October 29, 2020

Elites Flock to Anti-Euro Party, Alternative for Germany

The party, Alternative for Germany, held its first formal party congress on Sunday at a Berlin hotel. It has emerged as a wild card ahead of the September elections and poses a potential threat to Chancellor Angela Merkel’s re-election prospects.

The question is whether the party is experiencing the short-lived buzz of a political fad or represents the beginning of a significant movement that could jeopardize the struggling euro.

The new party is driven by a collection of elites, not a groundswell from the streets, starting with Bernd Lucke, 50, a Hamburg economics professor. Mr. Lucke, along with many of the new party’s supporters, previously belonged to Ms. Merkel’s conservative Christian Democratic Union before the Greek bailouts forced him to reconsider.

“We want to put an end to the flagrant breach of democratic, legal and economic principles that we have seen in the past three years, because Chancellor Merkel’s government said there is no alternative,” Mr. Lucke told more than 1,500 supporters on Sunday. “Now it is here, the Alternative for Germany.”

Mr. Lucke says the euro is dividing Europe rather than uniting it, as the single currency was meant to do. He has the support of a group of fellow academics who filed a case before Germany’s Federal Constitutional Court against the bailouts. Hardly a firebrand, he is also working with establishment figures like a former newspaper publisher and a former leader of the powerful Federation of German Industries. More than two-thirds of the supporters listed on the group’s home page have doctorates.

The party has more than 7,000 applicants and is working to gather enough signatures to be on the ballot in all 16 German states by the July deadline.

The fragile solidarity between the 17 euro-zone members has been sorely tested by the years of crisis and the growing list of bailouts. The countries needing help complain about diktats from Brussels and Berlin, while Germany and its northern allies grumble about the costs. Here in the German capital, the images of demonstrators in Athens, Madrid and now Nicosia, Cyprus — some of them waving swastikas or pictures of Ms. Merkel dressed as Hitler — have begun to try people’s patience.

Pollsters and political analysts doubt that the new party will attract more than 5 percent of the vote, the threshold for representation in the next Parliament. But it does not need that many votes to play the spoiler for Ms. Merkel.

“They don’t need to get 5 percent to make things very tight for the chancellor,” said Wolfgang Nowak, a fellow at the North Rhine-Westphalia School of Governance in Duisburg. “And every swastika on the street in Athens helps this new party.”

One new member, Martina Tigges-Friedrichs, said she belonged to the Free Democratic Party in the state of Lower Saxony for 15 years before she quit this year, frustrated that the pro-business party had abandoned its principles. She said she was attracted to Alternative for Germany because of the prominence of its founders, and because the current center-right government had put the country on a dangerous financial course.

“We keep giving out more and more money when we have so many problems here at home,” said Ms. Tigges-Friedrichs, who runs two hotels and a cafe in Bad Pyrmont.

The new party illustrates the increasing fragmentation of the political scene in Germany, Europe’s economic powerhouse. But the rapid ascent and equally rapid descent of another protest group, the Pirate Party, whose vague platform is focused on greater openness in government, offers a cautionary tale for the professors and professionals behind Alternative for Germany.

Polls show that a large number of voters, as many as one in four, would consider voting for the party. But that might not translate into actual votes. And several other surveys have shown that the nostalgia for the former German currency, the mark, is beginning to ebb.

Discontent has its limits. While Germans dislike the notional price tag for the many commitments and guarantees their government has made over the three years of the euro crisis, the job market is strong, borrowing costs are low and the country is approaching the balanced budget it so desperately craves.

Alternative for Germany has also called for simplifying the tax code, restructuring energy subsidies and favoring the most qualified workers for immigration, but ultimately it is known here as an anti-euro party despite efforts to paint itself as a broader movement.

“If the euro fails, Europe will not fail,” said Mr. Lucke, contradicting the chancellor’s repeated insistence that the future of the 27-member European Union is tied to the success of its common currency. “If the euro fails, then the policies of Angela Merkel and Wolfgang Schäuble fail,” he said, referring to the chancellor and her finance minister.

Eager to portray itself as a moderate, academic and middle-class party, Alternative for Germany is trying to sift out far-right opponents of the common currency who have praised the party’s anti-euro policy.

“We want to show where the deficits of the main parties lay,” Ms. Tigges-Friedrichs said.

But if the party wins enough votes from the center-right, it could help return a left-wing government of Social Democrats and Greens, who have been even more receptive than the current government to burden sharing between euro countries.

