Business & Financial News

The Belgian economy has resumed growth in the first quarter and was not in recession in the second half of 2011 contrary to what was originally advertised, showed particular are released Wednesday.

The Gross Domestic Product (GDP) grew 0.3% over the first three months of the year compared to last quarter. In annual terms, sales rose 0.5%, announced the Belgian central bank.

In the fourth quarter of 2011, the Belgian economy shrank by 0.1%.

However, the central bank has revised its figures for the third quarter GDP, from -0.1% initially announced, to no growth (0.0%).

This means that Belgium did not ultimately experienced a recession, defined as "technical" recession establishes that at least two consecutive quarters of GDP contraction.

In 2011, Belgium recorded an annual growth of 2%, against an initial estimate of 1.9%.

GDP figures for the euro area for the first quarter will be published May 15, along with those of Germany, France, Italy and the Netherlands. 

In the fourth quarter of 2011, the GDP of the eurozone declined by 0.3%.

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India has formally followed the lead of China Thursday asking its airlines to refuse to participate in the program of the European Union to tax carbon emissions in the air transport, confirming what was said a senior Indian official told Reuters.

"While the European Union ordered the Indian carriers to submit the details of their aircraft emissions by 31 March, no company due to the fact the government's position" , said Ajit Singh, Minister of Civil Aviation.

"Therefore, the imposition of a carbon tax is not an issue," he said in a letter.

The European Commission was not immediately available for comment information. 

The opposition of India in the exchange system of emission quotas for greenhouse gas (ETS) could jeopardize the chances of New Delhi to reach an agreement, being born in ; negotiation, free trade with Brussels.

China first allowed its air transport sector to participate in this program.

Since 1 January, all airlines flying from airports in the EU are subject to a trading system of emission quotas for greenhouse gas (ETS).

A company failing to observe these rules is liable to a tax of 100 euros per tonne of carbon emitted quota allowed. The EU ban of up to serve European airports.

China has suspended the purchase of Airbus representing $ 14 billion because of the dispute with Brussels over the carbon tax. India is also a major customer of Airbus.

Airbus officials, airlines and European engine wrote last week in the Old Continent's political leaders urging them to resolve the dispute caused by the introduction of this carbon tax.

Boeing has supported Airbus in this matter, despite the bitter legal battle being waged for years the two aircraft manufacturers about the legality of state aid received to develop their planes. 

"It is no Airbus and Boeing, this is what is most beneficial to our customers and how the industry as a whole can reduce its carbon footprint," said ; Reuters Jim Albaugh, CEO of the Civil Aviation Division of the U.S. group.

"In my opinion, the European ETS is not the right approach. It must be suspended and we must work with the ICAO (aviation agency of the United Nations) to establish regu international rules that everyone can see. "

MEPs have just voted a bill to ban the diversion of assets in the event of bankruptcy. Hours before his bankruptcy, the French refinery had emptied its accounts. .

The National Assembly passed in the night from Tuesday to Wednesday UMP text to prevent the diversion of assets of a failing company and for Petroplus, with the support of the PS who tried in vain to pass as its own proposals ArcelorMittal targeting. The bill passed almost unanimously (only the communists abstained), and pass Thursday before the Senate, was filed by the UMP deputies of Seine-Maritime, where the Petroplus refinery in Petit Couronne ( 550 employees), in bankruptcy since late January.  

The refinery has "seen its accounts in France emptied of all its cash by the banks of its parent company just hours before the bankruptcy filing," recalled Frances Guégot, lead author of the text. This allows the court to take trade measures (seizure of assets or sale of stocks, for example) of a company, not only at the stage of liquidation as at present, but also upstream, when the power is backup or receivership. Its urgent nomination to the agenda had been an agreement between Prime Minister Francois Fillon and his Socialist predecessor at Matignon, Laurent Fabius, Member of Parliament of Petit Couronne. A fact underlined by the Industry Minister, Eric Besson, who came into the chamber to support the text along with his colleagues Michel Mercier (Justice), Patrick Ollier (Relations with Parliament) and Xavier Bertrand (Labour).

As the minister, Laurent Fabius has paid tribute to the Inter Petroplus, whose representatives attended the debates. But, while approving the bill, he criticized the government for "lack of vigilance" on successive Petroplus, especially during the sale of the refinery in 2008 by Shell. He regretted that Nicolas Sarkozy has announced a "temporary respite" for the refinery during his visit last Friday at Petit Couronne.

Holland rejected the proposal

Left and right agreed on an amendment providing information to staff representatives on the measures. The majority is also committed to respect for social obligations of a bankrupt company, but in terms considered ambiguous by the opposition, particularly the Communist Party, which abstained for that. The Senate, leftist majority should approve the text Thursday.

