[Fabb]

http://www.finfacts.com/irelandbusinessnews/uploads/eurogdpaug142006.jpg

BRUSSELS, Belgium (Reuters) -- The euro zone economy grew at its fastest quarterly rate in six years in the second quarter, reinforcing market expectations of two rather than one more interest rate rises by the European Central Bank this year.

European Union statistics office Eurostat said on Monday gross domestic product in the 12 countries using the euro rose 0.9 percent quarter-on-quarter in April to June -- the fastest growth since the second quarter of the dot-com boom year 2000.

Eurostat said that year-on-year, GDP growth in the euro zone accelerated to 2.4 percent from 2.0 percent in the first quarter and 1.7 percent in the last quarter of 2005.

Economists polled by Reuters had expected 0.7 percent quarterly growth and a 2.3 percent annual expansion.

"The recovery is no longer in question. The data is a bit too good because there are special effects, but clearly this is growth above trend," said Holger Schmieding, economist at Bank of America.

While detailed figures on GDP components will be available only from August 31, economists said country data suggested second-quarter euro zone growth was fueled mainly by domestic demand -- private consumption and investment.

They said consumption was probably exaggerated by the soccer World Cup held in Germany in June and July as well as a rebound in construction activity after poor weather in winter, but even despite that, growth was strong.

The second-quarter expansion is a further acceleration from the 0.6 percent quarterly growth in the first three months and 0.3 percent in the last quarter of 2005.

It was led by the euro zone's two biggest economies, Germany and France, which expanded 0.9 percent and 1.2 percent on a quarterly basis respectively.
ECB expected to raise rates again

In a regular forecast, the European Commission raised its estimate for third-quarter GDP growth in the euro zone to a range of 0.5-0.9 percent quarter-on-quarter from 0.3-0.7 percent projected on July 12. It cut its fourth-quarter GDP growth forecast to 0.4-0.9 percent from 0.5-1.0 percent.

In the first quarter of 2007, the Commission expects the euro zone economy to expand between 0.2 and 0.8 percent on a quarterly basis, it said in a statement.

Economists said the strong second quarter made it almost certain that the European Central Bank, which has been hiking rates since December to stem inflationary pressure from record credit growth and oil prices, would keep raising credit costs.

"At the moment, the ECB faces an environment in which GDP growth is robust, business surveys are still upbeat, money growth is in double-digit territory and inflation is well above target," said John Butler, economist at HSBC.

"We take these numbers as confirmation that the ECB will hike again in October and then again in December, taking rates back to 3.5 percent by the end of the year," he said.

But the bank is likely to pause after that for most of 2007, to see what happens in the global economy and what effect a planned rise in German value-added tax will have on economic growth, economists said.

Copyright 2006 Reuters

[pricemazda]

Good news, all round.

We need a eurozone recovery before the doubters in the UK, Sweden and Denmark will consider joining the euro.

The UK has revised its growth forecasts up to 2.8%.

[The Dear Leader]

It'll be a shortlived recovery, at least here in Germany.

[pricemazda]

I don't think so across the world economies are picking up again, Japan, France, Germany, growth is being revised upwards in the UK as well.

This is a global revival.

[Fabb]

Aug. 30, 2006, 1:48PM
France Jobless Rate Slips to 8.9 Percent

© 2006 The Associated Press

PARIS — France's unemployment rate fell to 8.9 percent in July, a 4 1/2 year low, the Labor Ministry said Wednesday.

The ministry said there were 2,159,900 jobseekers in July, down 26,700 from June, when the jobless rate stood at 9 percent.

Economists had expected the July figure to remain unchanged from June's levels, though France's unemployment rate has been on a downward path in recent months, helped by stronger economic growth and fewer new jobseekers.

[The Dear Leader]

I don't think so across the world economies are picking up again, Japan, France, Germany, growth is being revised upwards in the UK as well.

This is a global revival.

You underestimate the suckiness of the German government. Higher taxes in all areas mean that next year we'll probably have 0.5% growth or something like that.

[pricemazda]

who would you rather though Merkel or Schroeder? Count your blessings young man.

[The Dear Leader]

Merkel's just as bad as Schröder...maybe even worse.

[Exarchus]

Lol, I should be a prophet. I predicted Merkel's promises were all on winds.

Go Shroeder!!! Economy is all about reading chicken's guts.

[Simaru]

Wath is the percent "booming"?? because the informations say the data is a bit too good because there are special effects, but clearly this is growth above trend.

[one very bored guy]

It'll be a shortlived recovery, at least here in Germany.

:lol: comeon. If everyone in Germany had the same opinion as you, the economy would never improve.

Remember, consumer and business confidence can bring a country out of recession.

Then again, Germans are ultra cautious people, which is one of the reasons the recessions can last so long here. When times get tough, Many Germans go into hibernation instead of spending money, even when their own personal financial situation hasn't changed.

[Fabb]

Higher taxes in all areas mean that next year we'll probably have 0.5% growth or something like that.

The anticipation of the VAT increase will probably result in a spending spree by the end of the year.
That's not so bad.

[The Dear Leader]

:lol: comeon. If everyone in Germany had the same opinion as you, the economy would never improve.

Remember, consumer and business confidence can bring a country out of recession.

Then again, Germans are ultra cautious people, which is one of the reasons the recessions can last so long here. When times get tough, Many Germans go into hibernation instead of spending money, even when their own personal financial situation hasn't changed.

The thing is that Germany's main problems, like the situation on the labor market, simply haven't been addressed yet. As long as the government sits on its hands, we won't see a true recovery.

[tergeste]

So Germany needs Hartz V, VI, VII, VIII.......XLVIII ;)

[Nexus6]

Merkel is not the problem. The problem are the voters who bashed Merkel in the elections for be beeing honest and ultimately forced her to join a coalition with the socialists. Merkel now simply complies to the will of the people by not enforcing strict reforms...

[tergeste]

Well, even if she didn't want to comply with the will of the people and make bold reforms, she would be hampered by having to share a coalition with the SPD (which in turn won a large number of seats because of the will of the people).

[The Dear Leader]

Merkel is not the problem. The problem are the voters who bashed Merkel in the elections for be beeing honest and ultimately forced her to join a coalition with the socialists. Merkel now simply complies to the will of the people by not enforcing strict reforms...

And where has this gotten her? Right, lowest poll ratings ever. She ran a horrible campaign, that's why she ultimately lost her conservative/free democratic majority.

If people felt she was doing the right thing by doing nothing, her poll ratings would probably be higher.

[Nexus6]

If people felt she was doing the right thing by doing nothing, her poll ratings would probably be higher.

You assume that voters act reasonable - they don't. Merkel's ratings don't fall because of inaction but because people dislike the fact that she wants to raise taxes. The voters want a state which spends alot on social security but doesn't collect the money for that from them. The voters bashed Merkel in the elections for announcing cuts in social security and now that she reversed course and wants to keep a high level of security they bash her for collecting the money that is necessary to finance it.:jester:

[Mercutio]

^ That's the same in every democracy. Voters always want government to spend more and tax less. There's always a balance to be struck and the debate is where to strike that balance.

[The Dear Leader]

Will Italy leave/be kicked out of the euro zone?

All this seems bizarrely at odds with the growing belief, particularly in London, that Italy may risk falling out of the euro. A study being published shortly by a London-based think-tank, the Centre for European Reform (CER), puts the odds of this happening at a daunting 40%. Mr Padoa-Schioppa is scathing about such talk. “My time is rather short, and I decided not to spend any of it on nonsensical scenarios,” he says. “That is a nonsensical scenario.”