Steffen Kampeter, a deputy finance minister from Ms. Merkel’s party, told the newspaper Frankfurter Allgemeine Zeitung that Alternative for Germany was giving voters a far too rosy picture of how a euro-zone breakup would occur. “The new party is deluding voters that it’s possible to renationalize the common currency without drawbacks,” Mr. Kampeter said, “as if you could make eggs again out of scrambled eggs.”

Article source: http://www.nytimes.com/2013/04/15/world/europe/elites-flock-to-anti-euro-party-alternative-for-germany.html?partner=rss&emc=rss

Wall Street Takes a Step Backward

Stocks dropped on Thursday after retailers posted mixed monthly sales and the euro fell against the dollar.

The Standard Poor’s 500-stock index ended down 0.2 percent, while the Dow Jones industrial average fell 0.3 percent and the Nasdaq composite index declined 0.1 percent. European markets ended mostly lower.

At a news conference, Mario Draghi, head of the European Central Bank, said the euro exchange rate was important to growth and price stability, remarks that investors took as a sign the bank was concerned with the single currency’s recent advance. The euro fell to $1.3385.

Mr. Draghi denied that the E.C.B. was trying to influence the value of the euro, but he then made statements that markets interpreted as meaning the E.C.B. could take action if the euro rises too much.

Separately, the United States government said that weekly initial jobless claims dipped by 5,000 to 366,000. The four-week moving average fell to its lowest level since March 2008, signaling that the economy is continuing to recover slowly.

Another report showed that fourth-quarter productivity registered its biggest drop in nearly two years, while unit labor costs jumped 4.5 percent, more than economists expected.

“Claims didn’t look too exciting. They are pretty much in line,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments in Lisle, Ill. “The bigger surprise was the jump in unit labor costs that was pretty substantial. Over all, the market took the whole thing in stride.”

Several American retailers reported mixed January sales results, as consumers faced a hit to their take-home pay from higher payroll taxes. Macy’s shares rose 2 percent after the company reported that January same-store sales rose 11.7 percent.

Greenlight Capital, run by the fund manager David Einhorn, said on Thursday that it had sued Apple, saying the company should do more to unlock value for shareholders. Apple shares gained 1.8 percent.

Sprint Nextel edged down 1 percent after the mobile service provider posted higher fourth-quarter revenue, but subscriber numbers that disappointed Wall Street.

Article source: http://www.nytimes.com/2013/02/08/business/daily-stock-market-activity.html?partner=rss&emc=rss

Euro, Stocks Down as Debt Jitters Trump U.S. Data

The rising dollar dragged on commodity prices, with oil, copper and gold all falling, while mixed signals on the global economy kept Asian credit markets subdued.

Data on Friday showed that while U.S. employment growth accelerated last month, euro zone retail sales fell and economic sentiment soured at the end of 2011, pointing to recession in the currency bloc.

“If we didn’t have Europe, this market would be rallying on the back of the U.S. numbers,” said Jamie Elgar, dealer at stockbrokers Burrell Co in Brisbane.

U.S. jobless rate: http://link.reuters.com/vyn85s

U.S. payrolls: http://link.reuters.com/qyn85s

The euro zone crisis: http://r.reuters.com/xyt94s

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Worries over Europe intensified with a debt rating downgrade to junk status for Hungary — a member of the European Union but not part of the euro zone — and a report in German magazine Der Spiegel that the International Monetary Fund was losing confidence in Greece’s ability to clean up its public finances.

The euro fell to a 16-month low below $1.2670, and dropped as far as an 11-year low at 97.47 yen. The dollar, currently favoured by investors seeking a safe haven, rose 0.2 percent against a basket of major currencies.

Rob Ryan, FX strategist for BNP Paribas in Singapore, said the single currency was unlikely to see a sustained rebound unless the euro zone’s economic outlook improved, adding that the euro could fall to $1.25 in coming months.

“We need to see the economic data halt its slide and I think we need to see banks start to lend to each other. Neither of those are going to happen overnight,” he said.

BORROWING COSTS

With markets focused on concerns about rising borrowing costs in Europe, Friday’s upbeat jobs data failed to perk up U.S. stocks, and the weakness continued in Asia on Monday.

MSCI’s broadest index of Asia Pacific shares outside Japan fell 0.7 percent. The index had finished the first week of 2012 slightly higher, after shedding 18 percent in 2011. Tokyo markets were closed for a holiday.

SP 500 index futures fell 0.4 percent, pointing to a weaker start later on Wall Street, where the U.S. corporate earnings season will kick off when aluminium producer Alcoa reports after the closing bell.

A stronger dollar tends to weigh on commodities that are priced in the U.S. currency, and both precious and industrial metals lost ground.

