E.U. budget could be reduced

8 Feb

E.U. is approaching British perspective

British proposal is gaining momentum, German austerity now has an ally with a renewed bargaining power, Britain. The debate now is concentrated on a limit of 960 billion euros wich is under the European Council’s proposal of 1.03 trillion. Austere approach was supported by those who contribute more than they receive back from the EU (Germany, Netherlands, Sweden is the name most difficult). But the finish line is still far: titanic task now is to divide the money on domains, each country or group of countries having specific interests to defend. If they will quickly overcome this issue it could bring back the focus on reform policies and would be well received in the markets. Impact of the final decision will be major on the long-term, poorer states being dependent on stable and robust capital flows to be able to bring hope and consolidated  growth. Preliminary discussions will be followed by a vote in Parliament, which is something more than a formal stage. Euro has kept a reserved tone despite smaller budget deficit in France and an increase industrial poduction in Italy.

Japan has the lowest current account surplus after 1985

Japan marked the 2012 current account surplus with only 4.7 trillion yen not just under the average estimate but also the lowest value since 1985. In December deficit of 264 billion yen surplus was the mirror image of the previous year. The debate between China and Japan had blocked the chance to benefit from global economic recovery with an expansion of new loans and lower inflation. Yen strengthened against the euro and the dollar though, but will see if this logic of risk aversion will remain.


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