“I am convinced that we have overcome the worst of the crisis,” EU Internal Market Commissioner Michel Barnier said at the end of last year in Berlin. Barnier spoke the same way as a blind man would have done about colors. The crisis is not coming back. It has never been overcome. It is only that it was less talked about.
Not a problem was solved, not a euro of government debt was repaid. To the contrary, the third wave of problems is rolling in on the Old World (West) in the fifth year of the crisis: the first wave led to the collapse of the financial sector in 2007 and 2008 in Germany, which led to the nationalization of HRE (Hypo Real State Bank) and the partial nationalization of Commerzbank. The second wave led to a sharp decline in the real economy, which the government pushed back up by pumping money into economic stimulus programs such as the car scrappage bonus scheme. The billion was the smallest unit of account.
A continental risk zone
The third wave is brutally making its way through the porous dams: It’s the debt tsunami, which no savings plans, tax increases, or expropriations can counter. However, politicians and Euro bankers are denying that the tide is coming: “The idea that we in Europe have a liquidity problem is completely wrong,” said Jean-Claude Trichet, the former president of the European Central Bank and Mario Draghi’s predecessor. The latter is also called “Super Mario” due to his policy of using the miraculous process of money multiplication. Draghi himself added: “Italy is not a country at risk.”
The whole continent is a risk zone. “In the course of the financial and economic crisis, the EU countries have accumulated debts in a breathtaking way,” former Federal President Roman Herzog complained. Figures corroborate this: For example, the debt of EU countries has increased since 2008 from 6.5 to 9 trillion euros. In Europe, the trillion has become not the smallest, but the common unit of account. Never since the Second World War has Europe been so much in debt. Greece, with its 321-billion euro debt, is still a minor problem-Hmmmm Head still firmly in the sand eh...
If you try to cure evil with evil-you will add more pain to your fate.
Cold weather makes triple-dip recession more likely, economists fear.
Heavy snow may be crucial factor in whether economy expands or contracts in first three months of 2013
Larry Elliott, economics editor
The Guardian, Monday 25 March 2013 20.15 GMT
Fears that Britain is heading for an unprecedented triple-dip recession have intensified as economists warned that the severe weather gripping much of Britain threatened a second successive quarter of falling national output.
Just days after the chancellor predicted that the UK would narrowly avoid a second successive quarter of negative growth – the official definition of recession – experts warned that the combination of heavy snow and sub-zero temperatures might be a crucial factor in whether the economy expanded in the first three months of 2013.
Osborne has been hoping that a pick-up in the housing market and stronger consumer spending will be enough to eke out growth of 0.1% in the three months to March, avoiding "triple dip" headlines when the official figures are released late next month.
But amid reports of empty shopping malls, closed schools and factory shutdowns, analysts said the weather increased the chance that the fall in activity in the final three months of 2012 would be followed by another quarter of falling gross domestic product in early 2013 – thus satisfying the official definition of a recession.
I recently had some business interest in the retail trade-however the decline of such business has been long term probably over about 15 years or so, market trend shape high street traders futures such as the internet-and ofcourse the economy in general. Governments have limited input to benefit this particular area -however tax breaks and free parking etc could help.
We have successful moved the "shop" on line which is run most adequately by two person and quarterly profits are up in every area of the business. However personally I love to walk around markets and the like- examine the goods physically and have a bit of a barter.
I think Great Britain including Europe will be looking forward to another 10-20 years of decline-unless we as nation leave the EU and trade with the countries of the world who have been banging on our door for years.
However thats another debate altogether eh.
If you try to cure evil with evil-you will add more pain to your fate.
Come on George, liven yourself up or you'll be looking for a new job.
UK still on brink of triple-dip recession
Triple-dip: Chancellor George Osborne
27 March 2013
Britain remains on the brink of a triple-dip recession today after figures confirmed the economy contracted by 0.3% at the end of 2012.
The Office for National Statistics (ONS) stuck by its previous estimate for the fourth quarter, although it now thinks the UK economy grew by 0.3% across the whole of last year, rather than previous guidance of 0.2%.