Copper slipped more than 1 percent to around $7,500 a tonne, while gold fell 0.7 percent, getting close to the $1,600 an ounce level.

U.S. crude oil fell 0.7 percent to below $101, after climbing above $100 a barrel last week as rising tensions between Iran and the West raised fears of supply disruptions. Brent crude dipped below $113 a barrel.

(Additional reporting by Victoria Thieberger in Melbourne and Masayuki Kitano in Singapore; Editing by Kim Coghill)

Article source: http://www.nytimes.com/reuters/2012/01/08/business/business-us-markets-global.html?partner=rss&emc=rss

Germany’s Merkel Says Euro Crisis ‘Resembles a Marathon’

Mrs. Merkel was speaking to the German Parliament as Europe’s leaders prepare for yet another round of talks on the issue, which has roiled markets across the continent and forced the collapse of governments in Greece, Italy and elsewhere. Mrs. Merkel spoke in sober and serious tones, and her words drew sustained if not overly enthusiastic applause from lawmakers.

“Resolving the sovereign debt crisis is a process, and this process will take years,” Mrs. Merkel said.

Marathon runners believe that their efforts become particularly difficult after the “35 kilometer mark,” she said, adding, “but they also say that you can get to the finish if you are conscious of the magnitude of the task from the very start.”

“The future of the euro is inseparable from European unity. The journey before us is long and will be anything but easy,” she said. “But I am convinced that we are on the right path. It is the right path to take to reach our common goal: a strong Germany in a strong European Union that will benefit the people in Germany, in Europe.”

Later on Friday, President Nicolas Sarkozy of France met in Paris with British Prime Minister David Cameron — whose country is not part of the single currency but belongs to the European Union and whose economy is heavily dependent on continental trade.

“We need the euro zone to resolve their crisis. We need the countries of the euro to stand behind their currency,” George Osborne, Britain’s chancellor of the Exchequer, said shortly before Mr. Cameron traveled to Paris. “We do need the countries of the euro to work more closely together to sort out their problems.”

“Britain doesn’t want to be a part of that integration — we’ve got our own national interests — but it is in our economic interest that they do sort themselves out. The biggest boost that could happen to the British economy this autumn would be a resolution of the euro crisis,” Mr. Osborne said.

Mr. Cameron’s discussions in Paris came in advance of talks between Mr. Sarkozy and Mrs. Merkel on Monday to be followed by a summit of European leaders in a week’s time.

Mrs. Merkel’s speech came after Mr. Sarkozy said on Thursday night that Europe could be “swept away” by the euro crisis if it does not change. He said that Europe would “have to make crucial choices in the next few weeks,” and that France and Germany together were supporting a new treaty to tighten fiscal discipline and promote economic convergence in the euro zone.

The European Union needs “an overhaul,” Mr. Sarkozy said, to remain relevant and competitive, but he was vague about the details of what needs to be done.

“If Europe does not change quickly enough, global history will be written without Europe,” he said. “Europe needs more solidarity, and that means more discipline.”

On Friday, Mrs. Merkel again appealed for a strengthening of fiscal cooperation across the euro zone in what she called a “union of stability” able to enforce controls on individual European economies.

“Where we today have agreements, we need in the future to have legally binding regulations,” she said.

Mrs. Merkel said it was time to fix the “mistakes of construction” in the euro zone. “We must strengthen the foundations of the economic and monetary union in a sustainable way.”

“We are not only talking about a stability union, but we are beginning to create it,” she said, advocating changes in European treaties so as to create a fiscal union — a measure likely to be opposed by Britain.

Evoking the spirit of German leaders past, from Konrad Adenauer to Helmut Kohl, Mrs. Merkel said Germany wanted to “avoid divisions” by creating a two-speed Europe split between those inside the euro zone and those outside it.

She again ruled out so-called euro bonds backed by all 17 members of the existing currency union, which embraces many different levels of economic strength ranging from struggling Greece to the export-driven German economy which is seen as the powerhouse of Europe. She called the idea of euro bonds “unthinkable.”

Germany, she said, did not wish to dominate Europe. “That is far-fetched,” she said.

“Germany and European unity are two sides of the same coin,” she said. “That is something we will never forget.”

Frank-Walter Steinmeier, parliamentary leader of the opposition Social Democrats, accused Mrs. Merkel of “talking past the heart of the matter” and said her “tactical approach was not making things stable.”

But Rainer Brüderle, the head of the parliamentary group of Mrs. Merkel’s junior coalition partner, the Free Democrats, offered an important token of support, saying Mrs. Merkel was “fighting for the future of Europe and we stand behind her.”

