Tag: European

  • European shares dip from seven-year highs, China rate cut lifts Asia

    European shares have slipped from seven-year highs, weighed down by merger activity in the telecoms sector, while Asian stocks edged up after China cut interest rates at the weekend.

    The dollar hit an 11-year high against a basket of currencies on growing prospects of a rise in United States (US) interest rates from the US Federal Reserve, before giving up the gains as economic data lifted the euro.

    US stocks looked to be headed for a steady open, according to index futures SPc1.

    The pan-European FTSEurofirst 300 stocks index .FTEU3 edged up at the open but lost steam and was last down 0.4 percent.

    French media group Vivendi (VIV.PA) said on Friday it had agreed to sell its remaining stake in the telecoms company Numericable-SFR (NUME.PA) to Altice (ATCE.AS), whose shares were up 6.5 percent.

    But falls of five percent in Vivendi and seven percent in Greek banks .FTATBNK pressured the market and outweighed any beneficial impact of broadly upbeat euro zone data.

    German manufacturing activity expanded further in February as new orders rose, according to Markit’s final purchasing managers’ index (PMI) for the month. Italy’s Markit/ADACI PMI showed the first expansion in activity for five months, but French activity slowed further in February.

    However, the numbers buoyed up the euro, which reversed early losses to trade up 0.3 percent at $1.1288.

    “This could well be coming from the data this morning, but any rebounds at this point will be quite limited,” said Ian Stannard, head of European FX strategy with Morgan Stanley in London.

    Against a basket of currencies, the dollar hit a peak not seen since September 2003 .DXY before retreating. It was last down 0.2 percent on the day. The dollar was up 0.2 percent at 119.72 yen.

    China, which posted its slowest growth in decades in 2014, cut its benchmark lending and deposit rates.

    A survey showed China’s HSBC/Markit PMI had climbed to 50.7 in February – its strongest since July – from 49.7 in January. An official survey released on Sunday showed the factory sector had contracted for a second straight month in February.

    The rate cut helped push Australian shares .AXJO 0.5 percent higher as shares in resources companies, which have prospered on the back of Chinese demand, rose. The Shanghai Composite Index. SSEC closed up 0.8 percent

    The impact in the rest of Asia was muted. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.2 percent. Tokyo’s Nikkei .N225 closed up 0.2 percent as the yen lost ground against the dollar.

  • ECB seeks  European  capital markets’ union

    ECB seeks European capital markets’ union

    European Central Bank (ECB) policymaker Yves Mersch has called for the euro zone to pursue deeper integration, including a capital markets union that would enable a company in one country to issue a bond in another.

    Describing Europe’s Monetary Union as incomplete, Mersch said it would be wrong to sit back and leave the project in its existing form. Rather, developing the union “is a permanent undertaking,” he said.

    Mersch spoke three days after the ECB agreed a new bond-buying plan that will see chiefly national central banks purchasing bonds and taking on the risk of default. The deal has raised questions about whether ECB policy is still ‘single’ across the euro zone.

    Mersch, who sits on the six-member Executive Board that forms the nucleus of the ECB’s policymaking Governing Council, said capital-market integration would help spread risk across the currency union through the private sector.

    “A truly integrated capital market would not only benefit the European economy because it would ensure an efficient and location-independent allocation of financial resources. It would also bring with it a greater distribution of risk,” he said.

    Spreading risk means that financial markets within a monetary union should actually function independently of national borders,” he added, according to the text of a speech for delivery in Osnabrueck, Germany.

    “Economic shocks can then be better absorbed because countries receive a certain amount of protection from the private sector.”

    Noting that a cross-border securities transaction costs at least 10 times as much in Europe as in the United States, Mersch called for harmonised regulation for securities in Europe and a harmonised legal framework for crisis management.

    Mersch quoted former German chancellor Helmut Kohl as saying in 1992 that the Maastricht Treaty on European integration would lead to a United States of Europe, and concluded his speech by saying: “It is time that this affirmation resulted in action.”

  • Firm misses estimates as European woes hurt profit

    Firm misses estimates as European woes hurt profit

    Holcim Ltd. (HOLN), which is merging with Lafarge SA (LG) to form the world’s largest cement maker, missed analysts’ estimates for profit and revenue as sluggish European demand and currencies effects in Latin America hurt business.