But this relative consensus has given way to confrontation when the socialists have defended in vain amendments, drawing another bill filed that morning. It was announced Friday by Francois Hollande during his visit to the site of ArcelorMittal Florange (5,000 employees), two blast furnaces are shut down for months. The PS proposed to require a manufacturer withdrawing from a French plant to transfer her to a buyer. "ArcelorMittal has a clear strategy of disengagement from the territory and we must respond," insisted the MP PS Moselle Aurélie Filippetti.

In the wake of Nicolas Sarkozy, who said Monday "does not see the benefit of this proposal" and promised another solution soon, the majority rejected these amendments, the government said, "would undermine the freedom of and undertake to ownership ". The left has once again criticized the head of state to have announced, in February 2008 on the site near Gandhinagar, public investment to maintain the activity, one year before the plant would close anyway.

UniCredit announced Monday a capital increase of EUR 7.5 billion, having unveiled a heavy loss in the third quarter.

Italy's largest bank reported a net loss of 10.641 billion euros, depreciation included in the third quarter.

Its impairment of goodwill stand at 9.6 billion.

Its capital adequacy ratio stood at 8.74% hard at the end of September.

UniCredit said that after the issuance of securities, expected to close in the first quarter of 2012, core tier 1 ratio will increase to 10.35% according to Basel II banking standards.

European stock markets have reduced their initial losses Thursday mid-morning, investors hope that Greece renounces its proposed referendum on the European aid plan for the country while Angela Merkel and Nicolas Sarkozy launched an ultimatum Wednesday night Athens ordered to implement the overall European level or risk not receiving any help.

At 10:31, the CAC 40 index yields 0.12% after briefly gained 0.3%. The benchmark index of the Paris lost up to 2.6% in early trade.

The London Stock Exchange gained 0.05%, while Frankfurt was down 0.25% and pan-European Euro Stoxx 50 index drops 0.43%.

The Irish budget deficit has reduced by 4 percentage points of GDP since 2009. Corporate profitability recovered sharply. But deleveraging too fast may influence the activity against becoming productive. Pedestrians in Dublin

If Ireland is still part of PIGS, it can not be in the same category as Greece or Portugal, as progress in a few months by former Tiger European are important. The Irish budget deficit – excluding bank recapitalization needs – fell by 4 percentage points of GDP since 2009. The current account deficit turned into a small surplus. Finally, corporate profitability recovered sharply.

The experts of the International Monetary Fund (IMF) of the European Central Bank (ECB) and European Commission, who have just completed their assessment mission in Ireland, are seduced. "The ongoing adjustment is solid.The 2011 budget targets will be achieved and the ongoing structural reforms will also contribute to sanitation, "they note in their report.

However, Ireland is now entering a delicate phase. Or the risk of too rapid deleveraging weigh on activity, against becoming productive. The experts of the IMF, the ECB and the Commission to admit the hint. "Ireland will have to find a balance between the imperatives of debt reduction and limitation of the barriers to growth and job creation," they point out in their report. This sentence harmless and a bit blurry could announce a change in strategy for Ireland. The country needs it, says a recent report by Goodbody Broker.

Make concessions

Indeed, in Ireland, over-indebtedness affects both the public sector, private sector and banks.Simultaneously reducing the three is clearly a bad idea, says the report. If Ireland is determined to meet all objectives at the same time, the evolving recovery will be quickly suppressed. A risk highlighted recently by the Finance Minister Michael Noonan. Especially since the motor only turns in exports. The domestic market remains depressed by lower prices (unit labor costs fell by 15% and commercial property prices have been divided by two).

We must therefore make concessions to one side. But which one? As for households, the government can not do much. The debt reached 220% of disposable income, nearly twice the international average. And fall of financial markets could reduce household net wealth of 250 billion euros. The Irish are going to have to tighten their belts for several years.Make concessions on the public debt is also not in a financial crisis. Ireland recorded a primary deficit of 6% of GDP in 2011. This is the worst result of the euro area.

Remaining banks. They must bring their ratios to 122% loan to deposit by 2013. The challenge today is to allow banks to achieve that clean without excessively penalizing the credit. This will doubtless involve additional time but also further aid from the ECB, economists now believe. Lengthy discussion in perspective.

Wall Street opened in fall Monday after two weeks of gains, weighed down by a statement by the German Finance Minister Wolfgang Schäuble that the next EU summit will not produce a definitive solution to the debt crisis.

