February 7, 2023

One More Sign for a Turn to Growth in Europe

A survey of corporate purchasing managers by Markit Economics, a data and analysis firm in London, pointed to a broad — if tentative — recovery in the zone, the 17 European Union countries that use the euro.

Markit’s composite output index — which tracks sales, employment, inventory and prices — rose to 51.7 in August from 50.5 in July. The latest figure was the highest in 26 months. A number over 50 indicates growth.

Although not all the news was good — the survey indicated a contraction in French output during the month — the results were the second recent set of promising signals. Last week, official data showed that Europe broke out of recession in the second quarter of the year, helped by a rebound in household spending in Germany and France.

The data “provide further evidence that the currency union continued to expand in the third quarter, albeit at a pretty modest pace,” Jonathan Loynes, an economist in London with Capital Economics, wrote in a research note. “On past form, the index is now consistent with quarterly growth in euro zone G.D.P. of about 0.2 percent,” equivalent to an annualized gross domestic product rate of about 0.8 percent, he wrote.

The world economy could use a European economic renaissance, as investors have been unnerved by signs of a slowdown in emerging markets and anxiety about the timing and impact of the Federal Reserve’s monetary stimulus policies.

Still, there is little sign that the tepid recovery will be enough to address the main problems weighing on the euro zone: an unemployment rate at record highs and a crisis of confidence in public sector finances.

Germany, with the largest European economy, led the way again, with output expanding at its fastest pace since January and with manufacturing at a 25-month high, according to Markit data.

Carsten Brzeski, an economist in Brussels with ING Bank, said Germany was benefiting from strong domestic demand and improvements across the European economy. “It looks as if new growth hopes for the rest of the euro zone are stimulating German confidence,” he wrote in a note to clients, “which in turn could lead to higher German economic growth and could eventually become growth-supportive for the euro zone.”

Karl-Heinz Streibich, the chief executive of Software AG, based in Darmstadt, Germany, said Germany had benefited from its diverse pool of thousands of midsize manufacturers. “We are not totally dependent on the well-being of 10 or 15 companies,” he said by telephone.

Software AG has even been hiring people at its offices in Spain and Italy, albeit in small numbers, Mr. Streibich said. But the company, which had revenue last year of about 1 billion euros, or $1.3 billion, is gaining sales in those countries at the expense of rivals — not because the overall market is growing, he said.

“We don’t ride a growth wave of G.D.P.,” he said. “It is about taking market share from the competition.”

Data from French purchasing managers pointed to a contraction, with the index at 47.9 in August after 49.1 in July. That suggests that France’s second-quarter growth spurt of 0.5 percent, or about 2.0 percent at an annualized rate, might be a one-time event.

In most European countries, “There’s increasing confidence,” said Feike Sijbesma, chief executive and chairman of DSM, a Dutch specialty chemical company. “That’s good because it could help increase demand.”

DSM reported on Aug. 6 that sales rose 9 percent in the second quarter from a year earlier, to 2.5 billion euros, as profit before interest, taxes, depreciation and amortization rose 19 percent, to 345 million euros.

Mr. Sijbesma said that DSM’s performance was more reflective of its innovations, some of which helped its customers to save money, than of any rebound in Europe. “I’d be very cautious,” he added. “I don’t want to spoil the party, but I feel that in our business we’re doing much better in the rest of the world than in Europe.”

Jack Ewing contributed reporting from Frankfurt.

Article source: http://www.nytimes.com/2013/08/23/business/global/euro-zone-economy-shows-further-signs-of-growth.html?partner=rss&emc=rss

OPEC Leaves Production Targets Unchanged

LONDON — With the price of oil relatively strong, OPEC decided on Friday to maintain its current target for oil production at 30 million barrels per day, a move that was expected by the markets.

The price of Brent crude oil, the European benchmark, has recently hovered around $100 a barrel, a level that met with the approval of most members of the Organization of the Petroleum Exporting Countries, meeting in Vienna.

“There is no compelling reason to rock the boat,” wrote Bhushan Bahree, an analyst at market research firm IHS Cera, in a research note.

