Finance Matters

Posts Tagged ‘austerity measures’

Good morning. Here’s what you need to know.

• Asian markets were mixed in overnight trading, with Japan’s Nikkei up 1.1 percent. European shares are modestly lower while U.S. futures point to a negative open.
• German manufacturing increased 1.7 percent in December, outpacing expectations for a 1.0 percent rise. In November, new orders had fallen an unexpected 4.9 percent, worrying economists that Europe’s largest economy could see further weakness. Foreign orders jumped 4.3 percent month-on-month in December, with sales surging 12.3 percent outside of the eurozone.
• Greek leaders have agreed to tentative plans for new austerity measures over the weekend, with cuts expected to total 1.5 percent of GDP. However, politicians delayed today’s 5 a.m. EST deadline, as they hammer out details of the measures. Here’s who gets clobbered if Greece defaults >
• U.S. federal and state governments are close to signing a deal with five of the nation’s largest banks that would end state probes of foreclosure abuse in exchange for write downs and charges. The deal, valued at $25 billion, would require banks to take mortgage write downs, offer homeowner assistance, and take cash penalties. Banks in the settlement include Bank of America, Ally Financial, Citigroup, J.P. Morgan Chase and Wells Fargo. The deadline for states to sign the plan is today. These are the 14 states where homeowners are drowning in negative equity >
• The Indonesian economy expanded by 6.46 percent in 2011, topping economist forecasts and accelerating from a 6.2 percent surge in 2010. GDP grew at the fastest pace since 1996, even as neighboring countries see demand slow as the global economy cools.
• China has banned airlines from taking part in the E.U.’s carbon-emissions trading scheme. The Civil Aviation Administration of China said the program violates rules set out by the United Nations Climate Change Framework Convention and principles and provisions of the International Civil Aviation Organization.
• On Saturday, Mitt Romney won the Nevada caucuses and solidified his lead in the Republican primaries. With 89 percent of precincts reporting, Romney led with 49.7 percent of the vote. Newt Gingrich took second with 21.4 percent while Ron Paul was in third with 18.6 percent of the vote. 
• A new ABC News/Washington Post poll says 50 percent of Americans approve of President Obama’s job performance, the highest reading since spring. Half of Americans say he deserves re-election, with the incumbent leading Mitt Romney 51 to 45 in the poll. 
• The New York Giants beat the New England Patriots in Superbowl XLVI, with a final score of 21-17. The Giants led in the first, but trailed the Patriots through the final minute of the game, when Ahmad Bradshaw scored the final touchdown of the night. A hail mary pass by Tom Brady was unsuccessful in the last seconds. Take a look at what the Superbowl winner means to markets >
• Earnings season continues today with Pioneer Natural Resources and Yum Brands reporting quarterly results. Analysts polled by Bloomberg forecast earnings per share of $1.03 and $0.74 for Pioneer and Yum, respectively. Here’s what we’ve already learned from the largest companies this earnings season >

Bonus: During the Superbowl halftime show, singer M.I.A. flipped the middle finger at NBC cameras.

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Stock markets across Europe are are falling early in the trading session. The Euro Stoxx 50 is down 0.8%.

Britain’s FTSE 100 is down 0.5%.

Germany’s Dax 30 is up 0.5%.

France’s CAC 40 is down 1.0%.

Spain’s IBEX 35 is down 0.8%.

Italy’s FTSE MIB is down 0.6%.

Greek debt swap negotiations made little progress over the weekend and will continue today. Prime Minister Lucas Papdemos set a Monday deadline for the a final deal.  Greece may lose access to future bailout funds if an agreement isn’t reached, which would put the country at risk of a default in the coming weeks and months.

Meanwhile, U.S. futures are also selling off.  Dow futures are down 64 points and S&P 500 futures have dropped 8 points.

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See Also:

• REPORT: Papademos Is Considering Resigning If He Can’t Get Support For New Austerity Measures
• GREECE: WE HAVE JUST HOURS TO STRIKE A DEAL
• Here’s The Real Problem With Getting The Greek Deal Done

Just like old times: Will they get a deal done before the Asian markets open?

REUTERS:

Greece has just one day left to strike a deal with impatient lenders and reluctant political party leaders on a 130 billion rescue plan before the country is pushed towards a chaotic default, its finance minister warned on Saturday.

…

In an apparent warning to Greek political leaders opposing key reforms, Finance Minister Evangelos Venizelos said the patience of European partners and the International Monetary Fund footing the bill for Greece’s bailout was wearing thin.

“There is great impatience and great pressure not only from the three institutions that make up the troika but also from euro zone member states,” Venizelos said after what he called a “very difficult” conference call with euro zone counterparts.

The most remarkable thing about this is the the indifference of the market to all this. We keep trying to imagine what the market would be doing if these headlines had come from last November.

(Via @alea_)

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See Also:

• Emergency Meeting Called In Greece, New Sign Bailout May Be In Trouble
• REPORT: Papademos Is Considering Resigning If He Can’t Get Support For New Austerity Measures
• Why The Core Is Also To Blame For The Euro Crisis

As countries across Europe race to take on austerity measures and cut their debt burden, its getting harder and harder for people to find jobs. And the under-25 age group is being hit the hardest.

The latest data shows that youth unemployment in the EU is staggeringly high at 22.7% and this is clearly taking a toll on the economy.  The total unemployment rate in the EU is a more modest, albeit high, 9.8%.

Now, a report by the European Foundation for the Improvement of Living and Working Conditions (Eurofound), a tripartite body of the Union, has released a new report that shows how much youth without education, employment or training (NEET) costs their respective countries.

The NEET costs to the 21 EU countries included in this report is approximately €2 billion per week, a yearly total of about €100 billion, or 1% of aggregate GDP.

Note: The study has data for 21 countries. Public finance costs include welfare schemes like unemployment benefits child benefits, housing benefits, education-related allowances and others) as well as additional health, welfare and criminal justice expenditure. Public finance costs measures excess transfer – the difference between the total amount of benefits received by the NEET and the benefits received by those in employment. Resource costs include foregone earnings.

Austria

Total resource costs:
€2.88 billion

Total public finance costs:
€0.23 billion

Cost as share of GDP:
1.1%

Source: Eurofound

Belgium

Total resource costs:
€3.44 billion

Total public finance costs:
€0.73 billion

Cost as share of GDP:
1.2%

Source: Eurofound

Bulgaria

Total resource costs:
€0.93 billion

Total public finance costs:
€0.01 billion

Cost as share of GDP:
2.6%

Source: EurofoundT

See the rest of the story at Business Insider

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As Greece’s debt crisis mounted and the country looked for austerity measures, its unwieldy and often corruption-riddled universal health care system became a prime target, with spending cut 13%.

But that has had dire consequences, the New York Times reports.

Public clinics are suddenly overwhelmed, as patients newly unable to afford private clinics flock to them.

At the same time, drug companies are refusing to stock Greek hospitals, which owe them millions and are often out of things as basic as toilet paper; and pharmacies are demanding that even insured customers pay the full price of their drugs in cash, wary of seeing any reimbursement from the government.

“The whole system is a mess right now,” one doctor says. “In a six-hour shift, I am seeing 40 patients, which is ridiculous.”

The overflow is affecting patients’ care—one anesthesiologist reports that breast cancer patients are being forced to wait three months to have tumors removed.

“Waiting that long can be life or death,” she says. Government officials say they’re aware of the problems, and hope to start addressing them next year—even as the law mandates another $915 million in cuts.

This post originally appeared at Newser.

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