In early trade, the Dow yielded 0.59% (56 points) at 11,575 points.The Standard & Poor's, wider, fell by 0.62% (7.5 points) to 1217 points while the Nasdaq composite lost 0.64% (17 points) in 2650.

Germany warned Monday against the dream "unrealistic" to see the European Summit of 23 October Sunday settle the debt crisis in the euro area, keeping the pressure on banks to grant a discount over important Greek debt.

Wall Street was completed Friday a second consecutive week of gains, seeing the S & P 500 gaining over 8% on the hope of curbing the euro area's debt crisis and the global economy avoid a recession.

But a barometer of manufacturing activity in New York Monday revived fears about the U.S. economy.

The Empire State index of the Federal Reserve of New York stood at -8.48 in October, its fifth consecutive month in negative territory, while the market expected a slightly less marked contraction (-4.00) from -8.82 in September.

Industrial production has in turn increased by 0.2% in September, as expected, the manufacturing sector offsetting a decline in the utilities.

Citigroup gained 1.2% at the opening after reporting a profit increase in the third quarter.The bank has indeed had to be provisioned are less clear for its losses from toxic assets, while benefiting from an accounting gain that banks can reap when financial markets are turbulent.

Wells Fargo lost 5.6% after posting a profit rise in third quarter but have just missed the consensus of analysts.

An official with the International Monetary Fund said Wednesday that if any institution could buy bonds Spanish and Italian, along with the European Financial Stability Fund (EFSF) prior to distance himself a little later with this idea.

Antonio Borges, Director of the IMF's European Department, said at a news conference that the IMF "might even invest with the European Financial Stability Facility (EFSF).We would definitely ready to play this role. "

Greater involvement of the IMF in attempts to resolve the debt crisis in the euro area could reassure some investors who feel it is out of control.

"The investments we would do in Spain or Italy would be based on the certainty that these countries are on track, they are solvent and to take all necessary measures," said Antonio Borges.

"Because the EFSF now has the opportunity to invest in secondary markets, we could invest with him, to support the debt markets in Italy and Spain with an additional element of credibility," he said.

Later, Antonio Borges, issued a statement saying he wanted to "clarify some comments earlier held" by saying that the IMF could act directly on the bond markets.

"The IMF can only offer our resources to countries, it can not be used to intervene directly in the bond markets. We do no involvement in the market with the EFSF," said he.

The EFSF, with 440 billion euros, is seen as not sufficiently abundant in case of worsening of the crisis.And European officials are already thinking about increasing its response capacity through leverage.

ECB must remain active in the bond market-BORGES

At the press conference before his release correcting his remarks, Antonio Borges had said he wanted to wait for the ratification of the new powers of EFSF before further action by the IMF.

The IMF could go further and invest directly in bonds in Italy and Spain and for this he will have to create an investment vehicle specific, had said Antonio Borges.

He also felt that the European Central Bank should remain active in the bond market to help stabilize it, even after strengthening the powers of the European Financial Stability Fund, the EFSF.

ECB buys government bonds Spain and Italy on the secondary market since August to prevent the cost of borrowing in these countries do not rise to prohibitive levels.

The ECB considers that this action is somehow an extension of its monetary policy decisions.But many economists believe the central bank in the euro zone will no longer intervene in the market when the EFSF will feature its new powers including the purchase of debt on the secondary market.

"The ECB has a very important role to play in restoring market stability in Europe," said the director of the IMF's European department, Antonio Borges, at a press conference. "It is not possible to have a monetary union with the debt markets of extraordinary instability, as is the case today."

It is not, says the IMF, the spendthrifts save states, but to smooth out market fluctuations."A steady market intervention to stabilize the conditions would be most appropriate," said Antonio Borges.

Governments in the euro area might consider a way to make such operations more acceptable to the ECB, whose statutes forbid it to fund government.

"If that means give the ECB some degree of support from finance ministries across Europe, in order to provide additional comfort to make it easier, we would certainly very happy to see that happen, "said Antonio Borges.

"There are several ways to do so. This could simply be guaranteed by several ministries of finance, this could be the EFSF, there are many possibilities.The most important thing is to make it easier for the ECB to stabilize a presence in the markets, "he added.

The pessimistic comments by the Fed on the U.S. economy were right the last hopes of the market. Paris loses about 5% as other European markets, the euro and oil fall as well.

Financial markets no longer know where to turn. They awaited the Fed's effective measures to stimulate activity, they have mostly kept very pessimistic comments on the U.S. economy. And as concerns over the health of European banks are still there, the world's stock markets have performed a new dive on Thursday.