At a news conference following the meeting, the OPEC secretary general, Abdalla S. el-Badri, waved off a suggestion that the $100-per-barrel level was acting as a drag on the world economy, arguing that much of the eventual price at the pump was due to taxes, not the crude oil itself.

“If the government wants to do something for their economy, they should reduce taxes so people can buy more gasoline,” he said.

Despite today’s prices, OPEC is losing market share to countries outside of the cartel, especially the United States and Canada.

Saudi Arabia, by far the largest producer, has cut production by about 600,000 barrels a day from a year ago, to 9.3 million, according to IHS Cera. In the same period, Iranian production dropped by 400,000 barrels a day as American sanctions took a toll on the country’s industry.

For years, oil prices rose with equity prices, but recently oil has “fallen even as the S.P. has made record highs,” wrote Seth M. Kleinman, an analyst at Citi, in a research note, referring to the Standard Poor’s 500-stock index. Mr. Kleinman also noted that there has been “significant liquidation” by speculators in the futures markets over the last three months.

From an OPEC perspective, the outlook for the next year is not rosy. Many analysts forecast that global demand will increase modestly this year and that most or all of the increase will be supplied by non-OPEC producers, led by the United States. If so, that would leave little room for OPEC output to grow and may force the organization to either make further cuts or allow global inventories to build.

“The second half of the year could see a further easing in fundamentals,” OPEC said Friday in a statement.

OPEC’s current quotas have been in place since 2011.

Article source: http://www.nytimes.com/2013/06/01/business/global/opec-leaves-production-targets-unchanged.html?partner=rss&emc=rss

China Data Confirm Slowdown in Factories

BEIJING — Growth in the mainland Chinese manufacturing sector unexpectedly slowed in April as new export orders fell, data released Wednesday showed, raising fresh doubts about the strength of the economy after a disappointing first quarter.

The official purchasing managers’ index fell to 50.6 in April from an 11-month high in March of 50.9. A reading above 50 indicates expansion; below indicates contraction. Analysts had expected the April reading to be 51.

The reading mirrored a similar decline in a preliminary P.M.I. report last week by the British bank HSBC, suggesting that China’s export engine faces obstacles resulting from the euro zone recession and sluggish U.S. growth.

China’s new leadership has signaled it will step up infrastructure investment, which analysts said would provide support for the economy in the second quarter.

“Over all, my general feel is that China is growing, but slower than people expected, say, a month ago,” said Alvin Pontoh, economist at TD Securities in Singapore.

“But I don’t think this is reason for alarm,” he added. “This is probably what the new administration is looking for. Structurally, China cannot grow at 9 or 10 percent any more, so over the next few years, you’d reasonably expect growth to edge lower — to, say, 7 percent or so.”

Global data, including lower-than-expected U.S. economic growth figures, have dented the optimism at the start of the year that the world economy was picking up.

Market reaction to the P.M.I. was muted, as many countries in Asia and Europe were marking the Labor Day holiday. Chinese markets were closed and were scheduled to reopen Thursday.

The official P.M.I. figures showed that a subindex of new orders had fallen to 51.7 in April from 52.3 in March, holding above 50. However, the index of new export orders fell to 48.6 from 50.9 in March, suggesting the orders were shrinking.

The input price subindex fell to 40.1 in April, its lowest in at least four years.

“The dip in April P.M.I. shows that the foundation for China’s economic recovery is still not solid,” Zhang Liqun, an economist at the Development Research Center, a government agency in Beijing, said in an e-mailed statement accompanying the index.

“All these show the possibility for China’s growth to slow slightly in the future. We must work to stabilize domestic demand and make our economic recovery more sustainable,” he said.

HSBC’s preliminary P.M.I. for April fell to 50.5, from 51.6 in March, as new export orders shrank. The final reading is scheduled to be published Thursday.

The latest P.M.I. adds risks to market expectations that China’s annual economic expansion will pick up to 8 percent in the April-to-June quarter after slipping in the January-to-March period to 7.7 percent, from 7.9 percent in the previous quarter.

