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Euro Watch: European Commission Offers Grim Forecast for Economy

February 22, 2013 by Leave a Comment

BRUSSELS — A top E.U. official warned Friday that the economy of the euro area would shrink for the second year in a row and that countries like France and Spain would miss fiscal targets meant to ensure the stability of the common currency.

Olli Rehn, the European commissioner for economic and monetary affairs, forecast growth across the 27-nation European Union of just 0.1 percent this year and a contraction of 0.3 percent among the 17 countries in the euro zone.

Mr. Rehn’s presentation signaled “another year of falling output and rising unemployment in store in 2013,” said Tom Rogers, a senior economic adviser at Ernst Young.

Prospects for growth in many parts of the Union were “very disappointing,” Mr. Rehn acknowledged at a news conference, where he presented a so-called winter economic forecast prepared by his department at the European Commission, the Union’s administrative arm.

“The ongoing rebalancing of the European economy is continuing to weigh on growth in the short term,” Mr. Rehn said.

Just three months ago, the commission forecast that the euro area economy would grow by 0.1 percent this year.

Mr. Rehn said the European economy should resume expanding in 2014, with growth reaching 1.6 percent across the Union and 1.4 percent in the euro area.

But the downbeat forecast, coming a day after data showed that a slump in business activity in the euro area worsened unexpectedly this month, added to perceptions that Europe continues to struggle to stimulate growth while cutting spending to pare deficits.

The commission also forecast that unemployment would continue to rise in the euro area this year, to 12.2 percent, up from 11.4 percent in 2012.

In Spain, the commission said it expected joblessness to hit 26.9 percent, up from 25 percent last year. In Greece, the forecast was for unemployment to leap to 27 percent from 24.7 percent a year earlier.

Even in buoyant Germany, which is expected to grow this year by 0.5 percent, unemployment was seen nudging up slightly this year to 5.7 percent from 5.5 percent in 2012.

The litany of grim figures will add fuel to a furious debate over whether an insistence on austerity is creating a self-perpetuating cycle where cuts to state spending to meet E.U. targets diminish demand, weakening tax revenue and further straining government finances.

Yet blaming the effects of belt-tightening for Europe’s continued economic woes, particularly in the case of Spain, is too simplistic, said Guntram B. Wolff, the deputy director of Bruegel, a research organization.

“Perhaps the real reason for the deterioration in the economic situation in Europe was the massive drop in confidence of international investors in the ability of the euro area to overcome its more systemic problems,” Mr. Wolff wrote in a blog posting shortly after Mr. Rehn’s news conference.

The commission said Spain’s deficit was expected to fall to 6.7 percent of gross domestic product this year, down from 10.2 percent in 2012, partly because of tax increases and a sharp reduction in year-end bonuses for public-sector workers. But that still fell wide of the official target of 4.5 percent, and the commission warned that Spain’s deficit could rise to 7.2 percent in 2014.

In the case of France, the commission attributed economic stagnation to declining household spending linked to rising unemployment — which the report said was expected to reach 10.7 percent in 2013, then climb to 11 percent in 2014, up from an estimated 10.3 percent in 2012. In addition, the report cited a drop in confidence among French entrepreneurs.

The report forecast that the French budget deficit for 2013 would be 3.7 percent of G.D.P., down from an estimated 4.6 percent in 2012, but well above the government’s official target of 3 percent. The commission also warned that the deficit could rise to 3.9 percent in 2014.

In a sign of flexibility, Mr. Rehn said deadlines for meeting budgetary targets could be extended in the cases of France and Spain, assuming their governments could demonstrate progress in implementing fiscal reforms despite the unexpectedly tough economic environment.

Article source: http://www.nytimes.com/2013/02/23/business/global/daily-euro-zone-watch.html?partner=rss&emc=rss

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Snapchat, a Growing App, Lets You See It, Then You Don’t

February 8, 2013 by Leave a Comment

More than 60 million photos or messages are sent each day through an app called Snapchat and then, after they are viewed for a few seconds, the missives vanish. That disappearing act — and a volume that is over a tenth of the well-established Facebook’s — has made the tiny start-up a technology hit, amassing millions of users and the backing of some of the most respected names in Silicon Valley, even though it doesn’t make any money.

Because images sent through the application self-destruct seconds after they are opened, Snapchat is being embraced as an antidote to a world where nearly every feeling, celebration and life moment is captured to be shared, logged, liked, commented on, stored, searched and sold. For people who don’t want to worry about unflattering pictures or embarrassing status updates coming back to haunt them, the app’s appeal seems obvious. 

Many young people are growing tired of the polished profiles and the advertising come-ons of Facebook, recent surveys have shown. Moreover, young Facebook users are becoming acutely aware of the permanence of the content shared through the Web — and its repercussions later in life. As perceptions of social media change, other start-ups, including Wickr and Vidburn and Facebook’s own Poke, have recently released messaging and video products that self-destruct after a set period of time.

“It became clear how awful social media is,” said one of Snapchat’s founders, Evan Spiegel, 22. “There is real value in sharing moments that don’t live forever.”

The Snapchat service, which started two years ago but has steadily gained users, has been painted as a popular way for people, especially teenagers, to send naughty pictures. But Mr. Spiegel and his co-founder, Bobby Murphy, 24, say Snapchat is gaining traction for more than R-rated exchanges. Mr. Murphy describes the service “a digital version of passing notes in class.”

