specify how Greece would help, since they fear that it will reduce pressure on Greece to cope alone with their problems and that would confuse an already turbulent financial markets. Immediate priority for the country to show that it is serious in its intention to reduce public spending, improve tax collection, to publish reliable financial and statistical data to deal with corruption, EU representatives stressed.
The Greek Prime Minister George Papandreou accused the “malicious forces” in putting the rumors that Athens sought funding in China and elsewhere. He stressed that Greece has demonstrated its ability to raise funds through bond issue for 8 billion, released Monday, which was strongly labeled.

No hopes for soon agreement on emissions

Viliyana Filipova — Mon, 07 Dec 2009 14:58:25 +0000

The European Union today rejected new emissions targets proposed by the United States and China, on the ground that are too low to prevent catastrophic climate change, forward Journal Times. The dispute between the three main forces of the summit on climate change in Copenhagen darkened first day of negotiations and shattered hopes that will soon be reached on emissions. The EU has called U.S. President Barack Obama to announce higher goals next week when he will come to Copenhagen for the last day of the conference – 18th December. Representatives of the United States, however, insist that the proposed emission occurs before 10 days after Barack Obama was “remarkable” and in line with the recommendations of scientists. Obama suggested the United States emissions to be reduced by 4 percent compared to 1990 levels until 2020 did the EU have committed to cut emissions by 20 percent over the same period. Moreover, the EU is committed to the reduction to 30 percent if other countries are ready to take “such action”.
Andreas Karlgren, Minister of Environment of Sweden and the EU’s chief negotiator, said that proposed by the United States and China targets are too low can be defined as “similar acts”, so the EU would not confirm its goals.