Zhiwei Zhang, a China economist at the Japanese bank Nomura, said in a client note before the release of the P.M.I. figures that he expected growth to ease again in the second quarter, to 7.5 percent.

Apart from expectations of more infrastructure investment, the central bank is expected to hold rates steady throughout 2013, as it needs to tread a delicate balance between inflation and growth, a Reuters poll showed.

“We still expect major activity indicators to show a moderate growth recovery in April” and in the second quarter, Ting Lu, a China economist in Hong Kong for Bank of America Merrill Lynch, said in a note to clients. “On policies, we expect overall monetary and fiscal policies to remain accommodative, though we see no need for significant stimulus.”

Beijing is aiming for economic growth of 7.5 percent in 2013, lower than the double-digit levels in most years in the past three decades, as it tries to shift the economy to reduce reliance on exports and more towards consumption.

 

Article source: http://www.nytimes.com/2013/05/02/business/global/02iht-chinapmi02.html?partner=rss&emc=rss

Slowdown in Germany Worries Euro Zone

Portugal’s central bank cut its economic forecast for the year on Tuesday, saying its economy will contract more steeply than expected. France said it was likely to miss its target for narrowing the budget deficit, raising the prospects of deeper spending cuts and additional taxes. Last month, Britain said its austerity budgets would extend three extra years, to 2018, because of weaker than expected growth.

“This idea that Germany is a powerhouse dragging the rest of Europe along with it is a bit of a myth to be honest,” said Philip Whyte, a senior research fellow at the Center for European Reform in London. “You have a very weak periphery and a core which is not as strong as everyone seems to believe.”

Throughout the debt crisis, Germany has managed to float above the bad news, enjoying record employment, rock-bottom borrowing costs and export-led growth that kept chugging, in spite of the cloud hanging over the euro zone. But its European partners are also among its biggest customers, leaving it vulnerable to the Continent-wide slowdown exacerbated by the very austerity policies of Chancellor Angela Merkel.

“The longer the euro crisis lasts, the more difficult the situation becomes for Germany,” said Stefan Kooths, an economist at the Kiel Institute for the World Economy. “Germany is not a Teflon economy.”

The German government is scheduled to release its report on the economy on Wednesday, and it will forecast growth in 2013 of 0.5 percent, the newspaper Handelsblatt reported. In the euro zone as a whole, which is in recession with record unemployment, any growth is considered positive. But most forecasts are based on the assumption that financial markets will remain calm. If anything shakes investor confidence, like political turmoil in Italy or Greece, the weak growth rate means Germany would not have much cushion against recession.

France will probably miss its deficit reduction target for 2012, according to preliminary data released Tuesday by the French government. Officials in Paris aimed for a deficit of 4.5 percent of gross domestic product, but data for November suggests the shortfall will be 4.8 percent, ING Bank estimated.

That means President François Hollande would have to find an additional $6.65 billion in revenue to meet the 2013 budget target, and France could face another credit rating downgrade. The data also shows the challenge of keeping France’s overall debt level from rising above its current level of more than 90 percent of G.D.P.

By contrast, Germany’s public finances are robust. Federal, state and local governments recorded a surplus for the year equal to 0.1 percent of G.D.P., the first government surplus since 2007. That creates leeway for Ms. Merkel to stimulate the economy with public spending if the downturn is worse than expected.

Despite the contraction in the fourth quarter, a compilation of annual economic data by the statistical office showed that the German economy is in fundamentally good shape. Exports rose 4.1 percent during the year, and 41.6 million people were employed — a record high and the sixth annual increase in a row.

And Jörg Krämer, chief economist at Commerzbank in Frankfurt, said in a note to clients that he expected the German economy to expand again in the first half of the year.

Still, Mr. Whyte, of the Center for European Reform, said that while he was more optimistic than at this time last year, “we’re still not out of the woods.”

Nicholas Kulish reported from Berlin, and Jack Ewing from Frankfurt.