Is it? There are, in fact, two variants of it. One envisages Italy's public finances deteriorating to the point where its debt loses investment grade (which would require only two further downgrades by the main rating agencies). That would sharply raise debt-servicing costs, pitching the government into a downward spiral of surging interest rates and rising deficits.

[...]

Yet it is the second variant of Italy leaving the euro that should perhaps be more worrying. This envisages the country pulling out because its competitiveness erodes to a point where membership becomes too painful. Indeed, it is this continuing loss of competitiveness, and not its public finances, that may be the biggest economic problem facing Italy. The CER study concludes that it is five minutes to midnight, and that the Italian government “needs to act now to ensure the country's long-term membership of the euro zone”."

http://www.economist.com/world/europe/displaystory.cfm?story_id=E1_SJTTPVG

See also: http://www.cer.org.uk/pdf/pr_688_eurozone_tilford.pdf

[pricemazda]

But pulling out of the euro will only help if Italy devalues the Lira which it has done repeatedly since 1945 to try to artificially boost competitiveness, it doesn't solve the problem and only increases inflation.

The only way to resolve this issue for Italy is to sort out its fiscal mess, stop spending huge sums of money which it doesn't have and sort out its pension problem which is the worst in Europe.

Pulling out of the euro isn't the answer.

[Swede]

^Plus, pulling out of the € would incur a huge cost from having to introduce the new coins and notes.

[The Dear Leader]

Minting new coins and printing new bills isn't that expensive. I don't think they should leave the Eurozone either but it's certainly been debated in Italy.

[pricemazda]

It will never happen the economic and political costs are too high for the euro to fail. It would have such a huge impact on the currency markets and therefore on the eurozone economy, and therefore the global economy.

Lets not forget that about 1/3 of the world's currency reserves are in euros

[The Dear Leader]

This is just about Italy though. Even before the Euro was introduced, plenty of people thought that Italy should stay on the outside.

[Exarchus]

Yeah well, they have the same problem than Romania had until they changed of currency.

Their currency was so worthless with inflation they had to use bills with a lot of 0s, they had the impression to be rich, and now they have small numbers... (semi J/k)

[one very bored guy]

Minting new coins and printing new bills isn't that expensive. I don't think they should leave the Eurozone either but it's certainly been debated in Italy.

No, it is incredibly expensive to change currency's. Not only does it require the physical new currency that needs to be minted. It also requires large scale changes on the financial markets. Every business in the country will have to change their books, documents, price tags and software. Every person would have to be re-educated in the new currency (it will not come back as 1:1). It is something that should only be done when there is a positive reason for it.

[The Dear Leader]

The beginning of the end of Germany's "recovery"?

German ZEW indicator plunges to -22.2 in September

MANNHEIM, Germany, Sept 19 (Reuters) - Investor sentiment in Germany fell more sharply than expected in September, the latest survey by the ZEW economic institute showed on Tuesday.

The Mannheim-based think tank said it economic expectations indicator for Germany, based on a survey of 307 analysts and institutional investors, fell to -22.2 from -5.6 in August.

The mid-range forecast in a Reuters poll of 46 economists last week was for a September reading of -7.8 <ECONDE>. Predictions ranged from -19 to 15.

A separate gauge of current conditions for Germany rose to 38.9 from 33.6 in August, above a consensus for 35.0.

The ZEW's euro zone expectations indicator registered -10.2 for September after 1.3 in August.

http://today.reuters.com/news/articlebusiness.aspx?type=tnBusinessNews&storyID=nBAE000438&imageid=&cap=&from=business

[The Dear Leader]

It will never happen the economic and political costs are too high for the euro to fail. It would have such a huge impact on the currency markets and therefore on the eurozone economy, and therefore the global economy.

Lets not forget that about 1/3 of the world's currency reserves are in euros

It's actually just around 1/4 (and the pace of diversification has slowed). Besides, these countries can always switch to Deutschmarks. :D

[Nexus6]

Investor sentiment in Germany fell more sharply than expected in September, the latest survey by the ZEW economic institute showed on Tuesday.

That is only investor sentiment though and investors change their mood very randomly, plus they tend to exaggerate trends, just look at what investors said about the oil price just a few weeks ago and how the situation is now.

Currently they are all gloomy about the US economy and rising sales tax in Germany. Well, the problem I see with that notion is that some fundamental things have changed in recent years, most notably the US ain't not running the world economy anymore. But many investors seem to be so stuck with that idea (which was correct for decades) that they are unable to realize the new world we live in now. To give you some figures, German exports to the US are now at an all time low in percentage of total exports, 8% that is. So much has world trade diversified, that the importance of the US for the German economy has gone from dominating (we used to export over 50% of hour goods to the US at the peak) down to minor. Second problem is with the salex tax. Investors often only have a background in business administration but not in economics. Let's examine what happens to the 3% increased sales tax (according to the investment community they go into some black hole and dissapear forever from this universe and thereby weaken the purchasing power of consumers). Thruth though is that one half of it will be used to lower social security contributions which increases net wages (higher purchasing power) and lowers gross wages (more employment). The other half will be used to lower the amount of new credit the state has to request on the money market. Since the state is the single largest requester of credits, the demand for credit will be lowered significantly and that will in turn lower real interest rates which makes it easier for private companies to get credit and to invest. Therefore I don't expect much of an impact through the increases sales tax.

[Fabb]

Eurozone Sept CPI drops to ECB target,confidence up
Fri Sep 29, 2006 4:43am ET177

By Jan Strupczewski

BRUSSELS, Sept 29 (Reuters) - Lower oil prices helped cut September euro zone inflation to its lowest in 3-1/2 years and price growth expectations eased too, data showed on Friday, but this is unlikely to stop further ECB rate rises.

The European Union's statistics office estimated prices grew 1.8 percent year-on-year in September -- the lowest rate since March 2003 -- down from 2.3 percent in August and below market expectations of 1.9 percent.

But although it is now at the European Central Bank's target of "below, but close to 2 percent", economists said inflation would rebound in a few months as the oil price effect wears off, Germany raises Value Added Tax and the economy powers ahead.

"Over coming months, headline inflation will push back above 2 percent and remain there on average over 2007. The data should therefore have little impact on ECB policy," said Mitul Kotecha, head of global foreign exchange research at Calyon in London.

Markets expect the ECB to raise interest rates next Thursday by 25 basis points to 3.25 percent and price in a good chance for them to reach 3.75 percent by mid 2007.

Hawks on the ECB board are likely to get a boost from the European Commission's euro zone economic sentiment indicators which hit multi-year highs in September, against expectations of a small decline, pointing to a continued economic upswing.

"As this fits nicely with the ECB's optimistic projection for GDP growth in the second half of 2006, central bank rates are likely to rise further," said HVB economist Marco Kramer.

But hard data for the euro zone's two biggest economies added a note of caution to the upbeat sentiment indicators.

German retail sales, which show household demand, were unchanged in August against July despite expectations of a rise, pointing to weak private consumption in the euro zone's biggest economy.

The data followed a smaller than expected decline in unemployment in September. In France, unemployment rose in August instead of the expected decline.

Yet ECB Governing Board member Axel Weber said in Berlin growth in Germany could get a boost this year and next thanks to falling oil prices.

ECONOMY GOING STRONG

The ECB is worried that with the economy growing strongly, unemployment falling and borrowing costs low, there is potential for an inflationary upswing in wages and prices.

While the drop in inflation is likely to be welcomes by the ECB, the bank's Executive Board member Jose Manuel Gonzalez Paramo said on Thursday that monetary policy could not respond to short-term changes in price trends, such as oil.