GDP figures for the current quarter are due to be released at the end of April, with the recent cold weather increasing the chances of two successive quarters of contraction, which would represent a return to recession.
The country's stagnant performance reflects a fall in industrial production of 2.1% in the fourth quarter - including a 10.7% slump in mining and quarrying - and the biggest fall since the first quarter of 2009.
However, household spending in the fourth quarter increased by more than previously thought, up 0.4% from an earlier 0.2% reading. Total disposable incomes rose by 2.1% during the year as a whole, but slipped back 0.1% in the fourth quarter.
IHS Global Insight economist Howard Archer said: "It looks touch and go whether the economy can avoid further contraction in the first quarter of 2013, and hence a 'triple-dip' recession."
He said heavy snowfall, which has hit parts of the UK in recent days, increased the chances of another quarter of falling output.
Marginal growth of 0.3% in 2012 compared with 1% in 2011.
The figures also showed a household savings ratio of 7.1%, the highest since 1997, as people choose to save rather than spend. This figure was boosted by a £20.1 billion increase in wages and salaries versus 2011.
RBS sued by investors in ground-breaking class action
A group of investors, including the pension funds for miners and electricity workers, are suing the Royal Bank of Scotland for millions of pounds of losses sustained in 2008.
RBS faces its first ever UK class action case from investors who want compensation for the £12bn rights issue in 2008.
Louise Armitstead By Louise Armitstead
11:42AM GMT 28 Mar 2013
In a ground-breaking joint-writ issued this morning, the shareholders are demanding full compensation for their investments in RBS’s £12bn rights issue that was launched shortly before the bank imploded.
The eight-page writ says: “The Claimants have suffered loss in respect of the New Shares as a result of untrue and misleading statements in the Prospectus.”
It adds: “Under FSMA section 90, RBS is liable to pay compensation to each of the Claimants for its losses, amounting to the difference between the price paid for the New Shares and their actual value. The Claimants will say that such difference was the whole or a substantial part of the price paid.”
The 21 claimants are also after interest payments.
The claimants listed in the writ include the Trustees of the Mineworkers’ Pension Scheme, the Coal Staff Superannuation Scheme, the Electricity Pensions Trustees, and a series of individuals ING funds.
The class action is the first of its kind in the UK in the wake of the banking crisis. A similar case was brought by investors in America but was thrown out by a New York court last year.
Clive Zietman, Head of Commercial Litigation at Stewarts Law, said: “Unless the matter can be resolved amicably, the claimants intend to pursue this litigation vigorously and through to trial in order to seek appropriate redress from the court.”
The claim is a blow to RBS which was yesterday shown to have the biggest capital black hole according to Sir Mervyn King's estimates.
Britain was urged to consider pushing back some of its deficit-cutting measures and had its growth outlook cut sharply by the International Monetary Fund today. The IMF lowered its estimate of growth for this year and next as it warned of “lacklustre demand” in Britain.
Unemployment leapt by 7,000 to 2.52m in the three months to January
Jobless ... biggest three-month rise since 2011
By STEVE HAWKES and GRAEME WILSON
Published: 8 hrs ago
UNEMPLOYMENT has soared and wages have dropped in a double blow for Britain revealed yesterday.
Pressure piled on Chancellor George Osborne as the jobless total rose 70,000 to 2.56million — the biggest three-month rise since 2011.
Youth unemployment also jumped 20,000 to 979,000 — while the number jobless more than a year in the period to February hit 900,000. Separate figures showed average pay crept up one per cent in the three months, the lowest rate since records began more than a decade ago.
But wages are effectively falling because the cost of living is rising by 2.8 per cent, almost THREE TIMES as much.
The grim news came a day after the IMF warned the Chancellor he was “playing with fire” with his austerity programme. In what experts called a marked changed of tone, No 10 described yesterday’s figures as “worrying”.
A spokesman added: “These are tough economic times, but unemployment is still below last year’s level.”
Experts say the Coalition’s employment record has been relatively good.