Article source: http://www.nytimes.com/2013/01/16/world/europe/slowdown-in-germany-worries-euro-zone.html?partner=rss&emc=rss

W.T.O. Grants Russia Membership

GENEVA — Global trade ministers on Friday approved Russia’s bid to join the World Trade Organization, giving Prime Minister Vladimir V. Putin a victory on the international stage at a time of rising domestic opposition to his hold on power.

The Nigerian trade minister, Olusegun Olutoyin Aganga, struck a gavel to announce that the W.T.O. trade ministers’ meeting here had accepted the bid. Because the organization operates by consensus, Russia had to first reach bilateral agreements with 57 of its current 153 members to secure their support.

“This result of long and complex negotiation is favorable both for Russia and for all our future partners,” President Dmitri A. Medvedev said in a statement read to the conference by the first deputy prime minister, Igor I. Shuvalov. He called on world leaders to continue working for freer and fairer trade, adding: “Russia is ready to contribute as much as possible into this work.”

The W.T.O. sets the rules governing global commerce and provides a forum for resolving disputes. Membership ends the anomaly of having Russia, a leading oil and natural gas exporter as well as a permanent member of the United Nations Security Council, outside the world trade system. Russia, with a population of 140 million, is the last major world economy to join the organization. The W.T.O. says that with Russia’s accession, more than 97 percent of all world trade will take place among member countries. It had been about 95 percent.

Pascal Lamy, the W.T.O. director general, said that the agreement would “cement the integration of Russia into the world economy” and that it “affixes the W.T.O. quality label to the Russian Federation.” Likening Russia’s long journey to membership to a marathon, he also warned that “once you cross the finish line, attention immediately changes to the future, to implementation.”

Mr. Putin can point to joining the W.T.O. as a sign that Russia is taking a bigger role on the global stage, even as his government confronts signs of burgeoning political discontent in the country’s large cities. During an interview, Andrei A. Slepnev, the Russian official who oversaw the negotiations, credited Mr. Putin and Mr. Medvedev for getting the deal done, and noted that Mr. Putin had referred to it Thursday as “a victory for Russia.”

In seeking membership, Moscow has had to bring its laws into conformity with W.T.O. rules, but it stands to gain as much as one percentage point in annual economic growth, according to some estimates. Membership is also expected to shine light on the regulations and corruption that dog the Russian economy.

Other W.T.O. members will benefit from a near-term reduction in tariffs on their exports once the lower house of Parliament, the Duma, ratifies the deal.

But businesses in the United States will remain captive for now to the Jackson-Vanik amendment, a relic of Cold War politics, under which U.S. trade with what was then the Soviet Union was tied to the Kremlin’s willingness to allow Jewish emigration.

On Thursday, the administration of President Barack Obama filed a letter with the W.T.O. saying it could not offer so-called permanent normal trade relations with Russia; Moscow in turn said it would not extend such treatment to the United States. America has issued similar letters in the case of other nations, including Romania and Vietnam, only to have Congress give its approval to improved relations weeks later.

The Obama administration has called for the repeal of Jackson-Vanik, saying trade with Russia would have a positive effect on its human rights record. The law is in conflict with U.S. international obligations, as W.T.O. rules require that nations extend most-favored nation status to all members. Asked if he thought the amendment would prove a lasting impediment to U.S.-Russian trade relations, Ron Kirk, the U.S. trade representative, said, “We hope not.”

Mr. Slepnev said the Jackson-Vanik obstacle was “a technical question. We believe the American administration will work out an agreement with Congress in the next half-year.”

Article source: http://feeds.nytimes.com/click.phdo?i=93146e1d2ae8a4edd744bab40c4820b6

Euro Crisis Pits Germany and U.S. in Tactical Fight

Chancellor Angela Merkel of Germany defied skeptics and laid the groundwork for a deeper union that she said rights the mistakes of the euro’s birth and puts integration on a stable path for the long term. In the process, she forced German fiscal discipline on Europe as the prescription for combating the ills that afflict the region.

Yet even as the cogs of the European agreement were being fitted into place, President Obama warned in his most explicit comments on the matter to date that the European — read, German — focus on long-term political and economic change was well and good. But any changes, he said, risked coming undone if leaders did not react quickly and powerfully enough to the market forces threatening the euro’s survival in the coming months.