A critical factor to the ECB's goal of keeping inflation in check is anchoring inflation expectations at low levels, because expectations affect price behaviour and could help keep inflation below 2 percent on a sustained basis.

The monthly European Commission survey showed some success in that respect with consumer inflation expectations down to 24 points from 26 points in August and selling price expectations among manufacturing industry unchanged at 13.

"One of the ECB's major objectives is to keep inflation expectations in check to avoid second round effects, and today's release goes into the right direction, albeit not being an 'all clear'," said Astrid Schilo, economist at HSBC.

ECB policymakers have made it clear that a few months of relief will not deter them from raising rates.

Economists are now asking whether the bank will keep on raising rates in 2007, when a global growth slowdown, the German VAT hike, higher interest rates and a stronger euro are likely to slow euro zone growth.

Sentiment data from the European Commission showed both businesses and consumer confidence was still on the rise in September after an earlier dip.

Economic sentiment in the euro zone rose to 109.3 points -- its highest level since February 2001 -- from an upwardly revised 108.3 points in August, thanks to higher confidence in industry, construction, the retail sector and among consumers.

The Commission's euro zone business climate indicator jumped to to 1.46 points in September, its highest level since June 2000, pointing to a third-quarter pick-up in industrial output.

"For the ECB it means they need to go to sort of neutral, because with good growth you don't need low rates. But whether they need to go beyond 3.5 percent in the absence of inflationary pressure is a very open question and I think they will stop at 3.5 percent," said Holger Schmieding, economist at Bank of America.

© Reuters 2006. All Rights Reserved.

[pricemazda]

From today's Times Newspaper

http://images.thetimes.co.uk/TGD/picture/0,,347517.jpg

[FREKI]

We need a eurozone recovery before the doubters in the UK, Sweden and Denmark will consider joining the euro. The Euro-Zone will need a hell of a lot more before anyone here is convinced!
When it comes to surplus on the public finances in the EU, no one is above or next to Denmark. 5 per cent of the GNP is a clear record – and almost double amount of number two in Europe, Sweden

http://www.copcap.com/composite-9457.htm

Being locked to the damn Euro is more than enough! :yuck:

[Fabb]

The Euro-Zone will need a hell of a lot more before anyone here is convinced!


Plenty of people are already conviced. Only, they don't form a majority.

[Fabb]

German Exports Dropped in August as Demand From U.S. Declines

By Simone Meier

Oct. 9 (Bloomberg) -- German exports unexpectedly fell in August as slowing U.S. growth damped demand for products such as cars from Europe's largest economy.

Sales abroad, adjusted for working days and seasonal changes, slipped 0.1 percent from July, when they increased a revised 2.2 percent, the Federal Statistics Office in Wiesbaden said today. Economists predicted a 0.2 percent gain, according to the median of 14 estimates in a Bloomberg News survey.

The German economy is showing signs of losing momentum, after expanding at the fastest pace in five years in the second quarter, as a global slowdown hurts exports and executives become more concerned about the growth outlook. Companies may not be able to count on stronger domestic demand to bolster earnings with the government planning to raise value-added tax from 2007.

``The global slowdown should gradually show an impact on German exports,'' said Andreas Scheuerle, an economist at DekaBank in Frankfurt, who expects economic growth to slow to 0.6 percent in the third quarter from 0.9 percent in the second. Germany will experience ``an unfortunate combination of weak domestic and foreign demand after the VAT increase early next year.''

Exports, the mainstay of German growth in 2005, rose 9.6 percent from a year earlier to 69.4 billion euros ($87.5 billion), today's report showed. Imports fell 0.3 percent in the month and gained 12.5 percent in the year. The trade surplus narrowed to 11.2 billion euros from 13.2 billion euros in July. Adjusted for seasonal swings and work days, the surplus widened to 12.1 billion euros from 12 billion euros.

`Difficult Environment'

Growth in the U.S., the world's largest economy and destination for one-fifth of European exports, will slow to 2.9 percent next year from 3.4 percent this year, according to a Sept. 14 forecast by the International Monetary Fund. In comparison, the global economy may expand 5.1 percent and 4.9 percent this year and next, the Washington-based fund said.

Volkswagen AG, Europe's largest carmaker based in Wolfsburg, Germany, said Oct. 3 that U.S. sales fell 7.2 percent in September from a year earlier. In the same month, U.S. sales of Munich-based Bayerische Motoren Werke AG's BMW luxury cars dropped 7 percent.

The euro's 7 percent gain against the dollar this year is adding to pressure on European exporters by making their goods more expensive abroad. The euro was at $1.2596 today.

DaimlerChrysler AG, the world's fifth-largest carmaker, unexpectedly cut its 2006 profit goal on Sept. 15 because of a projected $1.5 billion loss at Chrysler in the U.S. in the third quarter. The Stuttgart, Germany-based company said it's facing a ``difficult environment.''

Oil Prices Retreat

German executives grew more pessimistic about the outlook for the next six months in September, the Ifo economic research institute said on Sept. 26. The government's plan to raise value- added tax by 3 percentage points to 19 percent from January is threatening to undermine domestic demand just recovering from record unemployment last year. The jobless rate was at 10.6 percent in September for a third month, down from a post World War Two high of 12 percent in March last year.

A 23 percent retreat in oil prices from a record of $78.40 a barrel on July 14 may help counter the increase in VAT by boosting households' purchasing power. Bundesbank President Axel Weber told reporters in Berlin on Sept. 29 that the economy may expand at a faster-than-expected pace if the decline in oil prices persists.

A rebound in construction spending helped counter slowing export growth and shrinking consumption in the second quarter, fueling the fastest growth since the first three months of 2001.

In August, German industrial production probably increased 0.3 percent from July, a Bloomberg survey shows. The Economy and Technology Ministry will release the report at noon in Berlin today. Factory orders unexpectedly jumped 3.7 percent in August, the government said Oct. 6.

The Bundesbank currently expects German growth of about 2.25 percent this year and 1.5 percent in 2007.

[Fabb]

German Industrial Production Increases the Most in Three Years

By Matthew Brockett

Oct. 9 (Bloomberg) -- Industrial production in Germany rose the most in almost three years in August as Europe's largest economy heads for its fastest expansion since 2000.

Production jumped 1.9 percent from July, when it rose a revised 0.8 percent, the Economy and Technology Ministry said today in Berlin. August's gain was the biggest since October 2003. Economists expected a 0.3 percent increase, according to the median of 40 estimates in a Bloomberg News survey. From a year earlier, production rose 7.2 percent.

Germany's IW economic institute today raised its forecast for economic growth this year to 2.4 percent from 2 percent, as exports fuel domestic investment and spending. Growth may moderate next year after the European Central Bank raised interest rates five times in 10 months to quell inflation in the 12 nations that share the euro.

``There's a momentum in Germany and the euro zone at the moment that's almost unstoppable,'' said Stephen Webster, chief European economist at 4Cast Ltd. in London. Growth is ``surprising on the upside. The ECB is definitely going to raise rates again.''

Economists and investors predict the ECB will raise its benchmark rate to 3.5 percent in December after an increase to 3.25 percent last week.

German construction output rose 1.2 percent in August from July while production of goods such as refrigerators and washing machines climbed 1.8 percent, the ministry said today. Production of semi-finished goods jumped 4.6 percent, and plant and machinery production advanced 0.4 percent.

Orders Surge

German factory orders unexpectedly surged 3.7 percent in August after a 2.1 percent gain in July, driven by both foreign and domestic demand, a report last week showed,

That prompted economists including 4Cast's Webster, Nick Matthews at Barclays Capital and Sandra Petcov at Lehman Brothers to revise up their forecasts for industrial production.

