European Politico-economics QA Mega-thread - Page 419

The euro zone economy grew at the same pace in the last quarter of 2015 as in the third because industrial output fell in December, data showed, marking a slowdown from the first half of the year and adding to arguments for further monetary easing.

The European Union's statistics office Eurostat said gross domestic product in the 19 countries sharing the euro rose 0.3 percent quarter-on-quarter in the last three months of last year, the same as in the July-September period and as expected by economists polled by Reuters.

Year-on-year, the euro zone economy expanded 1.5 percent, also as forecast by economists.

No detailed breakdown was available with Eurostat's first estimate, but separate data showed euro zone industrial output fell 1 percent month-on-month in December for a 1.3 percent year-on-year fall.

Economists polled by Reuters had expected a 0.3 percent monthly rise and a 0.8 percent annual increase in production.

Economists said such GDP growth rates would not be enough to generate enough inflationary pressure to take price growth up to the European Central Bank's target of below, but close to 2 percent annually from 0.4 percent in January.

"We continue to think that further monetary easing is required, with further policy rate cuts on the cards from March onwards," said Nick Kounis, economist at ABN Amro in a note published before the data release.

"However, more fiscal stimulus – in the form of public investment – in countries that have room for maneuver, and structural reform more widely – is also needed to support monetary policy," he said.

On February 12 2016 17:11 odeSSa wrote:
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https://www.rt.com/news/332179-erdogan-refugees-syria-eu/

Eurogroup chairman Jeroen Dijsselbloem rejected calls for banking union regulations to be loosened after weeks of falling bank shares, saying new European bail-in rules had caused investors to look "more critically" at risks born by banks.

Speaking on Dutch radio on Saturday, Dijsselbloem, who is also the Dutch finance minister, said stricter rules imposed in the wake of the 2007 financial crisis that would restore confidence in banks.

"We now have much stricter rules for who pays the bill if banks go wrong, and it's not the taxpayer," he said. "For that reason, investors are looking much more critically at banks, and that is leading to a correction on equity markets."

The Stoxx Eurozone Banks Index .SX7E has fallen more than 25 percent since the beginning of the year, prompting policymakers including Bank of Italy governor Ignazio Visco to call for a more gradual introduction of rules that place the burden of propping up failing banks on investors.

But Dijsselbloem, who chairs meetings of euro zone finance ministers, said this would be "the worst possible thing to do."

"We must first make the banking union stronger in my view," he added. "Capital requirements should go up further in coming years. That would strengthen confidence in banks."

Dijsselbloem also said Europe's economic outlook remained cautiously positive despite a recent slew of indicators pointing to an economic slowdown, and bad economic news from China and the United States. He warned that talk of crisis risked becoming a self-fulfilling prophecy.

"Since 2008 we have been sitting continually in crisis mode in our heads even when you can see from the real economy that we are emerging from it," he said. "Banks are much stronger, balances are much stronger and they have been cleaned of bad portfolios."

Low profitability and close to 1 trillion euros worth of non-performing loans, a legacy of Europe's crisis, are also weighing on the sector but banks are now well capitalized after years of regulatory pressure to build up their buffers.

"[Eurozone banks] are in a much better position today than they were at the height of the debt crisis in 2011 and 2012," European Central Bank board member Bernard Coeure told the Rheinische Post newspaper on Saturday.

"Thanks to the banking union they are now much more resilient."

European Council leader Donald Tusk said on Monday he hoped the UK and other EU nations would agree on a deal to keep Britain in the European Union at a meeting in Brussels at the end of the week.

Asked after a meeting with French President Francois Hollande in Paris whether he thought a deal was possible at the Brussels summit, Tusk said: "I hope so."

British Prime Minister David Cameron is hoping to return from a summit of European leaders on Thursday and Friday in Brussels with a package of reforms that he can take to the British people in a referendum on whether to remain in the EU.

British and EU negotiators have already broadly agreed much of a reform package, but tricky political issues, notably on migration, are still outstanding.

The European Union's trade surplus with the rest of the world surged almost five-fold last year against 2014 because of a sharp drop in imported energy prices, data showed on Monday.

The European Union's statistics office Eurostat said the trade surplus of the 28-nation bloc in 2015 was 64.2 billion euros against 13.3 billion the year before, with imports rising only 2 percent and exports jumping 5 percent.

While in 2014 the EU's trade deficit in energy was 334.8 billion euros, in 2015 it shrank to only 243.5 billion because of tumbling prices of crude oil and gas.

Imports from Russia, Europe's main supplier of energy, fell 25 percent in 2015 against 2014, but exports to Russia fell even more -- 28 percent -- partly because of sanctions imposed on trade with Moscow after its annexation of Crimea.

The trade deficit with another EU energy supplier Norway fell to 25.4 billion euros from 34.9 billion in 2014.

The EU increased its trade surplus with its biggest trading partner, the United States, to 123.3 billion euros last year form 104.5 billion the year before but its trade deficit with China jumped to almost 180 billion from 137.5 billion.

Germany remained Europe's biggest exporter with a trade surplus of 251.9 billion euros, up from 216.5 billion in 2014. Of that total 179.5 billion came from outside the EU.

Britain had the biggest trade deficit in the 28-nation bloc last year, rising to 149 billion euros from 139.5 billion the year before.