At the heart of the debate is the question of how far governments must bend to the power of markets. Mr. Obama sees retaining the stability of markets and the confidence of investors as a primary goal of government and a prerequisite for achieving any major changes in public policy. Mrs. Merkel views the financial industry with profound skepticism and argues, in almost moralistic fashion, that real change is impossible unless lenders and borrowers pay a high price for their mistakes.

“It’s a battle of ideas,” said Almut Möller, a European Union expert at the German Council on Foreign Relations. “There is a different understanding of how to set up a sustainable economy in a globalizing world. Here there is a major rift.”

It will be difficult to know for weeks, or maybe even in months, which approach is right. But it is clear that the stakes are high, with the health of the world economy, the European Union and perhaps Mr. Obama’s presidential hopes hanging in the balance. Economists have fretted for months that forcing austerity plans on Europe’s troubled economies — while a good long-term solution — could lead to deep recessions in the short term, compromising any chance for effective change.

On a political level, Mrs. Merkel could look back on last week’s meeting of leaders in Brussels and declare, “We have succeeded.” Where her mentor, former Chancellor Helmut Kohl, failed, Mrs. Merkel managed to push through enforceable oversight of government spending that would allow the European Court of Justice to strike down national laws that violate fiscal discipline.

Initial market reaction to the Brussels meeting was positive, but that has happened before as deal after deal has been struck between European leaders. Skeptics say that, economically, Mrs. Merkel, the hard-line austerity queen of Europe, has won a hollow victory, one that will fall apart like every other solution that was proclaimed as lasting but proved to be fleeting.

“If the new arrangement turns out to be too toothless to enforce the rules, we’ll be back to square one,” said Thomas Klau, a political analyst and head of the Paris office of the European Council on Foreign Relations.

Just ahead of Mrs. Merkel’s unexpectedly robust success, Mr. Obama issued his unheeded warning from across the Atlantic. “There’s a short-term crisis that has to be resolved,” he said, “to make sure that markets have confidence that Europe stands behind the euro.”

Mr. Obama is fiercely proud of the record he achieved in keeping not just the United States but also the entire world out of an acute financial meltdown after 2008, presiding over enormous stimulus spending in tandem with unrestrained support from the Federal Reserve. The president and his allies now say that in doing so, they may well have prevented the world from falling into another Great Depression.

By ignoring the short-term threat, American officials say, Mrs. Merkel is unwittingly courting the very threat they so narrowly managed to keep at bay. Strong governments can borrow cheaply, mainstream economists on both sides of the Atlantic argue, and have an obligation to intervene more aggressively than they would in normal times to make up for the slump in private demand.

Article source: http://feeds.nytimes.com/click.phdo?i=2dc9822db22798ae9bf2b2009cbbcda4

Citigroup to Lay Off 4,500 Workers

Citi will also take a $400 million charge in the fourth quarter to cover the severance and other costs related to the downsizing effort, which will reduce the bank’s work force by about 2 percent, to 262,500 employees. Citi now has roughly 100,000 fewer employees than it did at the end of 2007, before the worst of the financial crisis.

Most of the job losses will come from Citi’s back-office and investment banking operations. Its Wall Street-related business has been hard hit by a slowdown in trading volume amid the turmoil in Europe. But nearly every part of Citi’s sprawling businesses will face cuts.

Citigroup is the latest big bank to announce extensive layoffs, following similar actions by many of its rivals that have coursed through the industry since last fall. While Citi quietly began pruning its work force this summer, Bank of America, Goldman Sachs, Wells Fargo, Bank of New York Mellon — and almost every large European bank — have announced big job cuts.

Wall Street companies have come under intense pressure as the world economy has slowed in recent months, and their once-lucrative trading businesses have sputtered as investors have parked their cash on the sidelines. More traditional banking has also been hit hard by anemic demand for loans, as well as new regulations and consumer outcry against fees on checking accounts, debit cards and credit cards.