    Net income declined by 4.7 per cent to 447 million Swiss francs ($463 million) in the third quarter, missing the 452.5 million-franc analysts’ estimate. Sales of 5.2 billion francs also lagged behind analysts’ predictions.

    The profit decline highlights the need for the two cement makers to cut costs and reduce their exposure to the troubled European economy. Their $40 billion merger will couple Lafarge’s African cement plants with Holcim’s Asian assets, two regions where building is expected to boom over the next decades.

    “Europe’s economic recovery slowed down in the course of the first nine months of this year, with lower than expected growth in major economies such as Germany and France and the Ukraine crisis contributed to challenging conditions,” the company said. Its Chief Executive Officer, Bernard Fontana said the company also felt the impact of “weak emerging market currencies,” especially in Asia Pacific and Latin America.

    Holcim shares fell as much as 2.8 per cent and were down by 2.6 per cent in Zurich, valuing the company at 21.7 billion Swiss francs.

    Meanwhile,cement volumes won’t increase in Europe this year, the Jona, Switzerland-based company said. Holcim had earlier expected an increase and reiterated targets of organic growth in operating profit and a further expansion in margins in 2014. A cost-cutting plan begun by Fontana in 2012 had contributed about 200 million francs more to operating profit than originally planned by the end of the third quarter.

    Holcim and Lafarge will sell units to make sure regulators approve the planned merger. In Europe, where the largest part of cement and crushed rock divestments will take place, regulators have set a Dec. 15 deadline to either approve the deal or open a deeper investigation.

  • Global Economy: Seeking European signs of sturdier global rebound

    Atentative view that the global economy is emerging from its lull could harden into conventional wisdom by the end of this week if, as expected, data show the euro zone’s lengthy recession has ended.

    While Europe is still the world’s biggest trading region, some of its recent major exports – financial market panic, banking scares and political uncertainty – have dragged on the world economy over the last three years.

    There are now signs of a nascent recovery, led by Germany and perhaps Britain.

    Wednesday’s data are expected to show the euro zone economy grew 0.2 percent in the second quarter, according to a Reuters poll. That would mark an end to the recession that took hold in late 2011.

    That won’t change the U.S. position as the main engine of economic growth in the world, at least until next year, with Chinese growth still slowing and India wracked by a currency in free-fall.

    But even the smallest sign of a recovery in Europe augurs well for the rest of the year.

    “Add it all up, and it’s a more positive picture for the global economy late this year and next,” Mark Zandi, chief economist at Moody’s Analytics, said.

    “It feels like the global economy is stabilizing, and by year’s end, certainly as we move into next year, growth will be accelerating, led by the U.S.”

    “But I also anticipate some growth out of Europe and stable growth out of the emerging world.”

    Business surveys last week supported that view as companies in the United States and Britain prospered, while there were signs Chinese firms might have passed the worst of their mid-year lull.

    In the past, however, similar indications of global recovery have emerged, only for that recovery to be trampled.

    Europe’s major economies showed signs of improvement in early 2011, even while the sovereign debt crisis in the euro zone was worsening.

    Two interest rate hikes from the European Central Bank midway through the year led to a chokehold on credit, especially in southern Europe, and turned the risk of another euro zone recession into an inevitability.

    Guide to the furture

    Central bank policymakers are determined not to repeat that mistake, as evidenced by the adoption of forward guidance at the Bank of England and European Central Bank.

    Minutes from the BoE’s August meeting on Wednesday will shed more light on Governor Mark Carney’s plan to link its policymaking to an unemployment rate threshold of 7 percent, subject to caveats on inflation and financial stability.

     

     

    “Much like the ECB, the BoE is worried about the effect of tighter global financial conditions on the fragile recovery taking root in its jurisdiction,” said Gustavo Reis, global economist with Bank of America-Merrill Lynch.

    “With the Federal Reserve likely to start reducing the pace of asset purchases this year, European forward guidance aims to anchor market expectations and mitigate the impact of negative policy spillovers.”

    There are risks to forward guidance, too.

    In June, U.S. Fed Chairman Ben Bernanke signaled the Fed was thinking about easing off the pace of its monetary stimulus later in the year.

    That talk prompted a reaction in financial markets that really amounted to an unexpected de facto monetary tightening, with government bond yields rising and the dollar rising sharply in the second half of June.