“You can’t build a business off sexting,” said Mr. Spiegel, using the term for sending racy pictures via text message chats. “It’s such a specific-use case. This is about much more than that.”

Sean Haufler, 21, a computer science major at Yale who uses Snapchat, said he thought it was “dumb” when his younger sister, a high school student, first told him about it. But he began to realize that it was a much more intimate way to communicate with friends. The emotional weight of the content is heavier, he said, because messages are direct and personal. Plus, he said, “the time limits make people more comfortable.”

“People are very self-aware when it comes to their Facebook profiles,” he said. “All the content is very manicured and curated, the best possible portrait of yourself.”

Facebook has certainly taken notice of the desire for impermanence, especially as Snapchat, according to Nielsen statistics, attracted 3.4 million users in December, more than twice as many as the month before. Mark Zuckerberg, the Facebook chief executive, met with the company in December, according to Snapchat’s founders. Shortly after, Facebook started a similar product called Poke.

It was, if nothing else, an endorsement of the idea that the short-lived might have lasting value. In an interview in East Palo Alto, Calif., Peter Deng, Facebook’s director of product management, said Poke was in line with the company’s strategy of experimenting. “The demand comes from real life,” he said. “People want something that is more lightweight than a message and less permanent.”

Snapchat operates far from the world of Silicon Valley in a beach house in Venice Beach. Nonetheless, the start-up has caught the eye of Silicon Valley financiers.

Scott D. Cook, the founder of Intuit and a prominent entrepreneur and investor, has taken the Snapchat founders under his wing, and the start-up recently raised $13.5 million in venture financing, led by Benchmark Capital, which values the company at $60 million to $70 million even without an established revenue stream.

Mitch Lasky, who led Benchmark’s cash infusion, said he first heard about the app from his 16-year-old daughter. “I started hearing Snapchat in the same context as Twitter, Instagram and Facebook,” he said. “That got me curious.”

His firm was aware of the company’s seedier reputation with sexting, but the partners “saw the bigger picture” for the company’s potential foothold in the world of social media.

“People are looking to communicate in a real way,” Mr. Lasky said. “The real self, as opposed to the projected self. That was the piece that resonated the most with me.” Some backers see the possibility of Snapchat making money by allowing advertisers to send coupons or fashion ideas.

Article source: http://www.nytimes.com/2013/02/09/technology/snapchat-a-growing-app-lets-you-see-it-then-you-dont.html?partner=rss&emc=rss

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Report Assails Japan Response to Fukushima Daiichi Nuclear Accident

December 27, 2011 by Leave a Comment

The failures, which the panel said worsened the extent of the disaster, were outlined in a 500-page interim report detailing Japan’s response to the calamitous events that unfolded at the Fukushima plant after the March 11 earthquake and tsunami knocked out all of the site’s power.

Three of the plant’s six reactors overheated and their fuel melted down, and hydrogen explosions blew the tops off three reactor buildings, leading to a major leak of radiation at levels not seen since Chernobyl in 1986.

The panel attacked the use of the term “soteigai,” or “unforeseen,” that plant and government officials used both to describe the unprecedented scale of the disaster and to explain why they were unable to stop it. Running a nuclear power plant inherently required officials to foresee the unforeseen, said the panel’s chairman, Yotaro Hatamura, a professor emeritus in engineering at the University of Tokyo.

“There was a lot of talk of soteigai, but that only bred perceptions among the public that officials were shirking their responsibilities,” Mr. Hatamura said.

According to the report, a final version of which is due by mid-2012, the authorities grossly underestimated the risks tsunamis posed to the plant. The charges echoed previous criticism made by nuclear critics and acknowledged by the operator of the plant, Tokyo Electric Power.

Tokyo Electric had assumed that no wave would reach more than about 20 feet. The tsunami hit at more than twice that height.

Officials of Japan’s nuclear regulator present at the plant during the quake quickly left the site, and when ordered to return by the government, they proved of little help to workers racing to restore power and find water to cool temperatures at the plant, the report said.

Also, the workers left at Fukushima Daiichi had not been trained to handle multiple failures, and lacked a clear manual to follow, the report said. A communications breakdown meant that workers at the plant had no clear sense of what was happening.

In particular, an erroneous assumption that an emergency cooling system was working led to hours of delay in finding alternative ways to draw cooling water to the plant, the report said. All the while, the system was not working, and the uranium fuel rods at the cores were starting to melt.

And devastatingly, the government failed to make use of data on the radioactive plumes released from the plant to warn local towns and direct evacuations, the report said. The failure allowed entire communities to be exposed to harmful radiation, the report said.

“Authorities failed to think of the disaster response from the perspective of victims,” Mr. Hatamura said.

But the interim report seems to leave ultimate responsibility for the disaster ambiguous. Even if workers had realized that the emergency cooling system was not working, they might not have been able to prevent the meltdowns.

The panel limited itself to suggesting that a quicker response might have mitigated the core damage and lessened the release of radiation into the environment.

“The aim of this panel is not to demand responsibility,” Mr. Hatamura said. He also said the panel’s findings should not affect debate on the safety of Japan’s four dozen other nuclear reactors.

Taro Umemura contributed reporting.

Article source: http://www.nytimes.com/2011/12/27/world/asia/report-condemns-japans-response-to-nuclear-accident.html?partner=rss&emc=rss

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