Speaking at the Goldman Sachs financial services conference on Tuesday, Mr. Pandit framed the layoffs as part of his plan to brace the company for an even more difficult road ahead.

“Financial services faces an extremely challenging operating environment,” he said. “These trends will likely significantly affect the competitive landscape in the coming years.”

Ever since taking over the bank almost four years ago, Mr. Pandit has been making steady progress on a plan to transform Citi from a global banking behemoth into a more nimble, corporate lender. He has shed hundreds of billions of dollars in assets to lighten its balance sheet, strengthened the bank’s risk controls and repaid the $45 billion bailout the bank received to prevent its collapse in the fall of 2008.

For his efforts, Mr. Pandit accepted a $1-a-year salary — although Citigroup’s board handed him a retention package worth at least $23.2 million earlier this year.

But as the market turmoil in Europe has rippled around the world, Mr. Pandit’s recovery strategy has lost some steam. While Citigroup has cranked out seven consecutive quarters of profits after it set aside less money to cover bad loans, the bank has struggled to increase its income. Revenue fell 10 percent to about $60 billion in the first nine months of this year, compared with the period a year ago.

In his remarks on Tuesday, Mr. Pandit said Citi’s investment banking and trading performance in the current quarter had thus far been in line with its third-quarter results. Those numbers were solid, but nowhere near the blockbuster performance its traders had turned in earlier in the year.

And he warned that the bank was unlikely to see a repeat of the $2.6 billion paper gain it realized in the third quarter, when it benefited from accounting quirks tied to the valuation of its own debt. Based on Monday’s credit spreads, Mr. Pandit said, Citi is on track to take a $600 million paper loss in the fourth quarter.

Article source: http://feeds.nytimes.com/click.phdo?i=a586b05b0ed61d93faf07073138d94ca

Businesses Scramble as Credit Tightens in Europe

Europe’s worsening sovereign debt crisis has spread beyond its banks and the spillover now threatens businesses on the Continent and around the world.

From global airlines and shipping giants to small manufacturers, all kinds of companies are feeling the strain as European banks pull back on lending in an effort to hoard capital and shore up their balance sheets.

The result is a credit squeeze for companies from Berlin to Beijing, edging the world economy toward another slump.

The deteriorating situation in the euro zone prompted the Organization for Economic Cooperation and Development on Monday to project that the United States economy would grow at a 2 percent rate next year, down from a forecast of 3.1 percent growth in May. It also lowered its economic outlook for Europe and the rest of the world, and a credit contraction could exacerbate the slowdown.

In addition, Moody’s Investors Service, the credit-rating agency, on Monday raised the possibility of mass downgrades of European government debt if a forceful resolution to the escalating crisis was not found.

Investors have begun to treat Europe’s big banks as the weak link in the global financial chain because of their huge holdings of bonds issued by debt-laden governments like Italy and Spain.

American money market funds have been closing the spigot of money they lend to European banks, forcing them to tighten lending standards and, in some cases, even withdraw financing from longtime customers. To make matters worse, European institutions are simultaneously under pressure from their regulators to hold more capital for each dollar they lend, prompting many banks to reduce their portfolio of loans. Analysts say Europe’s banks could shed up to 3 trillion euros of loans over the next few years, equal to about 10 percent of their total assets.

“If your largest banks aren’t able to provide credit, it hinders economic development and contributes to a recession,” said Alex Roever, a fixed-income research analyst at JPMorgan Chase.

Air France, for example, typically relied on French banks like BNP Paribas and Société Générale to help it finance about 15 percent of what it spends to purchase airplanes. Now those banks are retreating from making airline loans to save capital.

As an alternative, Air France officials say that they started developing closer ties with Chinese and Japanese banks, which have not faced the same pressure as their euro zone counterparts, to help pick up the slack.

Executives of Emirates Airlines, based in Dubai, are turning to the Islamic financing system, as well as to lenders in emerging markets, to help pay for its new fleet as some of the European banks shut off lending. Emirates has ordered 243 aircraft, worth more than $84 billion, from Airbus, Boeing and other aerospace companies.