``Conditions in the German industrial sector still look very favorable,'' said Matthews. ``German GDP is looking quite strong in the third quarter. It reinforces our confidence for euro-region growth this year of 2.7 percent.''

The 12-nation euro-region economy is also expanding at the fastest pace in six years, with the European Commission currently forecasting 2.5 percent growth this year. It's due to update its forecasts on Oct. 11.

Latest data ``suggest the global economy is doing better than people thought, and that benefits countries like Germany, the world's biggest exporter'' of goods, said Dario Perkins, European economist at ABN Amro Holding NV in London.

Global Economy

Porsche AG, the German luxury carmaker, expects ``excellent'' results this fiscal year as sales in Russia and China increase, Chief Executive Officer Wendelin Wiedeking said last week.

Salzgitter AG, the German steelmaker, had a record profit in the third quarter and will generate sales of 8 billion euros ($10.1 billion) in 2006, Chief Executive Officer Wolfgang Leese told the Financial Times Deutschland newspaper last week.

Still, economic growth may slow next year as higher interest rates, slower global expansion and a sales-tax increase reduce demand for goods such as cars and mobile phones, the European Commission said Oct. 2.

European economic growth will slow to 2 percent next year, according to the International Monetary Fund. The U.S. will expand 2.9 percent after 3.4 percent this year, the Washington-based fund said Sept. 14. It forecasts the global economy will expand 5.1 percent this year and 4.9 percent in 2007.

Economists are divided on whether European economic growth will prove strong enough to allow the ECB to continue raising interest rates next year. Eleven of 20 economists surveyed by Bloomberg News say the Frankfurt-based central bank will lift its benchmark rate to 3.75 percent in March after a quarter-point increase in December.

[The Dear Leader]

From today's Times Newspaper

http://images.thetimes.co.uk/TGD/picture/0,,347517.jpg

The US will still have considerably higher growth than Eurozone countries like Germany, Italy or even France.

[flash110]

It´s good to be optimistic but let´s face it, the global economy was booming for several years now, Eurozone seems to be "slowly" following that trend. The Eurozone will hardly meet the sustained growth rates other free market economy countries like USA or UK, simply because countries like Germany already have big demographic problems (its population even shrinks) and specially because their rigid economy system (inflexible labour market with overexcessive trade unions influence, laws that limit free capital flow, excessive state social spendings) crushes the economy growh potential and the investments every year , until these economies are liberalized the Eurozone will be lucky to have some average growth years from time to time...

[qzzq]

From the BBC (http://news.bbc.co.uk/2/hi/business/6120972.stm):

Eurozone economy gathering pace

The eurozone economy is now expanding at its fastest rate since the turn of the century, according to the latest figures from the European Commission.
Raising its forecast, the Commission now expects that economic growth across the 12 nations that share the euro will grow by an average 2.6% in 2006.

Revised up from its previous estimate of 2.5%, it is a marked improvement on the 1.4% growth seen in 2005.

The economic expansion is helping states reduce their public deficits.

'Growth continuing'

Brussels said it was increasing its eurozone growth predictions after a surprisingly strong economic performance in the first half of the year.

After growing 2.6% this year, it expects eurozone economic growth to continue next year, only at the slower pace of 2.1%.

For the 25-nation European Union region as a whole, it expects growth to be 2.8% this year and 2.4% in 2007.

European Union Economic and Monetary Affairs Commissioner Joaquin Almunia said the good figures brought to an end "years of disappointing results".

Brussels' latest half-yearly economic forecast predicts that Germany and France will see their budget deficits shrink to below the eurozone ceiling of 3% of GDP in 2006.

This repeats comments made by Mr Almunia last month.

The Commission's latest report says that the German deficit will fall to 2.3% this year, 1.6% in 2007 and 1.2% in 2008; while France will drop to 2.7% this year, 2.6% in 2007 and 1.2% the year after.

Falling inflation

The 3% rule was designed to ensure the euro is not undermined by overspending states.

Yet as eurozone economic growth has struggled in recent years, a number of member state governments have found it difficult to control the gap between their revenues and expenditure.

It is only this year, with economies again growing strongly, that nations have been able to get their deficits in order.

The Commission added that while Italy should manage to reduce its deficit from 4.7% this year to 2.9% in 2007, it could rise again in 2008 unless the Italian government takes extra measures.

Yet the report added that Portugal was expected to be the most persistent budget offender, with its deficit rising to 4.6% this year, 4% next year and 3.9% in 2008.

As for eurozone inflation, the Commission sees it standing at 2.2% this year, before easing to 2.1% in 2007 - both just above Brussels' 2% target.

:banana:

[Fabb]

Associated Press
All Associated Press News

PARIS (AP) - President Jacques Chirac said in an interview published Monday that France's unemployment rate dropped to 8.8 percent in September, from 9 percent in August.

Chirac, who rarely announces economic figures himself, was quoted as telling Le Figaro newspaper that France was headed in "the right direction" toward his goal of bringing joblessness below 8 percent by the end of 2007.

"The fight against unemployment is the absolute priority," Chirac said in an interview posted on the daily's Web site. "I won't hide that for me, this fight against unemployment is head and shoulders above any political considerations."

Chirac, whom many political analysts expect will not run for a third term in next spring's presidential elections, was asked almost exclusively about domestic affairs in the interview.

Chirac said he would not announce whether he will run again until "the first trimester of 2007," to avoid distracting attention away from his government's agenda.

© 2006 The Associated Press.

[qzzq]

^Chirac another term? Can't see that happening. He's doing lousy in the polls, and he's not getting any younger. Time for some fresh blood.

What about Ms Royal's chances?

http://www.u-blog.net/UJDR/img/_41230310_royalbodyok.jpg

[Allez]

Pretty graphics and editorials- but we've work to do other than making pretty graphics and self-massage. As it stands this morning, Airbus is a major concern...

[Fabb]

EU FORECASTS
11.06.2006, 06:01 AM

BRUSSELS (AFX) - The European Commission raised its euro zone growth forecast for 2006 to a record high of 2.6 pct from an interim forecast of 2.5 pct published in September.

The commission also upped its 2007 growth projection to 2.1 pct from the 1.8 pct given in its previous set of full economic forecasts, published in May.

In its autumn forecasts, it estimated growth will rise back up to 2.2 pct in 2008.

'After years of disappointing results, the European Union economy in 2006 will be at its best since the beginning of the decade and is expected to grow at around potential in 2007 and 2008,' EU economic and monetary affairs commissioner Joaquin Almunia said.

By country, Germany's 2006 growth forecast was hiked to 2.4 pct from the 2.2 pct given on Sept 6 in the commission's interim 2006 forecasts for the key EU economies.

The German growth forecast for 2007 was raised to 1.2 pct from the 1.0 pct given on May 8. The commission forecast German growth rising to 2.0 pct in 2008.

France's 2006 growth forecast was cut slightly to 2.2 pct from the 2.3 pct given on Sept 6, but was raised back to 2.3 pct for 2007 from the commission's May projection of 2.0 pct.

The commission forecast French growth of 2.1 pct in 2008.

Italy's 2006 GDP growth forecast was unchanged at 1.7 pct, but raised to 1.4 pct for 2007 from the 1.2 pct given in May.

The commission projected Italian growth will remain at 1.4 pct in 2008.

Outside the euro zone, the UK's 2006 GDP growth forecast was kept at 2.7 pct, but cut to 2.6 pct for 2007 from 2.8 pct.

UK growth is expected to fall further to 2.4 pct in 2008.