Nicholas Kulish reported from Berlin, and Alan Cowell from London. Steven Erlanger contributed reporting from Paris, and Victor Homola from Berlin.

Article source: http://feeds.nytimes.com/click.phdo?i=355239a00b797809ba331ba4865e8afc

Reluctantly, Europe Inches Closer to a Fiscal Union

The message was clear: join together in a stronger union, or risk collapse.

The story of America’s failed early effort to operate as a loose confederation of 13 states is increasingly relevant for many European officials who are grappling with the drastic problems of their own flawed 17-nation currency union. The lack of strong central coordination of the euro zone’s debt and spending policies is a key reason Europe has been unable to resolve its financial crisis despite more than 18 months of trying.

And that is why, despite all the political obstacles, Europe appears to be inching closer to a more centralized fiscal union that would eventually turn the euro zone into something resembling a United States of Europe.

“If today’s policy makers want to successfully stay the course, they will have to press ahead with structural changes and deeper economic integration,” António Borges, director of the International Monetary Fund’s European unit, said during a recent speech. “To put the crisis behind us, we need more Europe, not less. And we need it now.”

Nothing happens quickly in Europe, however. For the most part, such efforts are still being conducted behind-the-scenes and many of the ideas have yet to hit official agendas or the public arena. But several longtime financial and central bank officials and staff members said there had been a substantial step-up in planning for a closer European fiscal relationship to match the unified monetary union under which the euro zone has operated for more than a decade.

For now, officials are mainly talking in public in generalities.

“The crisis has clearly revealed the need for strong economic governance in a zone with a single currency,” Jean-Claude Trichet, the departing president of the European Central Bank, said during a speech Monday, repeating earlier calls for greater fiscal discipline. “I think that European nations will create a confederation and we could then have a confederal finance minister, whose mission would be the surveillance of the entire zone, and who would be able to impose decisions,” on governments in breach of euro zone rules.

Officials, who spoke anonymously because their discussions are politically sensitive, said a major overhaul of the way Europe conducts fiscal policy — coordinating government spending, taxes and deficits — was likely to take a long time and require further changes in the treaties governing the euro. But they pointed to the smaller changes that were already taking place as evidence that euro area financial ministries see that they have little choice but to move together if they want to avoid a catastrophic breakdown of the euro zone.

With the new bailout for Greece that was agreed upon by European leaders in July still awaiting approval from each country in the euro zone, the fractionalized way that Europe runs fiscal decision-making risks setting off yet another crisis at each step along the way. Every plan requires agreement among finance ministers and the Parliament of any member country can veto the deal.

Many economists say that the Continent’s debt crisis, which began in early 2010 with the threat that Greece might have to default on its loans, could have been resolved far more quickly if there were some sort of central financial body, akin to the Treasury Department in the United States.

“If they had the equivalent of the U.S. Treasury then this treasury could have formulated proposals with the collective objective in mind rather than 17 national objectives competing with each other,” said Garry J. Schinasi, a former official with the International Monetary Fund who now privately advises European central banks and governments. “Instead, they fumbled around and took two baby steps forward and three backward.”

The idea of a European Treasury that would enforce fiscal discipline on wayward countries, while also having the power to spread E.U. wealth from healthier countries to ones struggling to pay their debts, is fiercely unpopular among voters in many countries. Those in prosperous nations like Germany do not want to see their taxes used to bail out countries that borrowed their way into trouble. And those in weaker nations are reluctant to allow outsiders to dictate how their governments spend their money and tax their citizens.

Article source: http://feeds.nytimes.com/click.phdo?i=69a50c297e8affcec1a415bc8ab501f2

Global Stocks Fall as Markets Brace for U.S. Jobs Data

Confirmation that Greece will miss its 2011 deficit target of 7.6 percent and uncertainty over Italy’s commitment to austerity measures underscored unease about the single currency zone, prompting investors to shy away from riskier assets.

The U.S. employment report, due at 8:30 a.m. EDT, is expected to show an increase of 75,000 jobs, down from 117,000 in July.

“I think the job figures are going to be worse than expected. It could be a wake-up call for the market and share prices could go down even further,” said Koen De Leus, strategist at KBC Securities in Brussels.

“Expectations of QE3 (another round of U.S. quantitative easing) have helped shares in the past days, but at the end of the day, the market needs a better economic environment that stimulates growth and company results.”

MSCI’s world equity index lost 0.7 percent. It was still on track for a second consecutive weekly gain after a volatile August that pushed the benchmark index to an 11-month low at one point.