“We were kind of planning for finance from the European banks,” Tim Clark, president of Emirates, told Reuters. “It’s just a bit difficult now.”

A failure to secure financing could quickly add up to lost jobs in the United States, Latin America and elsewhere.

The airplane maker Boeing recently warned that a European pullback could affect its business next year. With some European banks out of the picture, “this leaves a difference that must be made up by other sources if airplane deliveries across the industry, already set to increase in 2012, are to occur as planned,” said John Kvasnosky, a spokesman for the company.

Embraer, a Brazilian aerospace company, tempered its growth expectations despite having a pickup in commercial and business jet sales in the third quarter.

“This whole situation in Europe again has stalled this recovery process,” said Frederico Curado, chief executive of Embraer, in a conference call with investors in early November. “The way we see the world going forward is of a moderate growth.”

It remains to be seen, though, whether even moderate growth can be achieved. Moody’s cautioned that there was an increased chance that more than one country in the euro zone could default. In spite of that warning, investors put their fears aside and sent stocks up Monday by nearly 3 percent in New York.

Investors remain hesitant about government bond offerings, though. A tepid auction in Germany last week was particularly unnerving since its economy has long been seen as Europe’s financial bulwark. In Italy, weak demand for bonds pushed yields back above the critical 7 percent threshold, a level that has prompted other government borrowers to seek bailouts.

Reporting was contributed by Jack Ewing, Keith Bradsher, Stephen Castle and Sara Hamdan.

Article source: http://feeds.nytimes.com/click.phdo?i=22d2d3fd88a0d762007b9670cfbb0299

Pressure Mounts for Urgent Action to Avert a Euro Zone Split

The Organization for Economic Cooperation and Development said Monday that the euro crisis remained “a key risk to the world economy.” The research group, which is based in Paris, sharply cut its forecasts for wealthy Western countries and cautioned that growth in Europe could come to a standstill.

The warning came just hours after Moody’s Investors Service issued its own bleak report on Europe’s sovereign debt crisis. Moody’s, a leading credit rating agency, warned that the problems could lead multiple countries to default on their debts or exit the euro, which would threaten the credit standing of all 17 countries in the currency union.

Despite the gloomy predictions, stock indexes rose sharply in Europe and Asia, and were surging in Wall Street trading, and the euro strengthened, on hopes that European leaders were working on a new approach to resolve the crisis.

Finance ministers from the euro zone were to meet Tuesday in Brussels to try to agree on how to increase the firepower of their bailout fund, and also hope to sign off on an €8 billion, or $10.7 billion, loan installment to prevent Greece from defaulting. A proposal for a Europe-wide solution to the crisis is expected before a summit meeting of European Union leaders on Dec. 9.

Concerns about the European crisis hung over a meeting Monday at the White House between President Barack Obama and three European leaders: José Manuel Barroso, the president of the European Commission; Catherine Ashton, the European foreign policy chief; and Herman Van Rompuy, the president of the European Council.

Those concerns also surfaced during a White House news briefing, when a questioner asked the press secretary, Jay Carney, whether the White House shared the view that “the euro is in a particularly perilous state, perhaps poised to collapse within days.”

Without going that far, Mr. Carney replied that “our position is and has been that it’s critical for Europe to move with force and decisiveness now, particularly with new governments coming into place in Italy, Greece and Spain.”

He added: “We continue to believe that this is a European issue, that Europe has the resources and capacity to deal with it and that they need to act decisively and conclusively to resolve this problem.”

In Brussels, European officials rejected suggestions that the euro was days away from breaking up, pointing out that countries have completed most of their bond issuance for this year, though they know the respite will only be a matter of weeks.

Belgium had to pay higher interest rates to borrow money in the markets on Monday, illustrating how the country’s failure to form a government has increased concerns about its ability to tackle its debts. The yield on 10-year bonds was 5.66 percent as opposed to 4.37 percent last month.

Concern also mounted regarding Italy, where borrowing rates skyrocketed at a bond auction Monday for the second consecutive business day. The interest rate Italy had to pay to get investors to part with their cash for 12-year issues soared to 7.20 percent, a full 2.7 percentage points higher than the previous similar auction.

