Euro Zone Booming !

[AJW]

^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?

[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?

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

[jef]

Originally Posted by Mr D

^ Who needs the Euro Zone?

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]

Originally Posted by lexberg

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]

Originally Posted by 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

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

[pricemazda]

Originally Posted by jef

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]

Originally Posted by pricemazda

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]

Originally Posted by 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.

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.