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Archive for the category “Economics”

Investing in property in Europe were slow at the beginning of the year

Investments in real estate in Europe have slowed significantly in the first quarter of 2012. The volume of deals for the period was 17.7 billion against 20 billion in the first three months of the last year and 26 billion in the fourth quarter of 2011. Overall, however, recent quarters have high activity of investors as buyers and sellers seek to reach agreement before the end of the year.

According to CBRE data the volume of transactions in Europe dropped by 18% in the first quarter compared to the same period last year and 31% from the fourth quarter of 2011. The trend is only the Scandinavian region, where volumes increased by 50% compared with the first three months of last year.

Markets in the region are favorable for a stable financial situation and better prospects for economic growth, experts explain the company.

Sweden continues to be a key objective for many investors, and increasing interest of foreign investors in other Scandinavian countries.

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Gasoline prices in Europe

Eastern Europe is catching their Western counterparts in prices of motor fuels, finds study of the British website Drive Alive.
The reduction of the difference, however, is just beginning, and so far the largest amounts of gas stations left Norwegians – per 1.86 euros per liter for unleaded A95, although their country is one of the world’s largest oil exporters. Quite a bit cheaper to fill in Italy: € 1.83 per liter. Third costliness ranks Denmark with 1.77 euros per liter. From the Western Europe, gasoline is cheaper in Spain: € 1.38 per liter.

Eastern Europe, however, is quickly reducing the gap with its Western neighbors. In Poland, people already pay 1.47 euros per liter, while in Latvia and the Czech Republic – per 1.48 euros. In Slovenia, prices rose by 12% over the past two months, to 1.53 euros per liter.

In Bulgaria, a liter of gas A95 is around 2.69 lev (€ 1.35) and the prestigious A 98 – by 2.85 lev / l (1.43 euros). According to the Bulgarian Petroleum and Gas Association, if it be found to the Iranian crisis in oil supply, we can expect prices to jump 3 lev per liter.

“Gazprom” promised lower prices for Europe in 2012

Russian gas monopolist “Gazprom” predicts a slight decrease in the price of natural gas to European consumers in the first quarter of 2012, said the company’s chief Alexei Miller, During a visit to the Serbian town of Pancevo, for opening of gas storage, together with “Srbijagas” he conceded to reporters slightly lower prices, without stating a specific figure.

“In 2012 the export of “Gazprom “in the European markets will be higher than this year, Miller predicted by stating that this will happen at the expense of the quantities passing through already placed in service pipeline “Nord Stream”.

In November, European consumers were paying 446 dollars per 1,000 cubic meters of gas and exported by the company amounts to the European market amounted to 152 billion cubic meters. Earlier this month the management of the company forecast that the growth will be 8 percent to 164 billion cubic meters.

Serbian state gas company and “Gazprom” discovered underground gas storage within the future gas pipeline “South Stream”. Repository in the northern city of Banat yard has a capacity of 450 million cubic meters of gas. It will be managed by a joint venture established in 2009, of which “Gazprom” holds 51%, and “Srbijagas” 49%.

It is expected that the project “South Stream” to be completed by 2015. By it Russian gas will pass from Russia under the Black Sea to Bulgaria, Serbia and Hungary and Western Europe.

IMF chief for Europe resigned “for personal reasons”

The director of the European Department in IMF, Antonio Borges, resigned in a difficult period for the region when EU leaders are struggling with debt crisis in the euro area.

Ronaldo Borges, who held a managerial position in the IMF only a year, explained his leaving as “personal reasons”. Borges previously held the position of Chairman of the Board of Directors of “Goldman Sachs” in London. Last month, Borges was forced to renounce his words, that the IMF can redeem the debts of Spain and Italy to help countries get out of the crisis.

“Antonio Borges led the unit of the IMF in an extremely complex for the eurozone members period,” commented the leaving of Borges, the head of IMF Christine Lagarde. She added that Borges has helped “tremendously the suffering from the crisis euro zone.”

In his place comes the current director of strategies, policies and assessments in the IMF Reza Moghadam.

“This means that the IMF intends to play a more important role in Europe”commented the change in the leadership of the European Department the fundthe former representative in IMF Esvar Prasad, who is now in Bruking Institute in the USA. “Reza Mogadam is the person who may hold a more aggressive policy”, he said.

IMF plays a key role in resolving the crisis in the eurozone together with the European Commission and European Central Bank. The volume of financial assistance provided to countries in the EU depends on these three organizations.

EBRD: Eastern Europe must be prepared for another crisis

For the second time in three years the European Bank for Reconstruction and Development (EBRD), talks with bankers and politicians from across Europe in an attempt to prevent the drying up of capital flows to subsidiaries of Western banks in Eastern Europe, writes Bloomberg.