For the EU as a whole, the commission raised its 2006 growth forecast to 2.8 pct from the 2.7 pct given in September.

It also hiked its 2007 growth projection for the EU to 2.4 pct from the 2.2 pct published in May.

EU growth is forecast to remain at 2.4 pct in 2008.

The commission said risks to the growth outlook are 'fairly balanced', but tilted slightly to the upside this year, with the downside becoming more pronounced in 2007.

'Both financial market and financing conditions continue to be favourable, supporting economic growth, although to a lesser degree than in 2005,' it noted.

On the inflation front, the commission cut its 2006 euro zone forecast to 2.2 pct from the 2.3 pct given in September.

In 2007, euro zone inflation is now forecast at 2.1 pct compared with the 2.2 pct projected in May.

The commission forecast euro zone inflation will fall to 1.9 pct in 2008.

The second-round effects of high oil prices has remained very limited, although inflationary pressures have shown up in producer prices, it said.

victoria.main@afxnews.com


Copyright AFX News Limited 2006

[FREKI]

^ Who needs the Euro Zone? :shrug:


Denmark is economic top country in the EU
04-10-2006

Economy:
Denmark continues to meet the economical criteria with regards to the Economic and Monetary Union (EMU).

Last year profit of the EMU balance was 4.9 per cent of the Danish gross national product (GNP) or EUR 10 billion. And the EMU debt was at 35.9 per cent of the GNP corresponding to a deficit of approximately EUR 75 billion. This appears in new figures from Statistics Denmark, writes Berlingske Tidende.

The EMU debt and the EMU balance are two important key figures which are used by the EU to estimate whether the members meet the criteria in the stability and growth treaty of the EMU. According to the treaty the member countries’ public deficit is not allowed to be over 3 per cent of the GNP. And the public debt is to be 60 per cent of GNP at the most.

Consequently, Denmark is very far from the pain threshold. And with a view to the economy during the last few years it has only improved: the EMU debt has decreased by approximately EUR 15 billion since 2002 and at the same time the profit of the EMU balance has increased from 1.2 per cent of the Danish GNP in 2002 to the known 4.9 per cent last year.
http://www.copcap.com/composite-9716.htm

[jef]

You are right Dear Leader.

Extract From BBC:
French economic growth stagnates

A slowdown in consumer spending in France had been expected
Economic growth in France stagnated in the third quarter of the year, official figures show.
Statistics agency Insee reported zero growth between July and September - after a 1.2% expansion in the previous three months

I love EU forecasts :haha:

[jef]

^ Who needs the Euro Zone? :shrug:

More broadly: Germany stagnates, France is facing riots that result a.o. from decades of mass unemployment and racial discrimination, Italy debt rating has been downgraded, etc. ...

[lexberg]

Economic growth in 2006 is set to reach 4.9% in Finland.

[Fabb]

Economic growth in 2006 is set to reach 4.9% in Finland.

Excellent !
Those who claim that the Euro is responsible for stagnating growth and high unemployment should think of Finland.

German GDP growth will be announced next Tuesday. I bet it'll be good.

[Mercutio]

You are right Dear Leader.

Extract From BBC:
French economic growth stagnates

A slowdown in consumer spending in France had been expected
Economic growth in France stagnated in the third quarter of the year, official figures show.
Statistics agency Insee reported zero growth between July and September - after a 1.2% expansion in the previous three months

I love EU forecasts :haha:Stop deviating from the official line and boosterism of this thread with your awkward facts and statistics. This thread is about fantasy - not fact! ;)

[jef]

yep, I love France, Germany, Italy etc. BUT I also love Denmark, England, Sweden and all those countries and people that do not want to lose their sovereignity over such important matters as monetary and fiscal policies.

[Nexus6]

Every country profits from giving up souvereignity over monetary policies because it is exactly the political influence on monetary policy which is dangerous to the long term economic performance of a country, as we can currently see in the US which begins to slip into economic stagnation due to a decade of politically influenced loose monetary policy executed by the former fed chairman Alan Greenspan. I predict that by the end of this decade we will see the death of Neo-Keynesianism as exemplified by the US and instead will witness a rerise of the neo-classical school of economics, especially the Austrian school, which in contrast to the Keynesianists believes that governments should not mess aorund with money. Money should be stable in its purchasing power - nothing else. I don't trust governments one bit if that claim that they need "souvereignity" over monetary policies for the common good. They don't hesitate one second to sell the nation's future in order to win an election in the present.

[jef]

Nexus, the BoE is independent. However it is still up to the policits to set up the target.

[pricemazda]

Nexus many countries have already tried monetarism and it resulted in absolute disaster.

Look at Thatchers flirtation with it in the early 80's it resulted in our worst depression since the 1920s.

[jef]

I think he was talking about neo-classical economics. Monetarism is indeed dead for good.

[Joka]

An interesting read somewhat related to the topic.

An article in the European Voice by Hans Martens (subscription required), chief executive of the European Policy Centre, recently caught my eye by strongly arguing that EU economies are in a good shape.

Martens’s article focused on a study by the Economist Intelligence Unit and the Columbia Program on International Investment which showed the EU attracted nearly three times more foreign direct investment (FDI) then any other economic area.

In 2006 417billion euros of FDI was put into the EU, compared with 150billion going to the US, 13,5billion to Brazil, 17.5billion to Russia, 7.96billion to India and 69.25billion to China. Better still, it is predicted that Europe will maintain this considerable level of FDI in 2010.

Martens also highlights the World Economic Forum’s competitiveness index which again shows how strongly EU economies are performing, despite the commonly held view they are struggling. The index is based on both short-term growth prospects and potential for sustainable long-term wealth creation. Nine European countries are in the top 15 with the likes of Brazil, China and India well down the list.

The doom merchants have long been predicting trouble for the EU's economy, particularly for those countries in the eurozone, but in fact Europe is attracting massive investment and is well positioned to maintain its strong position in the long-term future.

Source (http://corbett.pir2.info/blog/2006/11/article-in-european-voice-by-hans.html)

[pricemazda]

I think he was talking about neo-classical economics. Monetarism is indeed dead for good.

If we are talking Adam Smith, the problem with the 'invisible hand' is let it run free and it will slap you in the face.

How do we address market failures?

[Nexus6]

How do we address market failures?

You can't. If you would be able to reliably identify market failure tendencies before they create havoc you would also imply that you are more intelligent and/or informed than the other market participants. That opinion is admittably currently en vogue in US and British central banker circles but IMO it is wrong. Communists also thought that they could predict supply and demand better than the markets do and by cleverly controlling the economy hoped to create an endless boom - they failed miserably. IMO you can only make things worse if you try to outsmart the markets. Stop even trying, instead focus on money stability and don't cloud your mind with GDP growth, unemployment and such factors. In the end you will do more good to the economy by ignoring them.

Just look at the track record of the Fed. The Fed didn't identify the IT bubble early enough to prevent it from building up and bursting. Then afterwards, they printed money like crazy trying to stop a recession from occuring, the result is inflation in other asset classes like housing, a bubble which will burst once again. The guys there are obviously not smart enough no matter how much they pretend to be. They should admit it and concentrate on their job, which is stable money and let all others run the economy.

[pricemazda]

We can deal with market failures, for example global warming is the biggest market failure of them all. Not everything can be solved by just leaving alone.

If we do nothing about global warming by the time the market prices in the costs of global warming, it will already be too late.

[Mercutio]

Nexus many countries have already tried monetarism and it resulted in absolute disaster.

