Month: March 2012


Monetary data adds to ECB warning signs

March 8, 2012

Monetary

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FRANKFURT (Reuters) – Loans to private sector companies and households in the euro zone fell in December from the previous month, European Central Bank data showed on Friday, adding to signs of a credit crisis in the currency bloc.

The monthly flow of loans to firms dropped by 37 billion euros after falling by 7 billion euros in November.

Euro zone M3 money supply – a more general measure of cash in the economy – grew at an annual 1.6 percent in December, slowing from 2.0 percent in November and below expectations of 2.2 percent in a Reuters poll.

There is a tentative evidence of a modest credit crunch in the numbers with growth of loans to the private sector decreasing significantly, said Holger Schmieding, economist at Berenberg Bank.

These numbers on their own are a reason for further monetary easing. The ECB is still likely to cut interest rates in March, and they will have to revise down their growth forecasts, he added.

(Frankfurt Newsroom; Editing by Catherine Evans)


Morning Briefing: Euro Zone Woes, IMF-Hungary Talks in Focus

March 7, 2012

Monetary

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Central European currencies and stocks will take their cue from moves on euro credit markets and developments in protracted talks on a bailout package for Greece.

Hungarys talks with the International Monetary Fund will likely also grab attention.

The IMF and Hungarys Ministry of Economy are expected to release a jointly drafted assessment of the countrys economy, known as the Article IV report.

In the wake of talks on a credit line from the European Union and the IMF, the Article IV report is an important document for determining terms of the actual IMF loan to the Hungarian government.

OTHER NEWS

POLAND: Poland may not sign the fiscal pact if it divides the EU into a eurozone and non-euro countries, Polish Prime Minister Donald Tusk said on Tuesday.

POLAND: The rift between Polands new Treasury minister and the chief executive of Polish copper-mining company KGHM Polska Miedz SA (KGH.WA), in which the ministry holds a controlling stake, appeared to widen Tuesday.

POLAND: The balance of risks in Polands monetary policy is clearly tilted towards tightening as inflation remains high and economic growth is likely to remain robust throughout 2012, the central banks monetary policy council member Anna Zielinska-Glebocka told Dow Jones Newswires in an interview.

CZECH REPUBLIC: Prague wants to pay EUR1.5 billion rather than a mooted EUR3.5 billion share of an International Monetary Fund pool of cash for the European debt crisis, Czech media reported Tuesday.

CZECH REPUBLIC: Prague wants to pay EUR1.5 billion rather than a mooted EUR3.5 billion share of an International Monetary Fund pool of cash for the European debt crisis, Czech media reported Tuesday.

As the euro-zone debt crisis mounted last year, the 17 countries that share the euro pledged EUR150 billion in bilateral loans to the IMF to be ploughed back into the debt-laden single currency region if needed.

SLOVAKIA: Slovakian Prime Minister Iveta Radicova on Tuesday rejected calls to increase a euro zone bailout fund, saying it would not resolve the blocs debt crisis or calm financial markets. We cant forever keep on increasing the rescue fundits not the way to go, Radicova told a business conference in Bratislava.

HUNGARY: The Hungarian central banks call to leave the key interest rate on hold shows that the four government-nominated, external Monetary Policy Council members took the steering wheel this time around, analysts said. Zoltan Torok, senior economist at Raiffeisen Bank, stressed that the dominant voting behavior was certainly the function of the perceived short-term outlook for Hungary.

HUNGARY: Hungarys prime minister met European Union officials in Brussels on Tuesday in an effort to mend strained relations and win financial backing for his indebted country from the EU and International Monetary Fund.

HUNGARY: Hungarys government fully respects the independence of the countrys central bank, Prime Minister Viktor Orban said Tuesday, despite recent criticism.

ROMANIA: Romanias Prime Minister Emil Boc appointed a new foreign minister on Tuesday, a day after sacking his predecessor over disparaging remarks about street protesters.

BULGARIA: Bulgaria has imposed a four-year ban on fishing for sturgeon on the River Danube and in its Black Sea waters, the farming ministry said Tuesday.