Analysts had predicted the credit crisis would push the jobless figure to 3million, but the private sector sparked a mini-hiring boom last autumn.
Firms have avoided big lay-offs by cutting hours and restraining pay.
But economist Howard Archer, of IHS Global Insight, said: “Overall the data fuels concern that the labour market’s recent strength is fraying as the economy continues to struggle for even modest sustained growth.”
The former Chancellor says more and more respected people are calling for the current resident of Number 11 to change direction.
3:42pm UK, Sunday 21 April 2013
Former Chancellor of the Exchequer Alistair Darling
The outstanding question in British politics is how long the Government will "lumber on" with failing economic policies, according to Alistair Darling.
The former Labour Chancellor said his party was right to sit and wait to see what George Osborne's strategy actually becomes.
He told Sky News' Murnaghan programme Mr Osborne had lost credibility and insisted Labour would be "very wise" to "wait and see what he actually comes up with".
Mr Darling highlighted the latest ratings downgrade, the IMF's comments and the Treasury Select Committee's criticism of housing policy as three major blows to the current Chancellor's policies this week alone.
He said: "What you saw last week were more and more people saying (Mr Osborne's) policy isn't working.
"I've been saying that for the last three years, and it was pretty unfashionable to do so, but what you're now seeing are respected figures inside and outside the UK calling into question the strategy.
"The big question is how long does the present Government simply lumber on simply hoping something will turn up.
Britain’s most senior civil servant has laid bare stark differences at the top of Government over how to revive the flagging economy. Sir Jeremy Heywood, the Cabinet Secretary, revealed a “diversity of views” in the highest ranks of Cabinet at a recent private meeting with bankers.
Osborne under fire over 'non-existent' recovery: Triple dip fear returns as new cash is pledged for small firms
GDP figures on Thursday could show Britain is in triple-dip recession
Alistair Darling says George Osborne's austerity is 'simply not working'
Liam Fox calls for Coalition to echo Thatcher by cutting spending and tax
Osborne to expand Funding for Lending scheme to boost small businesses
By James Chapman
PUBLISHED: 14:57, 21 April 2013 | UPDATED: 07:56, 22 April 2013
In trouble: George Osborne faces the prospect of a triple-dip recession later this week
Pressure was growing on George Osborne’s policies yesterday as the UK’s economic recovery was dismissed as ‘almost non-existent’ raising fears that Britain is on the brink of a triple-dip recession.
On Friday, Fitch became the second credit ratings agency to strip Britain of its AAA rating, citing concerns about a ‘weaker economic and fiscal outlook’.
And while most economists believe the latest GDP figures, released on Thursday, will show that the economy grew by 0.1pc in the first three months of this year – narrowly escaping a ‘triple-dip’ recession – some City experts predict the figure will be negative.
They will come as Mr Osborne announces plans to extend an £80billion scheme to make cheap lending available for small businesses and homebuyers in his latest attempt to boost the recovery.
But yesterday David Riley, managing director of Fitch, criticised the Chancellor’s economic strategy.
He said: ‘It’s not just about the austerity, the bottom line is the private sector borrowed too much in the UK, it’s been very hard to rebalance the UK economy’
He told Sky’s Murnaghan show that the UK ‘economic recovery has been very weak, almost non-existent’ and warned the rating could fall again.
Another sign that the worst of the recession is over? (just like the Santander buy out of RBS)
Lloyds Banking Group's sale of more than 600 branches to the Co-operative Group collapses
Co-op claim deal was not in members' interests, but it also lacked the cash
By Martin Robinson
PUBLISHED: 07:36, 24 April 2013 | UPDATED: 08:16, 24 April 2013
Lloyds Banking Group's sale of more than 600 branches to the Co-operative Group has collapsed, partly because the buyer has a lack of free cash.
Part-nationalised Lloyds was being forced by Europe to sell the branches after its £20billion taxpayer bailout during the 2008 financial crisis.
But the Co-op has reportedly struggled to plug a £1billion gap needed to complete its takeover of the 632 Lloyds branches.