    Fed officials have been more careful in their language since then.

    That won’t be lost on ECB President Mario Draghi, who has refused to elaborate on his guidance that the bank intends to keep interest rates low “for an extended period of time”.

    Zandi from Moody’s Analytics said that forward guidance will prove critical in allowing the European recovery to take hold.

    “I think the BoE did the right thing in adopting unemployment thresholds similar to the Fed’s thresholds, and I think the ECB eventually will get there,” he said.

    “I think it’s difficult for Draghi to go down the path Carney has, but he’ll go down the path – it’ll just take him longer to get there.”

  • Omeruo targets European football

    Omeruo targets European football

    Dutch club ADO Den Haag are targeting European football next season, Nigeria international defender Kenneth Omeruo has said.

    With 36 points from 29 games, only one point separate ADO from a Europa League play-off spot.

    ”The fans of ADO Den Haag have high expectations of their club and we will not disappoint them. They hope we get European football and I think we’re going to do that.

    ”The final of the competition is very exciting. All the clubs where we still have to play against have different interests. Some clubs have the chance to become a champion or should do everything possible to avoid the relegation playoffs,” Omeruo was quoted as saying by soccernews.nl.

    19 – year – old Omeruo has suited up 23 times for ADO Den Haag in the Dutch championship. He has not been cautioned in his last 10 games.

  • After Ratzinger, enough with the old European Popes!

    He was supposed to be ‘God’s Rottweiler.’ In Newsweek, A.N. Wilson looks at the paradox of Benedict XVI. 

    My wife exclaimed, when she heard of the pope’s surprise announcement to retire: “It’s bad enough having one old man thinking he’s infallible—now there’ll be two of them!” Our conversation went on to imagine the election of yet another octogenarian, who might well in turn resign before the demise of Benedict. Pretty soon, the Vatican could fill up with retired infallible old men, most of them Italian, all nodding in front of the daytime television in the geriatric wing, and all—all—infallible.

    My guess is that this time, they won’t go for yet another ancient European, and they will plump for a cardinal either from Africa or South America. Cardinal Peter Turkson of Ghana would be good. Another possibility is Cardinal Francis Arinze of Nigeria—an arch-conservative who makes Ratzinger seem like a wishy-washy Anglican. (Which in many ways he is!)

    But my money is on Cardinal Leonardo Sandri of Argentina. At 70, he is the ideal age—with 10 years, at least, before he joins the other infallibles in the dayroom. Additionally, he has the great advantage of being, at present, in charge of the Vatican’s relationship with the Eastern churches—and it is surely the moment in history to reunite Rome with the Orthodox. And he is also a voice of South America—and that must be heard. Europe and North America have grown deaf to the faith, and the church needs someone from elsewhere to nourish the flame once more.

    Whatever happens, for a pope who was elected on the traditionalist ticket, it was a curious thing to retire. Popes just don’t retire. And then he did. Ever since his moment of truth in 1968, when the rioting students of Tübingen converted the liberal-minded Joseph Ratzinger into the Enemy of the Enlightenment and Defender of Catholic Reaction, this has been a man—surely—who wanted to revert to the way things were in the good old days, back in … er … when exactly?

    That has always been the problem for “traditionalists” or “conservatives” in any sphere of life—church, politics, family life. How far do you want to go back? At what point, exactly, did things begin to go wrong?

    Appointed as John Paul II’s righthand man, Ratzinger was the Nasty Cop, engaged to wage war on the liberals. But in point of fact, he was always a much subtler figure than his enemies—or, more dangerously—his fans believed. Almost the first thing he said to the English Archbishop Cormac Murphy-O’Connor was: “When are we going to make Newman a saint?”

    John Henry Newman, the 19th-century convert from Anglicanism, in 1845 wrote a world-changing book—literally—called The Development of Christian Doctrine. In it, he posited that nothing stays the same; everything is in a state of flux and development. He popularized the Hegelian view of the world for English speakers, and thereby prepared the world for Darwin and modern political democracy. But it took a while for the church—in the Second Vatican Council—to catch up. Ratzinger, behind the old-fashioned vestments, and the occasional sharp message to American or German liberal theologians, has always in fact been a Newman Catholic, aware that the church, for all its historic roots in the world of late classical antiquity, is ever changing, ever new.