The decision will be different from the Vienna Initiative – a commitment in 2008 of the largest European banks to support Eastern European subsidiaries after the collapse of Lehman Brothers, said Piroska Nagy, Advisor to the EBRD. Agreement can be reached within a few weeks, she said.

“What is needed in the current situation is strengthened coordination,” said Nagy. “Otherwise we will witness the negative effects of unilateral narrow decisions of individual governments,” she said.

A month ago, European leaders agreed that by the end of June 2012 European banks need to raise their capital adequacy ratio to 9%. Since about three quarters of the banking sector in Eastern Europe is in the hands of Western banks, including UniCredit and Erste Group Bank, the financing of local Eastern European subsidiaries of these banks is likely to be frozen, warns EBRD.

According to the European banking regulator (EBA) European banks need 106 billion of fresh capital. Italian UniCredit, the largest bank in Eastern Europe, has to raise 7.38 billion. Erste, which owns the second largest banking group in the region needs 750 million euros.

Debt crisis may limit demand for Eastern European exports and lower capital flows to the region, in 2008, says the annual report published today by the EBRD.

“Unfortunately, the region should prepare for another crisis,” said the chief economist of EBRD Erik Berglof. “If the crisis gets out of hand, financial integration model between Western and Eastern Europe could be threatened.”

Economies in Eastern Europe are in better shape than in 2008 and are less dependent on external financing. Eastern banks balance sheets are generally in better condition. However, due to high levels of bad loans that have not yet reached its peak, additional capital will probably be needed.

Shocks in Western Europe pose a serious risk of worsening the already not very optimistic outlook for Eastern Europe, said the EBRD. Most vulnerable to the looming credit crunch are Hungary, Slovakia and Bulgaria, followed by Croatia, Slovenia, Romania and Poland, the bank warned.

Moody’s Investors Service, which today lowered its forecast for the Polish banking sector to negative, expected “over the next 12-18 months the pressure on the sector to gradually intensified, adversely affect the asset quality, liquidity and profitability.”

Western banks may withdraw from Eastern Europe about 13 billion euros, Peter Attard Montalto calculated, economist at Nomura International Plc in London.

China wants to save Europe again

New request from China to help Europe was made the day on which European leaders gathered for the second three days meeting, which had to be sought the debt crisis and problems in Greece.

Emerging market economies and China in particular are reluctant to participate in the European Support Fund through the International Monetary Fund (IMF). It said an unnamed source “close to decision makers in Europe,” quoted in “China Daily”.

According to this source, “the consent of the emerging market economies may be included in the final document of the summit of European leaders’ forum in Brussels if they decided to open up that fund for the participation of foreign investors – both private and public. Formal confirmation of this information was not received.

The capacity of the European Financial Stability Fund is now 440 billion dollars. It is believed that in terms of markets that this is not enough for the Fund to cope with the situation, if the crisis infect a large economy such as Italy. Recently emerged ideas fund be increased to 1 trillion euros. Its fate would have been a major subject of discussion at a meeting of leaders of the eurozone.

Reuters said before the meeting of leaders of the euro area, the chances to reach an agreement on measures against the debt crisis appear slim. EU expressed its readiness to support banks, but does not indicate a specific figure for their recapitalization, said in the draft of the meeting, told Reuters. “New York Times” also predicts failure of the meeting.

Discussions to reach a deal on the euro become complicated, including significant restructuring of the Greek debt, pouring new capital in European banks and increasing the rescue fund so as to prevent financial panic in Italy and also in Greece and Portugal, the publication notes. Meanwhile, shortly before the summit, the German Parliament Chancellor Angela Merkel supported the project. Lawmakers of the Bundestag have received a secret report which says that the future of Greece is a bleak.

Europe and the euro are on the edge

Europe and the euro are on the edge, warned one of the initiators of the European Common Market and a former European Commission president Jacques Delors in an interview with Belgian newspaper Le Soir and the Swiss Le Temps, quoted by RIA “Novosti”.

86-year-old Delors said that the meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on Tuesday did not lead to real solutions for the withdrawal of euro area debt crisis.

“Let’s open our eyes – the euro and Europe are on the edge. I think the choice is simple: either the Member States would agree to closer economic cooperation, which I’ve always wanted, or will provide additional powers to the Union”, he said, referring to the European Union.

In his second of the two options was rejected by a majority of the 27 Member States and remains the first.

Delors also believes that the refusal of closer economic cooperation with the community threatens disintegration.

After meeting on Tuesday Merkel and Sarkozy proposed to establish a common economic government for the euro area member states, led by President of the European Council, Herman Van Rompuy.