There was alarm in several capitals Monday over French-German plans to create strict new budget rules for countries that use the common currency — something seen in Berlin as a precondition of further steps to save the euro zone.

On Sunday, France, Germany and Italy signaled they were ready to agree on new rules to enforce budget discipline in the euro zone, and to encourage more coordination of economic and fiscal policy.

On Monday the German Finance Ministry published comments from the finance minister, Wolfgang Schäuble, suggesting that this could be done by amending a protocol of the E.U. treaty, though officials said this would still need approval by all 27 E.U. members.

Article source: http://www.nytimes.com/2011/11/29/business/global/moodys-warns-of-escalating-dangers-from-europes-debt-crisis.html?partner=rss&emc=rss

The Branding of the Occupy Movement

But he did brand it.

Last summer, as uprisings shook the Middle East and much of the world economy struggled, Mr. Lasn and several colleagues at the small magazine felt the moment was ripe to tap simmering frustration on the American political left.

On July 13, he and his colleagues created a new hash tag on Twitter: #OCCUPYWALLSTREET. They made a poster showing a ballerina dancing on the back of the muscular sculptured bull near Wall Street in Manhattan.

For some people they were just words and images. For Mr. Lasn, they were tools to begin remodeling the “mental environment,” to create a new “meme,” the term coined by the evolutionary biologist Richard Dawkins for a kind of transcendent cultural message.

“There’s a number of ways to wage a meme war,” Mr. Lasn, whose name is pronounced KAL-luh LAS-en, said in an interview. “I believe that one of the most powerful things of all is aesthetics.”

Mr. Lasn, who helped found Adbusters in 1989, had spent much of his career skewering corporate America, creating “subvertising” campaigns like “Joe Chemo,” which deftly mocked the Joe Camel cigarette ads of the 1990s.

But the spread of the Occupy protests signals a substantial step up for the magazine and Mr. Lasn, who is 69. The protests, he hopes, will “somehow change the power balance and make the world into a much more grass-roots, bottom-up kind of a place rather than the top-down Wall Street mega-corporate-driven system we now have.”

“This,” he added, “is the kind of dream many Occupiers have.”

Mr. Lasn was born in Estonia but his family fled near the end of World War II, when he was 2. His family lived in refugee camps in Europe before moving to Australia. He worked for several years for the Australian defense department, before moving to Japan and shifting to advertising.

By the 1970s, he had landed in Vancouver, disenchanted with what he felt was the moral detachment of the advertising industry. After working as a documentary filmmaker — and butting heads with the Canadian government and media over logging practices in old-growth forests — he founded Adbusters in 1989.

The magazine, which is owned by the nonprofit Adbusters Media Foundation, is published out of the basement of a house south of downtown and claims a circulation of about 70,000, mostly from newsstand sales outside of Canada. It has had prominent writers, among them Christopher Hedges and Bill McKibben.

But with its vivid artwork and photography, snippets of poetry and glossy fake ads with slogans like “Everything is fine, keep shopping,” Adbusters feels less like a manifesto than an evocative brochure, for $8.95 an issue.

“It’s an art object,” said Deborah Campbell, a former associate editor. “When you look at art it speaks to you in different ways, and some of it is intellectual and some of it is provocative and some of it is a sense or a feeling.”

Before Occupy Wall Street, Adbusters had many smaller campaigns, including “Buy Nothing Day.” For years it has sold Blackspot shoes, made in an “antisweatshop’ facility in Pakistan. Mr. Lasn has written books, including “Culture Jam: How to Reverse America’s Suicidal Consumer Binge — and Why We Must.”

It has struck some people as strange that a Canadian magazine helped start the Occupy movement, but Adbusters is only based in Canada, not focused on it.

“Everybody knows it’s here but it’s not a local magazine,” said David Beers, the editor of The Tyee, an online news Web site based here. “He isn’t a local figure. It’s not like he’s on the morning radio. You never hear about the guy unless he’s in a fight with someone.”

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