    Dante Alighieri, not a poet who minced his words about popes, had no hesitation in sending to hell the only pope who had resigned in his lifetime. True, he did not put the resigning pope in the very pits of hell with those who sell political office, or who betray their country or their friends. But there he is, cowering on the borders of hell at the very beginning of the Inferno. “And then I saw—and knew beyond all doubt—the shadow of the one who made, from cowardice, the great refusal”—che fece per viltade il gran rifiuto.

    They are tough words, especially if we take them to refer to a man whom the Catholic Church venerates not merely as a holy pope but as a saint: Saint Celestine V.

    No one would compare Benedict XVI, a highly intelligent and articulate man, with the poor hermit peasant-friar who was chosen as a compromise candidate for the papacy in 1293. Unable to make up their minds between rival French and Italian rascals, the College of Cardinals—only 12 men in those days, dithered for 27 months! Eventually, someone had the idea of appointing a saint to the Holy See. Poor, illiterate Padre Pietro was an 85-year-old hermit living in a little grotto on a mountainside in the region of Naples. He accepted the papal office, but was terrified by it, and after only a few months begged to be allowed back to his cell. The cardinals accepted his choice. He was canonized relatively quickly, in 1313, less than 20 years after his death. Modern scientists examining his skull found the unmistakable traces of a nail having been driven into the poor old man’s head, so he was evidently murdered, and in all likelihood, it was his suave lawyer-successor, Boniface VIII—Dante’s bête noire—who arranged the murder.

    It was an unedifying episode in medieval history, and we would probably not know much about it if Boniface VIII had not, in addition to murdering his predecessor, sent Dante into exile from his native Florence. Boniface thereby made himself into one of the villains of world literature, and all of Dante’s hatred was poured out on the pope’s head.

    There is matter for meditation here. Celestine V was a holy and good man, but a very bad pope. Boniface, if only half the things his enemies said about him were true, was far from a good man. But he was a brilliant pope who rescued the Western church (for a time) from some of the worst crises in its history: the breakup of Christendom itself being the worst, with the Eastern Orthodox churches going it alone, while the Western church was riven with schism. Add to that the European wars and the ever-present threat of Islam in Spain and in Eastern Europe.

    Benedict XVI is neither a holy hermit nor a criminal. But he is a paradox. Before he became pope, he was the white hope of the arch-conservatives in the church—”God’s Rottweiler”—the man who was going to send the liberals howling to their lairs while the universal church once again reasserted the old ways.

    And in some ways, it looked very much as if this was what Benedict set out to do when he was first elected. He wore a variety of extremely old-fashioned vestments—the little red cap trimmed with white fur bearing more than a passing resemblance to that of Father Christmas—and those scarlet loafers made by Prada. He brought in from the cold the ultraright conservatives who followed Archbishop Lefebvre. (But he failed to do a name check with all of them, and found himself acknowledging as a bishop an English oddball called Richard Williamson, who was a Holocaust denier.) He restored the old Tridentine Mass, for those who wished to use it—a semi-cynical move, since how many priests are left who know how to perform the old rite?

    But also, from the very first, he revealed a surprising intellectual flexibility. The very first address he made to the cardinals, just after his election, was a remarkable piece of prose for anyone to have written—but even more for a German Catholic. For a German pope, it was actually astounding, for he acknowledged that Martin Luther, father of the Reformation, had in effect been right, and that Christians are saved not by the mere performance of religious observances but by faith in Christ. His first encyclical, “God Is Love” (“Deus Caritas Est”), followed up the theme with an exaltation of love in all its human forms. It contained none of the usual carping papal denunciations of gays or divorced people. It was a simple celebration of love—as simple as Dumbledore’s when he tells Harry Potter that he had been saved by “love, Harry, love.”

    Oh, yes. Harry Potter. That too. When a sour-faced old Austrian Catholic schoolmarm went to the boring trouble to write a book denouncing Harry Potter as encouraging magic and the black arts, Benedict carelessly endorsed her thesis. But when it was pointed out to him that, as a matter of fact, J.K. Rowling was on the side of the angels, he was gracious enough to withdraw his denunciation.

    In other words, Joseph the Unbudgeable, Ratzinger the Ironclad Bismarck of Church Politics, transmogrified into a gentle, unpredictable, accident-prone old pope, more absent-minded professor than Grand Inquisitor.

    Continued on Page 68