EU’s Barroso hints at direct support for European banks. LOS CABOS, Mexico: The president of the European Commission suggested on Monday that a way needed to be found to provide direct support to Europe's banks rather than lending to governments so they can recapitalise distressed lenders. Speaking ahead of a summit of the Group of 20 industrialised and developing countries, Jose Manuel Barroso (pic) said the link between highly indebted governments and bad banks needed to be broken, and suggested Spain could be a starting point, although it remains legally difficult to do it immediately. The eurozone agreed on June 9 to provide up to 100 billion euros (US$125bil) to Madrid to recapitalise its banks, with the aid going to the government's bank rescue fund.
That means the loans will accrue to Spain's sovereign debt, worsening its debt-to-gross domestic product ratio and increasing its financing costs. Economic and Financial Affairs. Latvia: fifth Post-Programme Surveillance mission The assessment of post-programme developments is mixed. Latvia enjoys fast GDP growth rates and the outlook for 2014 and 2015 is overall encouraging, but some problems remain to be addressed with a greater sense of urgency. A smooth euro changeover in Latvia The European Commission today adopted a report on the introduction of the euro in Latvia.
The report draws some useful conclusions for future changeovers in other Member States. Spain: results of first post-programme surveillance mission The Commission and the ECB concluded that the positive trends of policy progress, ongoing economic adjustment and diminishing financial stress have continued. Important challenges to sustained economic and employment growth, public finances and the banking sector still remain.
The Economic Situation, June 2012. Latest Readings on a Throttled Economy The Great Recession ended in June 2009. But like Lazarus of old, the recession seems to be rattling out of the grave. Consider the most recent headline data on the economy. The second reading on first quarter GDP growth came in at 1.9%, down more than a tad from the 2.2% first reported. Then there’s the second round of the European debt crisis, with questions as to whether the latest trouble will bring down U.S. growth. Shortly after getting the weak GDP growth numbers, we received yet another pitiful reading on employment growth. To top it all off, the Institute for Supply Management delivered bad news on the manufacturing economy.
Europe’s Trouble and U.S. Europe’s economic problems have already given a light haircut to U.S. But all else will not be equal. The Developing World is still Pumping Iron The developing world is the new engine. Consider export data for a sample of Southeastern states shown in the next chart. We have a muffled economy. European economy | Economist - World News, Politics, Economics, Business & Finance. Commission sets out the next steps for stability, growth and jobs. European Commission - Press release Commission sets out the next steps for stability, growth and jobs Brussels, 30 May 2012 – The European Commission has adopted a package of recommendations for budgetary measures and economic reforms to enhance financial stability, boost growth and create employment across the EU. The recommendations are country-specific, taking account of the individual situation of each Member State.
The Commission has also issued recommendations for the euro area as a whole, and set out its vision for the EU-level policy action needed to complement the national measures to deliver an ambitious, two-tiered EU growth initiative. President Barroso said: "Today the Commission has taken important decisions that set out the further action that needs to be taken both at national level by each of our Member States and at the EU level to enhance our competitiveness, boost growth and jobs, and to strengthen decisively our economic and monetary union. Content of today's package. EU economic situation. What really caused the eurozone crisis?