Posts Tagged ‘ eu ’

US-EU trade talks set to open amid tensions

US-EU trade talks set to open amid tensions.

Tensions over spying and protected industries will be the backdrop of talks aimed at creating the world’s largest free trade zone between the European Union and the US.

The US has caused friction with its allies due to the snooping carried out by the National Security Agency.

The US and the EU officially agreed to open talks at the Group of Eight conference last month. Their aim is to remove trade and investment barriers between the two sides.

There are already comparatively few direct tariffs on goods and services, but there are other obstacles to remove such as regulatory and safety standards, inspection procedures, and preferences for domestic business.

If these hurdles are eliminated, the costs for companies doing transatlantic business could be significantly reduced.

European negotiators will be pushing for US states, cities and federal departments to abandon preferences for American contractors, while Washington will be looking for the EU to open up its market to US biotechnology firms wanting to sell products like genetically-modified foods, something which remains controversial in Europe.

Head of the European Commission Jose Manuel Barroso said that the negotiations would not always be easy but they would be worth it.

Last year, trade in goods between the United States and the EU was worth some €500bn euros, with another €280bn euros in services and trillions in investment flows.

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Could Italy be next for EU bailout ? Strike 2 in new credit crunch .

Italy’s former PM Silvio Berlusconi has been sentenced to seven years in jail and banned from public office for having sex with an underage prostitute.This was the main headline out of Italy but there was also another that didn’t get much attention .Mediobanca, Italy’s second largest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs,less supply demand high = HIGH price )

The Italian macro situation has not improved over the last quarter, it has actually gotten worst . With a new anti austerity government , looks to get even worst .

Italy has €2.1 trillion (£1.8 trillion) debt is the world’s third largest after the US and Japan.but is only the world 8th largest economy .

Rank Country/Region GDP (Millions of $US)
1 United States 14,991,300
2 China 7,203,784
3 Japan 5,870,357
4 Germany 3,604,061
5 France 2,775,518
6 Brazil 2,476,651
7 United Kingdom. 2,429,184
8 Italy 2,195,937
Source -Wiki

Any serious stress in its debt markets threatens to reignite the eurozone crisis. This may already have begun after the US Federal Reserve signalled last week that it will begin to withdraw QE and the ECB Mario Draghi has also been pulling liquidity . The cracks has started with Sibor in China last week , could this be the start for round 2 of the global crisis ?

Mediobanca is particularly concerned about the gap that between yields on short-term bills (BOTs) and longer-term bonds (BTPs) near maturity that expire at the same time. BOTs retiring on July 31 are trading at a yield of 0.48, while the equivalent BTP is trading at 0.74pc. The reason is that BOTs are protected from debt restructuring.

Italian 10-year yields spiked to 4.8% .

The key number before was 6/7% that meant a country needed a bailout . Looking at the situation 5% / 5.25% is looking more realistic .

Could it be time to call ” Super Mario “ back again to sort it out . We could but the problem is in a democracy is voters vote with their heart and not there head which is totally understandable people need to live today as tomorrow is just a promise .

Lets see but I am calling this strike 2 , first one was China credit problem my blog on it :

1.Is the Chinese bubble bursting ?! Perfect storm ahead

Cash is king ,

Regards

Tony Evans
Tokyo

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France today resembles UK in 70s – sick monsieur of Europe?

I was reading the below and it amazes me that people are shocked that theres no growth and spiralling debt in France! Not really, basic economics tax more and spend more wont work!

You have a government that’s anti capitalism and determined to tax to successful and make a unfriendly business environment . Increasing tax to a whopping 75% was a shrewd move, well it was for everyone ells as they just moved to London or Brussels. What President Hollande has forgot is we live in a Information Age were people can do business from anywhere and inside the EU you can move freely !

I watched a documentary about the late Baroness Thatcher and can see the similar similar situation as the UK in late 70s and France today . Unions very strong, government subsidising unprofitable industry and an overtaxed system.

The current French government could take a lesson from Thatcher and here ethos I leave you with a quote by Thatcher

“The problem with socialism is that you eventually run out of other people’s money.”

Tony Evans

Tokyo

EU: France must do more
The French government was put under increasing pressure today after Brussels said it must do more to help the countries sputtering economy.

Today’s report warned that France’s shrinking share of global exports and diminishing growth prospects are likely to continue unless more is done to make the country’s labour market more flexible.

Brussels fear that France’s increasing sovereign debt levels, expected to rise to 9.8%, are not only choking off growth prospects but are threatening the country’s banking system and the broader European economy.

“France’s public sector indebtedness represents a vulnerability, not only for the country itself, but also for the euro area as a whole,” the report states.

The annual reports issued today are part of new post-eurozone crisis powers given to the European Commission, to identify and pressure EU countries on where their economies are most vulnerable.

Similar warnings were also issued to Spain and Italy, but the stark evaluation of France’s economic difficulties stands out because Paris has not normally been lumped in with the region’s “peripheral” economies.

The French report is particularly blunt about the need for the president to act more decisively. Although the report praises the Hollande government for its recent efforts to lower the cost of labour and to “foster competitiveness”, it argues such measures are not adequate.

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