Look at Thatchers flirtation with it in the early 80's it resulted in our worst depression since the 1920s.The early 90s recession was caused by the straightjacket of the ERM - not by Thatcher's monetarist policies.

[pricemazda]

The early 80's recession was caused by monetarism, no one was talking about the ERM.

But even that was her fault, for political reasons she insisted on the pound going in at a high level, despite the treasury and economists advising her otherwise.

[Mercutio]

The early 80's recession was caused by monetarism, no one was talking about the ERM.

But even that was her fault, for political reasons she insisted on the pound going in at a high level, despite the treasury and economists advising her otherwise.And many other advisors said the level wasn't high enough. Hindsight made many fools seem wise. ;)

And Britain's current prosperity owes a great deal to Thatcher's liberalising policies. She rolled back the state, reduced taxes, smashed the unions, encouraged private enterprise, sold off public housing, privatised vast sections of Britain's economy, ceased protection of "crown jewels" (ie national champions), encouraged competition, cleared the dead wood from British industry (British Leyland etc), deregulated the City leading to London's current pre-eminance as a global financial capital (the "Big Bang")....

Her policies were consistently market driven and that, more than anything else, explains why Britain has come from so far behind to now being a margin ahead of the other large European economies in terms of GDP per capita. Thatcher is why Britain is rich and successful today.

[Fabb]

Stop deviating from the official line and boosterism of this thread with your awkward facts and statistics. This thread is about fantasy - not fact! ;)

Here's a fact :

BERLIN, Nov 14 (Reuters) - German gross domestic product

(GDP), adjusted for seasonal variations, grew by 0.6 percent quarter-on-quarter in the third quarter, powered by foreign and domestic demand, the Federal Statistics Office said on Tuesday.

Although the figure was slightly below forecast, the Office said growth in the second and first quarters of 2006 was stronger than previously reported.

Year-on-year, GDP expanded by 2.3 percent in unadjusted terms in the July-September period, the Office said.

The mid-range forecast of economists polled by Reuters last week was for growth of 0.7 percent quarter-on-quarter. They forecast unadjusted year-on-year growth of 2.6 percent.

"In seasonally adjusted terms and compared with the previous quarter growth drivers came both from abroad and from home: foreign trade gained in dynamism again," the Office said.

"In Germany, both increasing investment and higher spending on private consumption contributed to GDP growth."

The Office said Europe's largest economy grew by 1.1 percent on the quarter in the April-June period, having previously estimated expansion of 0.9 percent. It also revised up growth in the first quarter to 0.8 percent, by 0.1 percentage point.

© Reuters 2006.

The upward revisions are a clear sign of a booming economy. I bet the dismal figure for the French GDP growth in the 2nd quarter will also be revised upward.

[pricemazda]

And many other advisors said the level wasn't high enough. Hindsight made many fools seem wise. ;)

And Britain's current prosperity owes a great deal to Thatcher's liberalising policies. She rolled back the state, reduced taxes, smashed the unions, encouraged private enterprise, sold off public housing, privatised vast sections of Britain's economy, ceased protection of "crown jewels" (ie national champions), encouraged competition, cleared the dead wood from British industry (British Leyland etc), deregulated the City leading to London's current pre-eminance as a global financial capital (the "Big Bang")....

Her policies were consistently market driven and that, more than anything else, explains why Britain has come from so far behind to now being a margin ahead of the other large European economies in terms of GDP per capita. Thatcher is why Britain is rich and successful today.

After abandoning monetarism, she embarked on classic keynesian economics. She created a massive credit boom to boost the economy in the short term and used over £280 billion in assets and North Sea Oil revenues to support her expansionist budgets. In 1984 over 15% of the UK budget revenue was from oil.

Ask an economist, and her record is not what you think it is. Don't believe the spin.

[jef]

Thatcher was not Keynesian. The credit boom or 'boom and bust' business cycle was supplied by loose monetary policy. Oil revenues are extremely marginal as a proportion of GDP. Thatcher is mainly associated with the structural 'neo-classical' reforms of the goods and labour markets. It took over a decade for these reforms to materialize into lower unemployment and higher GDP growth and eventually higher real income. Most countries have subsequently undertaken similar reforms, especially the Nordic countries.
But when she came into office, Britian was struggling with mass unemployment and falling GDP. Maybe you are too young to remember this. I do although I also admit she made mistakes such loosen monetary policy you were referring to.

[pricemazda]

Britain was struggling just like every other developed economy because of the imposition of oil price hikes during the 70s. Which caused the mythical stagflation, low growth, but high inflation.

Thatcher spent her way out of recession. That is classic Keynesian economics

[Mercutio]

Ask an economist, and her record is not what you think it is. Don't believe the spin.The only spin I don't believe is yours. It's politically motivated and factually it's at best selective and at worst a lie. The reason New Labour didn't reverse her revolution is because they accepted that she'd been right, and the left, which had fought against her programme tooth and nail, had been proven wrong. The economists admire most of what Thatcher achieved. Her policies turned Britain's economy around. I saw it happen. Other European economies are belatedly trying to follow the trail she blazed - though often too feebly to achieve what her shock tactics achieved in such a short time.

[jef]

Britain was struggling just like every other developed economy because of the imposition of oil price hikes during the 70s. Thatcher spent her way out of recession. That is classic Keynesian economics

You are confusing monetary policy with fiscal policy. Thatcher imposed those free-market reforms to the supply-side whereas Keynes is all about demand. The economic decline begun before oil crises and stagflation was precisely the consequence of Keynesian economics.;)

[Nexus6]

We can deal with market failures, for example global warming is the biggest market failure of them all.

Global warming is no market failure as there was no market for climate or air. Air was free, nobody had to pay anything for it as air was declared to be a common asset owned by nobody and controlled only by the state. And like in case of every asset that is not owned by somebody, humans tried to exploit it to the max without paying attention to the limit of the ressource. And the few leading politcians who in their function as manager of "common assets" were responsible for the quality of the air for decades did not see the catastrophe coming or they intentionally ignored it and the results are known. As a countermeasure humankind only very recently tried to establish a market for air by introducing CO2 certificates in order to stop global warming from progressing further. They did so realizing that only a market with private ownership and competition can ensure effective usage of a resource - and that includes the occurance of market failures, because even with them factored in, the market still works much more efficiently than any other alternative.

Let me once again repeat what I said earlier, nobody is realiably able to identify market failures before all others do. But that is exactly the skill central bankers in the US and the UK assume they have. A case of irrational hybris.

[Nexus6]

http://www.ft.com/cms/s/3ef969a2-73ca-11db-8dd7-0000779e2340.html

Robust eurozone growth outpaces US again

Published: November 14 2006

Eurozone growth slipped in the third quarter but outpaced the US again and still showed a robust underlying performance by the 12-country region. Gross domestic product rose by 0.5 per cent in the three months to September, extending an exceptional growth spurt in the first half of the year, according to Eurostat, the European Union’s statistical office. That was slightly lower than expected, dragged down by a poor performance in France, where the economy stagnated unexpectedly....The latest figures also encourage hopes that European economies will continue to grow even as the US slows. The US economy grew by 0.4 per cent in the third quarter, hit by housing market woes.

[jef]

I do not see it as a competition between the EU and the US or any other countries - why should it be? After all, the EU needs strong US growth and vice-versa.

[pricemazda]

Thatcher was not Keynesian. The credit boom or 'boom and bust' business cycle was supplied by loose monetary policy. Oil revenues are extremely marginal as a proportion of GDP. Thatcher is mainly associated with the structural 'neo-classical' reforms of the goods and labour markets. It took over a decade for these reforms to materialize into lower unemployment and higher GDP growth and eventually higher real income. Most countries have subsequently undertaken similar reforms, especially the Nordic countries.
But when she came into office, Britian was struggling with mass unemployment and falling GDP. Maybe you are too young to remember this. I do although I also admit she made mistakes such loosen monetary policy you were referring to.