European stocks fell 1.7 percent after rising so far this week, while emerging stocks dropped 0.7 percent following a five-day rally.

U.S. crude oil was down 0.9 percent at $88.17 a barrel.

Bund futures rose 54 ticks, supported by weak demand at this week’s Italian and Spanish debt sales and dismal manufacturing figures on Thursday.

Talks between Greece and international inspectors on a new aid tranche were put on hold, after a senior government official told Reuters on Thursday that Greece expects its 2011 budget deficit to reach 8.1 to 8.2 percent of GDP.

European Central Bank President Jean-Claude Trichet told Italy’s struggling center-right government to deliver on its promised austerity package, adding to international pressure on weakened premier Silvio Berlusconi.

ECB support is vital because the bank has been buying Italian bonds in markets to keep yields low enough for Rome to continue borrowing without external aid.

The euro lost a quarter percent to a three-week low around $1.4207.

“It’s hard for the euro to go down very fast against the dollar given expectations for more monetary easing in the U.S. But if we continue to get worst-case scenarios panning out in the euro zone it will have to go lower,” said Adrian Schmidt, currency strategist at Lloyds Banking Group.

The dollar rose 0.1 percent against a basket of major currencies.

(Additional reporting by Atul Prakash; Editing by John Stonestreet)

Article source: http://feeds.nytimes.com/click.phdo?i=60d0af2d873e875888e875987f9903cb

World Markets Dogged by Recovery Fears

LONDON (AP) — Worries over the state of the global economic recovery weighed on stock markets Monday but the euro managed to claw back some lost ground despite the weekend arrest of Dominique Strauss-Kahn, the head of the International Monetary Fund.

Strauss-Kahn’s arrest in New York on charges he sexually assaulted a hotel maid had weighed on Europe’s single currency as trading got under way in Asia, but investors soon concluded that it was unlikely to affect a meeting of European finance ministers in Brussels later.

Strauss-Kahn had been scheduled to join the meeting to put the finishing touches to a euro78 billion ($111 billion) bailout of Portugal. The ministers will also consider Greece’s economic plight and whether to extend it any more help.

By early afternoon London time, the euro was trading 0.3 percent higher at $1.4119. Earlier, it had fallen as far as $1.4046, its lowest level since March 29.

Stock markets were faring much worse.

In Europe, the FTSE 100 index of leading shares was down 0.9 percent at 5,873 while Germany’s DAX fell 1.3 percent to 7,307. The CAC-40 in France was 1.5 percent lower at 3,961.

Wall Street was poised for a lower opening, too — Dow futures fell 0.4 percent at 12,507 while the broader Standard Poor’s 500 futures fell an equivalent rate to 1,328.

Doubts about the strength of economic recovery, particular in the U.S., have weighed on markets in the past couple of weeks after they enjoyed their best first quarter since 1998.

The Standard and Poor’s 500 stock index, a broad market benchmark, is up just 1 percent this quarter after jumping 5.4 percent in the first three months of the year. That weaker performance is in large part because of conflicting data about the health of the U.S. economy.

Investors will be closely monitoring a speech from U.S. Federal Reserve chairman Ben Bernanke.

“Bernanke’s comments on the outlook for the U.S. economy will be meticulously scrutinized early this afternoon, as will sales updates from a number of U.S. retailers,” said Ben Critchley, a sales trader at IG Index. “At present Friday’s sell-off across the Atlantic is set to continue.”

Earlier in Asia, Japan’s Nikkei 225 index dropped 0.9 percent to close at 9,558.30 with banking shares incurring losses following comments last week by Chief Cabinet Secretary Yukio Edano suggesting that Tokyo Electric Power Co. will need help repaying its debts in the wake of March’s devastating earthquake and tsunami.

South Korea’s Kospi lost 0.8 percent to 2,104.18, and Hong Kong’s Hang Seng shed 1.4 percent to 22,960.63.

Mainland Chinese shares lost ground Monday following the latest increase in the central bank’s reserve requirement for banks, which was announced Friday. The benchmark Shanghai Composite Index lost 0.8 percent to 2,849.07 and the Shenzhen Composite Index of China’s smaller, second exchange lost 0.2 percent to 1,198.72.

Commodities have been badly hit recently by fears over the global recovery and oil prices took another dive Monday.

Benchmark crude for June delivery was down $1.72 to $97.93 a barrel in electronic trading on the New York Mercantile Exchange.

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Pamela Sampson in Bangkok contributed to this report.

Article source: http://www.nytimes.com/aponline/2011/05/15/business/AP-World-Markets.html?partner=rss&emc=rss