After opening sharply lower, European stock markets accentuated their losses by mid-afternoon. The Paris Bourse and yielded 4.57%, Frankfurt 3.77%, 4.70% London, Milan and Madrid 3.70% 4.40%. At the opening of the New York Stock Exchange, the Dow Jones lost 1.45% and the Nasdaq 2.85%..

Bank stocks, especially French, were the first victims of this new access of depression. Societe Generale, Credit Agricole and Natixis were down more than 7%. BNP Paribas, some limited damage to -3.3%. Alarmist comments by an officer of the influential American fund Pimco, saying that French banks could tip the whole of Europe into recession, came to power concerns.

Equity markets are not the only ones suffering. Direct result of growth at half mast, and thus reduced demand, oil prices plunged more than 5% in New York, returning to their lowest levels in a month. A barrel of "light sweet crude" for November delivery traded at 80.91 dollars.

On the foreign exchange market, the euro has meanwhile fallen below $ 1.35. It especially touched its lowest level for ten years against the yen.

Main accused of helping the new blues, the U.S. central bank. "The Fed, instead of reassuring the markets, instead encouraged the weak operators and increased their aversion to assets considered risky," explained Jane Foley, analyst at Rabobank.

As expected, it has announced the launch of Operation Twist, which will be for sale by the end of June 2012 for $ 400 billion of treasury bills in order to redeem an equivalent amount with a longer maturity. The stated objective is to lower interest rates over time. Problem, the effectiveness of the measure is highly controversial because these rates are already low. Its impact on business would not be obvious.

Unconvincing in action, the Fed, however, impressed the market by the extent of his pessimism on the U.S. economy, citing the "continuing weakness" of the labor market and "significant risks" associated with "tensions global financial markets. " Expected as the messiah, Bern Bernanke, the head of the U.S. central bank has disappointed. The Fed "does not have the tools to miraculously revive economic growth," could only observe Nigel Gault, the firm IHS Global Insight.

Several indicators have confirmed the sluggishness of activity across the Atlantic, like the new jobless claims last week to 423,000, down but higher than expected (418,000). For its part, the Conference Board's composite index came out up 0.3% in August, but slowed down, which is a sign of increased risks to growth.The U.S. treasury secretary, Timothy Geithner, has found himself in Washington that the slow economic growth was a challenge "bigger" than the debt that states the world should give priority to support growth.

As if this were not enough, the bad news continued to accumulate on the side of the euro area. The private sector activity there is in fact contracted in September for the first time in over two years, according to a first estimate of the firm Markit PMI. The activity slows and approaches the stagnation in Germany and France, the two largest economies in the region, the source said. Italy, whose financial markets worried, revised sharply downward its growth forecasts, reduced to 0.7% for 2011, 0.6% in 2012 and 0.9% in 2013.Rome assured that the austerity plan passed last week was enough to balance the budget by 2013. But the bond market, the Italian securities suffered, with a standard rate record deal with German titles, safe havens in which investors have rushed. The performance of the German Bund and 10-year fell to its lowest ever observed in 1.665%.

The debate continues in Europe on the recapitalization of banks, following the call to use the IMF's European Financial Stability Fund (EFSF) to recapitalize the most exposed to the debt crisis. The IMF estimates the potential losses in the sector to 200 billion euros. Echoing the words of his colleague in charge of Competition, Joaquin Almunia, European Commissioner Michel Barnier to Financial Services found that 25 of them need to be recapitalized.

The three main French banks have made a spectacular recovery on the stock market Wednesday afternoon, unconfirmed rumors recapitalization that gave a boost to their titles.

As they signed in mid-day the worst stock market performance of European banking sector, BNP Paribas, Credit Agricole and Societe Generale took up to 3:45 p.m., respectively, 1.95%, 0.52% and 0.79% while the European banking index fell by 0.13%.

"We feel that the market is abuzz with rumors and there is nothing really solid.I think the market will come back (back), "said one trader told Reuters.

A spokeswoman for BNP Paribas has denied rumors the new recapitalization.

"In the words of (the president) Michel Pébereau yesterday we currently have no need to be recapitalized," she said, noting that his bank had just signed one of his best performances in history in terms of results .

French banks were attacked in the morning, some operators are worrying about their access to liquidity despite the increase in denials.

The climate has become particularly burdensome for banks in recent weeks hexagonal where announcements of measures to promote the return of market confidence have been ineffective.

The German group Siemens has withdrawn funds early July of Société Générale as a result of under-performance of an investment, but the news was interpreted by some as indicative of the financial health of the bank.

Similarly, the decision by Standard & Poor's to lower the sovereign rating of Italy, although it was expected by the markets, also helped fuel the fears of contagion from the crisis of debt in the euro area.