Thatcher was Keynesian, she also increased public spending every year she was in office!!! She also cut taxes during a recession (classic Keynesian economics) to boost demand. A she deregulated large sections of industry and business to boost demand. She did this because of her tight restrictions on the money supply with extrememly high interest rates, she boosted demand at a time of little monetary growth. She was a Keynesian by practice, Monetarist by rhetoric.

And Monkey, I too lived through the Thatcher years, and only economists who foolishly believe in the old orthodoxy of classical economics think her record was good.

Anyway, everyone is a Keynesian now, if you believe in the concept of market failures then you are a Keynesian. Keynes also revolutionised economics, as before him, there was no concept of Macroeconomics and the idea of managing the economy.

[jef]

Britain's current mix of high growth/low unemployment owes a great deal to Thatcher's free-market policies and supply-side reforms. Like it or not.

[Mercutio]

only economists who foolishly believe in the old orthodoxy of classical economics think her record was good.Rubbish! She is almost universally credited with turning Britain's economy around. Even her Labour opponents did not reverse her revolution once they gained power.Anyway, everyone is a Keynesian nowNo - everyone is laissez faire now.if you believe in the concept of market failures then you are a Keynesian.That is not the definition of Keynesian economics!

[pricemazda]

Monkey, do you actually know anything about Keynes or classical economics.

In classical economics there is no such thing as a market failure. If you are a classical economist you believe the market is self-correcting and the best course of action during a recession no matter how severe is to do nothing.

Whereas Keynes argued "in the long run we are all dead", meaning within the market are unstable forces which need to be managed otherwise the market collapses under its contradictions.

Thatcher boosted public spending every eyar she was in office. Everyone isn't laissez faire at all, everyone is still Keynesian.

America operates a Keynesian budget, as does the UK.

[jef]

In classical economics there is no such thing as a market failure. If you are a classical economist you believe the market is self-correcting and the best course of action during a recession no matter how severe is to do nothing.

Classical economics is an economic theory. Make the distinction with the real life in which, of course, some market failures do exist. We all know that. It does not mean we are Keynesian. Keynesianism died with the stagflation of the late seventies and eighties.

everyone is still Keynesian...

As you should know, budget deficit cannot exceed 3% of GDP in the EU - cfr the Maastricht Treaty.

[pricemazda]

America has been following a Keynesian economic policy for years, expanisionist budgets during economic slowdowns, tax cuts during slowdowns.

The fact is without Keynes the very concept of 'managing' an economy wouldn't have happened.

Keynes believed as has been proved right, that capitalism left unchecked will collapse.

[Nexus6]

So why did we see the IT bubble burst then in 2001 and are soon to witness the bursting of the housing bubble if Keynesians are so capable to foresee market failures? In reality they are in fact very bad at it and are often creating and fueling those bubbles. We would probably be better off without them doing anything.

[pricemazda]

because in the long run we are all dead.

[Mercutio]

There is so much crap on this thread. The Eurozone is not booming. Describing growth of 2 to 2.5% as a "boom" is indulging optimism beyond credibility. And Pricemazda's view, that mere possession of a fiscal policy is proof positive of a new Keynesian consensus, demeans the economist himself (what of the rest of his theoretical model?) and is grossly inaccurate as Keynes's interventionist economics are definitely not in vogue in Europe or anywhere else. Indeed if any consensus is emerging it's that market economics and economic liberalism are more successful. Thatcher's experiments with pure monetarism may have been abandoned but her liberalising policies and faith in the market are being copied everywhere in Europe. Privatisation is merely the most obvious example.

[Fabb]

There is so much crap on this thread. The Eurozone is not booming. Describing growth of 2 to 2.5% as a "boom" is indulging optimism beyond credibility.

During the first and second quarters of 2006, the growth of the Eurozone was closer to 4%.
It qualifies as a boom and you know that.

[Mercutio]

During the first and second quarters of 2006, the growth of the Eurozone was closer to 4%. It qualifies as a boom and you know that.The annual GDP growth forecasts (ie including quarters 1 and 2) for the major Eurozone economies are in the range 2 to 2.5%. I think that's encouraging given the years of stagnation beforehand - a modest recovery - but I don't think it's enough to be called a "boom". Britain's economy is forecast to grow at 2.5-3% but I wouldn't call that a boom unless it's sustained growth at 3%+.

[Fabb]

The annual GDP growth forecasts (ie including quarters 1 and 2) for the major Eurozone economies are in the range 2 to 2.5%.

That's a lie.

Eurozone 2006 GDP growth expected at 2.7%

Wednesday, November 15, 2006 12:38:29 PM ET
ING Financial Markets

LONDON, November 15 (newratings.com) – Analyst Erik Sonntag of ING Financial Markets expects the Eurozone to post its GDP growth at 2.7% for the current year, marking three successive quarters of above-potential growth.

In a research note published this morning, the analyst mentions that according to the flash estimate of the Eurostat, GDP growth in the Eurozone rose 0.5% sequentially during 3Q06, which is marginally above the potential. The Eurozone has witnessed a robust start to 4Q06, in view of the economic sentiment indicator having reached the highest level in five years during October, the analyst says. ING Financial Markets believes that the GDP growth in the Eurozone would be above potential in 4Q06 as well.

[jef]

The consensus is indeed in the range 2-2.5% in the euro area and this cannot be referred to as a "boom". It is just close to the long-term average growth rate.

[Fabb]

The consensus is indeed in the range 2-2.5% in the euro area

It's not.

http://www.economist.com/images/20061118/TAB1.gif

Besides, the data for the 3rd quarter are going to be revised upward. I'll be there when it happens within a month.

[jef]

Fabb, yes indeed, in the range 1.9%-2.6%. ;)

[austin356]

America has been following a Keynesian economic policy for years, expanisionist budgets during economic slowdowns, tax cuts during slowdowns.

The fact is without Keynes the very concept of 'managing' an economy wouldn't have happened.

Keynes believed as has been proved right, that capitalism left unchecked will collapse.




HAHAHAHAHA. The most successful economy of the second half of the 20th century, was one in which the government didnt even compile economic statistics.

Left unchecked collapse? LOL


Oh, and the budget expansions, and tax cuts would have occurred without a recession and were all political.
And Keynesian micromanagement died in America 27 years ago.
I would know since I am in the business and follow every fed statement, report, speech, and decision.



And booming? Over 4% for developed and over 8% for undeveloped nations is booming, anything less is just at grade growth. Dont get me wrong, 2% is good news, especially with little population growth. Europe growing at 2% adds more production in a year than India does when it grows at 8%.

[Fabb]

Fabb, yes indeed, in the range 1.9%-2.6%. ;)

:doh:

You can't read this chart, can you ?

Never mind. Time will tell.

[Mercutio]

That's a lie.Ahem....

http://img.photobucket.com/albums/v496/Fatmonkey/Economist.gif

The major Eurozone economies are forecast for annual GDP growth of 2 to 2.5% exactly as I said - except for Italy which can't even manage 2%. That's not a boom. France's growth in Q3 was 0%. Admittedly that follows high growth in Q2 but no kind of boom has growth for even one quarter at 0%. I don't consider Britain to be booming even though the economy grew at an annualised rate of 2.8% in Q3 (and over the last four quarters) and is forecast for 2.6% for the year. Other major developed world economies on that chart such as the United States (3.3%), Canada (2.8%), Australia (2.7%), Japan (2.7%) are also forecast to grow faster than the major Eurozone economies in 2006.