In addition, they offer an additional tax on financial transactions, but said it considered premature to introduce the idea of ​​bonds, common to the euro area.

The fate of the euro area is in the hands of Germany

The fate of the euro is in the hands of Berlin, writes, “Daily Telegraph”. The decision of the Italian Parliament to adopt measures to cut government spending, less calm the market, but the crisis in the euro area is not over, says the publication cited by Cross .

British Prime Minister David Cameron said that eurozone countries must take urgent measures, not just react to what happens in the market.

First, it is vital that the eurozone to reduce its budget spending. Moreover, economists believe that the package of aid to countries that have suffered most from the crisis should be increased to 2 trillion. euros, as this will calm the markets.

But the essence of the problem is that the eurozone as a whole and Germany in particular, refuse to recognize that only the creation of monetary union can lead to certain results.

German economy is the largest in Europe. Now stands before her selection. Firstly, it can insist on a fundamental integration of the area where the EU will control budgets and taxes, as markets are concerned only the situation in some countries but not in the eurozone as a whole.

Another point is that she just might leave the eurozone.

The third option is Germany just waiting for the next financial crisis. Ireland, Greece or Italy will be able to solve their problems. Now everything is in the hands of Germany, said the publication.

Airlines in Europe will reduce greenhouse gas emissions with biofuels

European airlines, manufacturers of bio fuels and the European Commission signed an agreement to produce two million tons of eco-fuel for aircraft by 2020, which hope to reduce their environmental footprint, says the online edition EurActiv.

The pact was signed despite the burst debate about how these green fuels are a reality. Participants in the project were signed Airbus, airline Air France-KLM, British Airways and Lufthansa, as well as producers of bio fuels Neste Oil.

Because the debate by first generation bio uels, participants in the agreement plan to focus on more sustainable crops. The company such as Lufthansa are planning to use the wild plant jatropha in the choice of crop to test bio fuel in the mix for flights between Frankfurt and Hamburg for six months after obtaining the certification.

Agreement with Nestle provides for the production of the mixture to use palm oil, but company representatives consider replacing it with other sources. American company Honeywell plant Kamelini used for business flights from North America to Europe.

“The plant is alternated with a rotation period of wheat and weeds replaced during the fallow season, so it does not displace food production,” the company said. “We do not want to compete with crops grown for food for us This is the main focus. ”

Willingness of airlines to use bio fuels as a way to reduce pollution from jet fuel are often attacked because of the use of food crops such as palm oil, which can be used for food.

Earlier in June a report of 10 international institutions including the World Bank and World Trade Organisation has warned governments to be more cautious policies in support of bio fuels as they affect global food prices.

Activists from environmental group “Friends of the Earth ‘claim that the plant Kamelini nevertheless compete with food crops, and for making jet fuel from jatropha released large areas of arable land in Africa and India to fuel quantities required for aviation industry.

“World Bank and the OECD recommended the withdrawal of support for bio fuels, but representatives of the aviation industry continues to insist on its position,” said Robbie Blake from “Friends of the Earth” in Europe. “It would be irresponsible to raise huge amounts of crops for bio fuel for flights, instead of feeding the hungry,” added he.

Meanwhile, British Airways developed fuel waste, which is hoping to fill their planes by 2015.

Southeast European countries improve conditions for business

Southeast European countries improve conditions for business in response to the economic crisis and trying to become part of European Union. These are the findings of this year’s study of World Bank Doing Business conditions for entrepreneurs in several countries in the region. It includes several cities in Serbia, Macedonia, Albania, Bosnia and Herzegovina, Kosovo, Moldova and Montenegro.

The survey did not determine the clear winner among the surveyed cities. Each of them has improved conditions in at least three of the four categories tested – starting a business, issuance of building permits, contract signing and registering property. In addition, costs that are incurred in starting a business in the region fell from 22% to 13% of average income per capita. Decreased by about a month is the time for issuing construction certificate and registering property. The improvement is due to the introduction of the one-stop, dropping some of the procedures, the introduction of electronic systems for the administration and judiciary.

Leaders in various categories are different. However, the authors state that in the Macedonian capital Skopje and Banja Luka in Bosnia and Herzegovina has done most to improve the business environment. It turns out that most easily and quickly earning a construction permit from the Montenegrin town of Niksic, the easier the transfer of property in Chisinau and Balti in Moldova. On the other hand, the most difficult to start business in Pristina, Kosovo, most have problems in registering property in Mostar, Bosnia and Herzegovina, and most difficult is the signing of a contract in the Kosovo town of Prizren. Most problems are entrepreneurs who want to earn a construction permit in Belgrade.

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