The Government says that if it sold its Lloyds shares for 61p each taxpayers would break even on the £20billion investment, but the bank's current price is only around 51p.
Pain: Lloyds was being forced to sell the branches because it received a 2008 bailout from the UK Government
Pain: Lloyds was being forced to sell the branches because it received a 2008 bailout from the UK Government
Bosses said the deal was not in its members' best interests and blamed the weak economic outlook and heavy regulatory burdens for the decision.
2013 and the Chancellor's policy begin to turn things around!
Number of people turning to food banks triples in a year
Charity says up to 650 more food banks are needed across UK to cope with surging demand
Patrick Butler, social policy editor
The Guardian, Wednesday 24 April 2013
Food bank in Coventry
Supplies are sorted at a food bank in Coventry. Photograph: Christopher Thomond for the Guardian
More than 350,000 people turned to food banks for help last year, almost triple the number who received food aid in the previous year and 100,000 more than anticipated, according to the UK's biggest food crisis charity.
The Trussell Trust said the dramatic increase in the use of its food banks was set to continue in the coming months as poorer families struggle financially as a result of the government's welfare reforms.
The Trussell Trust executive chairman, Chris Mould, said: "The sheer volume of people who are turning to food banks because they can't afford food is a wake-up call to the nation that we cannot ignore the hunger on our doorstep."
He added: "Politicians across the political spectrum urgently need to recognise the real extent of UK food poverty and create fresh policies that better address its underlying causes. This is more important than ever as the impact of the biggest reforms to the welfare state since it began start to take effect.
"Since 1 April we have already seen increasing numbers of people in crisis being sent to food banks with nowhere else to go."
Although it has established 345 food banks, the trust says there is insufficient capacity nationally and that between 400 and 650 more food banks are needed to cope with expected demand. It is opening new projects at the rate of three a week, but says geographical gaps in coverage mean "thousands of people are facing hunger today in towns with no food banks".
The rise in the numbers of people using Trussell-Trust-backed food banks in part reflects a 76% increase in the number of food banks set up over the past year. But the trust said it had seen a 170% increase in the number of people given food boxes over the same period.
Nearly a third of food parcel recipients had been referred to the trust because their social security benefits had been delayed. A further 15% came as a result of their benefits being cut or stopped (up from 11% in 2011-12). The trust said the majority of people turning to food banks were working-age families.
Mould said: "We're seeing people from all kinds of backgrounds turning to food banks: working people coming in on their lunch-breaks, mums who are going hungry to feed their children, people whose benefits have been delayed and people who are struggling to find enough work."
Trussell food boxes contain three days' supply of non-perishable foods such as tinned fruit, vegetables, meat and fish as well as pasta, cereal, UHT milk, sauces, tea, and long-life juice. Recipients must be referred by care professionals such as social workers or police officers, and are limited to three vouchers a year.
Mary Creagh, the shadow environment secretary, said: "The UK is the seventh richest country in the world yet we face a growing epidemic of hidden hunger with people increasingly unable to meet their family's basic needs. This incompetent government needs to wake up the human cost of their failed economic policies and change course now."
Although the Trussell figures are one of the most robust indicators of the prevalence of food poverty, they represent just a fraction of the growth in emergency food aid in the UK, much of it small-scale and ad hoc, and run through local churches, community groups and housing associations.
The Salvation Army, which also provides emergency food parcels, said many of its local branches ran informal food banks, but it did not collect statistics on a national basis. Anecdotally, it said several of its local branches – known as "corps" – had witnessed an increase in the number of requests for food parcels.
A spokesman for the Department for Work and Pensions said the rise in numbers of people using food banks was partly explained by the decision of jobcentres to refer some clients to food banks, and partly a reflection of the success of Trussell's own "marketing activity".
He said: "The government already provides a safety net for essentials like food and housing through the benefits system and claimants can also request a benefit advance or help from their local authority where needed."
However, local authorities have complained that jobcentres are refusing to issue short-term benefit loans to penniless claimants. Many councils have also entered into agreements to refer recipients of local crisis support to food banks following the abolition of the social fund.