[Fabb]

What's wrong with you ?
The Euro zone is not reduced to France, Italy or Germany.

Is that what people believe ? The chart has a line that refers to the Euro zone and it reads 2.6 percent in 2006.

Who cares about the details ? Of course, some members have a higher growth (Spain, Ireland, Finland, Greece, Austria... ) than others.

In any integrated economy, I guess that some regions grow faster than others.

It's a fact that the US economy is slowing down, and the economy of the Euro Zone is gaining momentum. If you don't like the world "booming", that's your problem. What's important is the current growth rate with respect to the potential growth rate. The Euro Zone is doing more than OK.

[jef]

VW has announced today that they fire 4,000 jobs in Brussels - where I am currently based.

Do not tell these people the euro economy is "booming".

PS: Monkey is one of the most valuable and respected forumer.

[pricemazda]

He isn't he is like a dog with a bone, and never EVER wrong. He will carry on arguing until everyone is dead just to prove he is more intelligent than everyone combined.

You obviously haven't read one of his 'Economist based sessions'.

[CHapp]

:previous: I beg to differ.

[austin356]

(Germans)

How does it feel not to be able to find a job?

The Stats are saying Europe's largest economy needs to pull an Ireland. Yes, it can be done. And yes you can have 6% GDP growth.

[Fabb]

By Sandrine Rastello

Nov. 22 (Bloomberg) -- French consumer spending on manufactured goods rose in October after unemployment fell to a five-year low.

Such spending, which accounts for about 15 percent of the economy, increased 0.9 percent from September, when it dropped a revised 2.5 percent, Insee, the Paris-based national statistics office, reported today. Economists expected a 1 percent gain, according to the median of 27 estimates in a Bloomberg survey.

Consumers have sustained the economy's expansion as investment slowed and exports fell, partly because unemployment dropped to 8.8 percent in September, the lowest since October 2001 and oil prices slid. Even after recording no growth in the three months through September, Europe's third-largest economy this year is headed for the fastest expansion since 2000.

``Consumption should stay strong through Christmas,'' said Paul Guest, chief European economist at Moody's Economy.com, a London-based consultancy. ``Consumer confidence has gone up from last spring, unemployment is down, oil prices have gone down. There's a little more money to spend there.''

The spending increase was led by a 1.1 percent gain in car sales and a 1.5 percent advance in textile and leather goods. French car and light-truck sales jumped 12 percent last month, the national carmakers association said.

The September spending figure was revised from a decline of 2.7 percent.

Tax Cuts

Falling oil prices may be helping consumers, who also will see the first effects of an income-tax reduction in the first quarter. Crude has declined about 25 percent from the record $78.40 a barrel on July 14. Crude oil for January delivery traded at about $60 today.

Prime Minister Dominique de Villepin's government geared its 2007 budget toward consumer spending before presidential elections. The plan includes almost 6 billion euros ($7.7 billion) in tax cuts, rebates and measures to buoy spending.

The consumer may continue to underpin growth in the coming quarters, said Nicolas Sobczak, a Paris-based economist at Goldman Sachs Group Inc.

``The situation could turn more problematic for France at the end of 2007,'' Sobczak said. `` By that time the support from the housing market will have disappeared.''

After rising more than 10 percent a year since 1999 and more than 15 percent in the past two years, French house prices are likely to flatten out by the end of next year, he said. The strength of the market has helped push spending on home- equipment goods, which last month surged 19 percent from a year earlier.

To contact the reporter responsible for this story: Sandrine Rastello in Paris srastello@bloomberg.net

[Mercutio]

What's wrong with you? The Euro zone is not reduced to France, Italy or Germany.But in post 81 I specifically referred to "the major Eurozone economies" (ie Germany, France, and Italy) and gave their annual growth forecast as in the range 2 to 2.5%. I was right. That was not a lie (as you accused me in post 82). It was factually correct aside from Italy which is forecast for slower growth at 1.7% in 2006.It's a fact that the US economy is slowing down, and the economy of the Euro Zone is gaining momentum. If you don't like the world "booming", that's your problem. What's important is the current growth rate with respect to the potential growth rate. The Euro Zone is doing more than OK.Like I said before the improvement is encouraging given the years of stagnation beforehand - a modest recovery - but I don't think it's enough to be called a "boom". What about the fact that other developed economies such as Britain, United States, Canada, Australia, and Japan are all growing faster? Are they all "booming" too? And gloating over the US does seem a little premature given that the US is forecast for 3.3% growth in 2006 - significantly more than the Eurozone.

[Mercutio]

He isn't he is like a dog with a bone, and never EVER wrong. He will carry on arguing until everyone is dead just to prove he is more intelligent than everyone combined.:slob:You obviously haven't read one of his 'Economist based sessions'.I don't see what's wrong with the Economist. It's one of the most respected publications around. Its views are centrist and mainstream - hardly anything to get upset about - unless of course your own views are somewhat marginal or extreme.:previous: I beg to differ.:tup:PS: Monkey is one of the most valuable and respected forumer.:bowtie:

[Fabb]

10.25.2006, 06:00 AM

MUNICH (AFX) - The Ifo institute said its business climate index for Germany rose to 105.3 in October from 104.9 in September, beating expectations and indicating the country's economic expansion will continue into next year.

Economists polled by AFX News had expected the index to decline to 104.5.

The business assessment index, which measures current conditions, grew to 111.8 in October from 111.3 in September. Economists were looking for a more modest increase to 111.5.

The forward-looking business expectations index improved for the first time in three months, rising to 99.2 from 98.9 and beating economists' expectations for a decline to 97.9.

'These survey results indicate that the economic expansion will continue despite the increase in VAT next year,' Ifo president Hans-Werner Sinn said.

Businesses in the manufacturing sector were more confident about the six-month outlook than in September, Sinn said, adding their export expectations were also more favourable.

In the construction industry, the business climate improved minimally as companies were slightly more positive about the current situation, while expectations about the next six months were similar to last month.

In wholesaling, businesses were clearly more positive than in September - both with regard to the current situation and the business outlook, Sinn said.

Retailers were also more upbeat about their current business situation, though their six-month outlook was 'clearly more pessimistic'.

[Mercutio]

Meanwhile Greman growth has slowed to err.... 2 to 2.5%: ;)
http://news.bbc.co.uk/1/hi/business/6176392.stm

[Nexus6]

2.5% growth for 2006 is not a slowdown but a significant acceleration over the 0.9% Germany reported in 2005. You mixed that up with the Q3 numbers which were down from Q2. But Q2 was an unusually strong quarter due to the football world cup and nobody expected that performance to continue.

[Nexus6]

And gloating over the US does seem a little premature given that the US is forecast for 3.3% growth in 2006 - significantly more than the Eurozone.

You see, the very nature of a downturn is that forecasts have to be constantly revised to the downside (US government just cut the forecast to now 3.1%*). And there are plenty of dangers (too much liquidity, high wages, housing) for the US economy which make it believable to many market participants that this trend of surprises to the downside will continue in 2007 and lead to a hard landing instead of the hoped for soft one. In the Eurozone in contrast numbers for the most part come in better than forecast which is a typical sign for an upturn. I.e. the IMF has upgraded German growth forecast for 2006 from 2.0 to now 2.5%**.

*= http://www.fin24.co.za/articles/companies/display_article.aspx?Nav=ns&lvl2=comp&ArticleID=1518-1783_2034160
**= http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=1164127661-18a80f08-31283