Thursday, 25 June 2009

Industrial Orders Fall 1.0% in Euro Zone

Industrial new orders down by 1.0% in euro area. Down by 0.5% in EU27.

In April 2009 compared with March 2009, the euro area1 (EA16) industrial new orders index2 fell by 1.0%. In March3 the index decreased by 0.2%. In the EU271 new orders declined by 0.5% in April 2009, after dropping by 0.5% in March3. Excluding ships, railway & aerospace equipment4, for which changes tend to be more volatile, industrial new orders decreased by 0.9% in the euro area, but increased by 0.3% in the EU27.

In April 2009 compared with April 2008, industrial new orders decreased by 35.5% in the euro area and by 35.0% in the EU27. Total industry excluding ships, railway & aerospace equipment4 dropped by 35.3% in the euro area and by 33.8% in the EU27.

Tuesday, 23 June 2009

EU27 Tax Ratio at 39.8% of GDP in 2007

Steady decline in top personal and corporate income tax rates since 2000

The overall tax-to-GDP ratio1 in the EU272 was 39.8% in 2007, a slight increase from 39.7% in 2006. The EU27 tax ratio, which stood at 40.6% in 2000, fell to 38.9% by 2004 and then started to rise.

The overall tax ratio in the euro area2 (EA16) was 40.4% in 2007, and also rose slightly from 40.3% in 2006. Since 2000, taxes in the euro area have followed a similar trend to the EU27, although at a slightly higher level.

In comparison with the rest of the world, the EU27 tax ratio remains generally high, exceeding those of the USA and Japan by some 12 percentage points. However, the tax burden varies significantly between Member States, ranging in 2007 from less than 30% in Romania and Slovakia (both 29.4%) and Lithuania (29.9%), to a little less than 50% in Denmark (48.7%) and Sweden (48.3%).

Since 2000, significant changes in tax-to-GDP ratios have taken place in several Member States. The largest falls were recorded in Slovakia, where the overall tax burden dropped from 34.1% in 2000 to 29.4% in 2007, and Finland (from 47.2% to 43.0%). The highest increases were observed in Cyprus (from 30.0% to 41.6%) and Malta (from 28.2% to 34.7%).

Source: Eurostat

Friday, 19 June 2009

Madrid Region Gets EUR 397m Investment Boost

EIB lends EUR 397 million to Madrid Region

This morning in Madrid, the European Investment Bank (EIB), represented by its Vice-President Carlos da Silva Costa, and the Madrid Region, represented by its President Esperanza Aguirre, signed two loan contracts totalling EUR 397 million for financing investment in educational facilities and the extension of Madrid’s metro network.

Vice-President Carlos Costa stressed that “the signing of these two loans constitutes another step forward in the cooperation between the EIB and the Madrid Region, which goes back more than 20 years. As in the past, these bankable major projects are backed by a competent and experienced promoter, which is why the Madrid Region is one of the biggest recipients of EIB loans in Spain”.

The first operation is a direct EUR 320 million loan to the Region designed to finance works involving 415 colleges and pre-school, primary, secondary and vocational training establishments spread across the region. The project comprises the construction of new schools and the refurbishment and expansion of existing schools, along with the provision of furniture and equipment. It will meet the need to increase the number of school places in the region, whose population is constantly growing, and to upgrade teaching facilities and adapt them to the new learning environment.

MINTRA, a public entity set up by the Madrid Region, will receive the second EUR 77 million loan to finance the extension of lines 2 and 11 of the Madrid Metro. Line 2 will be extended by 4.6 km and get four new stations. Line 11 will be extended by 3.2 km and get one new station. It is estimated that the project will benefit some 83 000 users.

Both the investment in human capital (the construction of more than 400 colleges) and the improvement of key infrastructure (the metro network) will foster the sustainable development of the Madrid region.

The EIB is the EU’s long-term financing institution promoting European objectives. Founded in 1957, it operates in the 27 EU Member States and over 130 other countries worldwide.
EIB financing operations are mounted in the framework of well-defined EU policies.

Wednesday, 17 June 2009

Construction Output Up 0.6% in Euro

Construction output has risen by 0.6% in the euro area, and it's up by 0.7% in the EU27.

In the construction sector, seasonally adjusted production1 increased by 0.6% in the euro area2 (EA16) and by 0.7% in the EU272 in April 2009, compared with the previous month.

In March3, production rose by 0.6% and by 0.1% respectively. Compared with April 2008, output in April 2009 dropped by 4.7% in the euro area and by 5.1% in the EU27.

Source: Eurostat

Tuesday, 16 June 2009

Euro Area Labour Costs Rose by 3.7%

Euro area labour costs rose by 3.7% in the first quarter of 2009, compared with first quarter 2008. The EU27 rose by 1.5%. Delfationary risks appear to be easing, but structural weakness persists in the EU's top heavy production costs.

Total hourly labour costs in the euro area (EA16) rose by 3.7% in nominal terms in the year up to the first quarter of 2009, compared with 4.0% for the previous quarter2. In the EU27, the annual rise was 1.5% up to the first quarter of 20093, compared with 4.5% for the previous quarter2.

The two main components of labour costs are wages and salaries and non-wage costs. In the euro area, wages and salaries grew by 3.6% in the year up to the first quarter of 2009, and non-wage costs by 4.5%, compared with 3.9% and 4.4% respectively for the fourth quarter of 2008.

In the EU27, wages & salaries rose by 1.1% and the non-wage component by 3.1%. For the previous quarter the corresponding rates were 4.5% and 4.6%.

The breakdown by economic activity shows that in the euro area hourly labour costs rose at an annual rate of 6.1% in industry, 3.6% in construction and 2.4% in services up to the first quarter of 2009. In the EU27, labour costs grew by 5.2% in industry and 2.8% in construction, but fell by 0.5% in services.

Source: Eurostat, the Statistical Office of the European Communities.

Atonement - All That Glisters Is Not Gold

European Business Express ran this editorial two years ago, just as we were all learning to say 'sub-prime'. Get ready for a return to high oil prices and a steady climb in housing demand.

Atonement, starring Keira Knightley, opened this year’s Venice Film Festival. A galling tale of perception and deceit, it has at its core Shakespeare’s message from The Merchant of Venice, “All that glisters is not gold.” Gold has passed out of fashion, but with some analysts predicting prices of $1000 an ounce, the Gold Standard is making a return.

Shylock would have scorned Northern Rock, accused and applauded the Bank of England in suitable measure, and suffered greatly with a daughter such as Knightley’s character ‘Cecilia’, ensnared by confusion and an unrelenting tide of events.

Ms Knightley’s publicist would punch out weight-loss denials at mere mention of a pound flesh, but could do little to assuage concerns that financial markets are anorexic. Markets are currently adjusting to ongoing sub-prime turbulence, but it is a play on words.

Innovation and increasingly perfect information have conspired to encourage risk-taking. This will continue. The banking system relies no longer on strolls along elegant Venetian canals to gauge risk and weigh opportunity. In an instant, risk is calculated.

Investors seeking to avoid “moral hazard” will have taken no comfort as the United Kingdom’s Chancellor guaranteed the savings of Northern Rock customers. Politicians can no longer serve a ruling class. Economic growth depends on the perceived wealth of voters, their capacity to borrow and spend, their provision of tax revenue and electoral success.

We believe what we want to, what we need to. Economics is a confidence trick, gold is actually worth nothing. The current “crisis” is little more than an adjustment; perhaps a little painful for a time, but the markets will recover, and move on, for there is much to be gained from confusion and swimming with the unrelenting tide of events. When it comes to the economy, there is no atonement. It is a work of fiction.”