British Manufacturers Remain in Favor of EU membership Despite Sluggish Demand

By Duncan Tift – Deputy Editor, West Midlands for BusinessDesk.com

Read Full Article 

BRITAIN’S manufacturers remain overwhelmingly in favour of staying in the EU, according to new research published today.

Read also: U.K. Unemployment Falls While China Growth Cools: Global Economy

EEF, the manufacturers’ organisation, said the findings of its research showed that 85% of manufacturers in the UK would vote to remain within the EU.
In stark contrast, just 7% would vote to pull out.
The most positive support for staying in the EU comes from companies with more than 250 employees, where 90% would opt to stay in and not a single company would vote to come out.
The figures are in line with the last poll EEF carried out in September 2013 and come in spite of the continued economic problems of the Eurozone.
The current economic climate within the EU remains sluggish and despite recent hopes of recovery, orders placed with British manufacturers is a cause of concern for many SMEs.

Moody’s restores Ireland to investment grade on back of bailout exit

The New York-based credit rating agency elevated Ireland from “junk” status to Baa3 – the lowest investment grade, a statement released Friday read.

Prior to the financial crisis, Ireland held a “triple A” rating, signifying the highest quality and lowest credit risk. The country is now regarded as a lower risk investment by the big three credit rating agencies for the first time since 2011.

Moody’s said the two main drivers for the upgrade were “the growth potential of the Irish economy” and the Irish government’s exit from its three-year economic adjustment program in mid-December 2013.

Moody’s noted that Ireland’s “on-schedule” exit from the International Monetary Fund/European Union support program on December 15 “without a precautionary credit line reflects that the government’s reform agenda stayed largely on track throughout the program, despite weaker than expected domestic and external economic conditions.”

Finance Minister Michael Noonan said the move will help to lower borrowing costs for companies and individuals alike.

“The decision by Moody’s to upgrade Ireland’s credit rating reflects the significant progress that has been made in stabilizing the public finances, restructuring the banking sector and, most importantly, growing the economy and creating jobs,” Noonan said.

Moody’s also changed the outlook for Ireland’s credit rating from stable to positive, noting expectations of a“sustained recovery of the Irish economy” on top of signs that stronger growth will be forthcoming in the rest of Europe “and are increasingly well-entrenched in the US.”

It further upgraded the debt ratings of the National Asset Management Agency to investment grade and its outlook to positive. The agency, whose debt is backstopped by the government, was created in 2009 to tackle the Irish financial crisis and the deflation of the Irish property bubble.

Ireland’s sovereign debt upgrade comes amidst falling unemployment figures and lenders slashing the interest charged on the national debt to 3.5 percent – lower than the cost of loans under the bailout and less than was paid before the debt crisis, according to the Irish Independent.

The only bad news in Moody’s otherwise shiny prognosis regarded sluggish pace for the country’s reform of its banking system. The Irish Central Bank’s drive for banks to ratchet up collection efforts on mortgage and small and medium sized business loans arrears is at present “likely to increase foreclosures, impairing profitability and potentially dampening the housing market recovery.

 

Historic Trade Deal with Europe Moves Forward, Despite US Snooping

The US –EU transatlantic trade deal, will go to a second round of talks in mid- November, but could hit a stumbling block over Germany’s demand for data protection as a condition to signing the treaty.

The EU and US policymakers agreed to hold two more rounds of trade negotiations over the next two months, The Wall Street Journal reports. The first round will take place in Brussels on November 11-15 and cover investment and energy sector trade, as well as address regulatory issues. In December officials will congregate in Washington DC for another round of talks.

After learning about the NSA special surveillance program on more than 80 embassies and consulates worldwide, including German government offices and Chancellor Angela Merkel’s personal cell phone, Germany has pushed for tough data protection goals before the free trade pact is finalized.

US still hasn’t provided any guarantees it will curb spying on its allies.

First talks were held on July 8 in Washington DC.

Originally the second round of talks were scheduled for October 7-11 in Brussels, but were delayed due to the US government shutdown.

The Transatlantic Trade and Investment Partnership (TTIP), which has the potential to boost economic growth by $100 billion per year in reduced tariffs, was agreed on at  the G8 summit in  Northern Ireland in June.

Shortly after, NSA whistleblower Edward Snowden leaked information showing the extent of USespionage on allies abroad. In response, France and other EU members said there could be no trade negotiation unless the US could guarantee it would halt spying operation on EU allies.

The “once in a generation prize” could add as much as about $157 billion to the EU economy, over $125 billion to the US economy and as much as around US$ 133 billion to the rest of the world, UK Prime Minister David Cameron said at the G8 summit. Over 98 percent of EU tariffs would be eliminated under the accord.

President Obama said the ‘economic NATO’, which would be the world’s largest trade agreement, is a priority for his administration and will hopefully be signed by the end of 2013.

EU diplomats traveled to Washington to discuss the NSA spy fallout, but weren’t satisfied with the answers they received, which failed to justify the eavesdropping on EU leaders by the US.

The trade deal could be a vital economic turnaround for the 28 EU members, which are just starting to emerge from recession. In 2012, the EU’s economy was $17 trillion, according to Eurostat.

In the aftermath of extending bilateral trade ties, the deal is due to cover about 50 percent of global economic output, 30 percent of global trade and 20 percent of global foreign direct investment.

On November 1, Germany and Brazil submitted a new draft resolution to the UN General Assembly which calls for an end to excessive electronic surveillance, data collection, and other snooping techniques.

source: rt.com

image: Reuters / Tobias Schwarz

G-20 Inflation Rate Decreases CLICK TO READ

A measure of inflation for the members of the Group of 20 was published for the first time today. According to a group of international institutions, the annual rate of inflation was 3.2% in July and fell to 3.0% in August.

Rates fell in many large developing economies such as China, India and Brazil in addition to the U.S. and the EU. Japan and Indonesia are the only countries whose inflation rate increased in August. The member with the lowest inflation rate was Japan at 0.9% and the highest was India at 10.7%.

If inflation rates continue on a downward trend, central banks will find reassurance in keeping their reactive monetary policies from the 2008 financial crisis intact. While the global economy has been recovering, it is feared that the future U.S. budget policy may set it aback.

What are your thoughts on the G-20 inflation rate? Post in the comment section below!

 

Source: WSJ

Global Update: Retail Sales on the Rise in the EU

Consumer spending may be on the rise in the Euro-zone as indicated by the increase in retail sales this year, and more specifically this August. Sales rose by 0.7% from July but were still 0.3% lower than last year. It is evident that the financial crisis is still luring but these figures indicate a sign of slow but steady recovery.

Consumer spending had been declining since mid-2011. The July and August 2013 figures suggest further recovery in the future. However, retail sales are still below the rates seen before the 2008 financial crisis hit.

Without a doubt Germany has had the fastest growth with Italy notably accounting for its fastest growth in two years. On the other hand, Spain’s economy contracted.

What does the contracting of Spain’s economy signify? Post your comments below!

 

Source: WSJ