Greece and its international lenders struck a deal to unlock the next tranche of loans under its rescue package on Tuesday, ending six months of negotiations that Athens called its “toughest” review since being bailed out.
The deal paves the way for Greece to repay nearly 10 billion euros of bonds due in May and bolsters expectations it could soon return to the bond markets for the first time since its debt crisis escalated four years ago.
Athens and its European Union and IMF lenders had been haggling over the bailout review since September, making it the longest inspection of the country’s finances since Greece was first rescued from bankruptcy by the creditors in 2010.
“This review was the toughest we’ve had so far,” Finance Minister Yannis Stournaras told reporters after a week of marathon talks that ended in the early hours of Tuesday.
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Greece will post a budget surplus of at least 1 billion euros ($1.35 billion) in 2013 and return the bulk of that to cash-strapped Greeks, Prime Minister Antonis Samaras said on Thursday, seeking to wrest momentum back from an emboldened leftist opposition.
Samaras, whose two-party coalition has just a three-seat majority in parliament, is under growing pressure as polls show the leftist Syriza party steadily gaining ground against the ruling parties ahead of local and EU elections in May.
Greece’s economy shrank by almost a quarter and unemployment has soared since the country was forced to slash public spending to avoid bankruptcy. Although a six-year-long recession is seen coming to an end in 2014, many Greeks remain angry about the hardship they have endured.
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Gold prices settled nearly 2 percent lower on Thursday as a pullback in the Federal Reserve’s stimulus program and an equities rally on robust U.S. growth data prompted bullion investors to take profits.
Signs of stabilization after a sharp emerging market selloff, which had boosted gold prices earlier this week, also hit gold’s safe-haven appeal.
The U.S. dollar strengthened and the S&P 500 stock market index rose more than 1 percent after data showed that robust household spending and rising exports sparked a 3.2 percent annual-rate growth in the U.S. economy in the fourth quarter.
The post Gold Drops Sharply to $1244 after Fed Taper and Equities Rally appeared first on MarketPulse.
U.S. crude oil rose about $1 on Thursday, after government data showed solid economic growth in the fourth quarter of last year and as cold weather was expected to boost oil demand.
Gross domestic product in the U.S. grew at a 3.2 percent annual rate, the Commerce Department said, a far stronger performance than economists anticipated earlier in the quarter and a bullish sign for energy demand.
The arctic chill held its grip on the U.S. Midwest and Northeast, driving a larger-than-expected draw on U.S. distillates stocks including heating oil, government data from Wednesday showed.
The post Brent Steady Around $108 as Cold Weather Helps appeared first on MarketPulse.
Germany’s federal government likely borrowed some 4 billion euros less than it initially projected in 2013, due to higher tax revenues, an economist with the IfW economic research center said on Wednesday.
Berlin borrowed a net 21.1 billion euros compared with the 25.1 billion euros Finance Minister Wolfgang Schaeuble had projected for the year, IfW’s Alfred Boss predicted.
Schaeuble’s ministry said in December that Germany would borrow less than expected in 2013 for the fifth consecutive year. A spokesman said final figures are due in mid-January.
Boss said Berlin collected 1.3 billion euros more in taxes than expected last year. Other reasons for the lower borrowing included lower interest payments and less spending on defense. The country’s jobless rate also remains near its lowest level since it reunified more than two decades ago.
However, the expert forecast a less rosy picture for 2014′s public finances.
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Shares of troubled Italian lender Banca Monte dei Paschi di Siena fell sharply on Tuesday following media report that its board is to discuss a capital increase in the coming months.
In a bid to stave off nationalization, the board of Banca Monte dei Paschi di Siena (BMPS) is expected to approve a capital increase of up to 3 billion euros ($4.1 billion) on Tuesday and could launch the rights issues as soon as January, according to a Reuters report on Monday.
In a statement Monday, the Tuscan lender said a board meeting had been called to discuss “capital operations”, without giving more details.
The post Scandal Hit Italian Bank Falls After Capital Increase appeared first on MarketPulse.
Slowing price growth in Europe is likely to reverse, according to a senior European Central Bank (ECB) official, who said the central bank is ready to tackle any possible disinflation.
“We don’t see it as a very likely prospect that disinflation would worsen in the euro zone as growth recovers, which is our main scenario,” Benoit Coeure, an executive board member of the European Central Bank told CNBC in an exclusive interview on Tuesday .
“Inflation will pick up gradually and will come back to the 2 percent target of the ECB.”
(Read More: ECB’s Draghi: Nothing new on negative deposit rates)
The ECB has warned of deflationary pressures – when the price of goods and services start to decrease. The danger is people expect falling prices and become reluctant to spend and borrow. That would make it hard to get the economy moving again.
It has yet to materialize but disinflation – when price growth stops increasing and decreases – has been seen in recent figures.
The ECB announced on November 7 a quarter-point cut in its main refinancing rate to a new record low of 0.25 percent. It followed surprisingly low inflation data which sparked concerns that the 17-country euro zone was heading for a period of deflation.
Coeure’s belief that inflation will pick up again correlates with the market view, with a Reuters poll predicting that the first estimate of inflation data this month, published on Friday, will show a slight upward movement to 0.8 percent from 0.7 percent.
Nonetheless, Coeure added that the Bank is ready for any alternative outcome.
The post ECB’s Coeure Says European Inflation Will Recover to 2 Percent Target appeared first on MarketPulse.
It was just before the start of a Group of 20 economic summit described at the time as make-or-break for the 17-nation euro zone, and only weeks before a Spanish general election.
“She greeted me pleasantly and almost without any introduction put forward a proposal about which we had not had any indication,” Zapatero writes in a book to be published on Tuesday in Spain.
“Merkel asked me if I was willing to ask for a preventive credit line of 50 billion euros from the IMF, while another 85 billion euros would go to Italy,” he said.
“My response was also direct and clear: ‘No’.”
Merkel accepted his answer and leaders then exerted far greater pressure on Italy to take a bailout, hoping this would halt a spreading crisis that had erupted in Greece.
Zapatero, who stepped down before his Socialist party suffered a landslide election defeat that month, is the first European leader of the time to publish a memoir on the crisis that nearly broke the euro zone in 2010-12 and still smoulders.
The post Former Spanish PM To Publish European Crisis Memoir appeared first on MarketPulse.
The German economy might be growing and there are signs of a stabilization in Europe and beyond, but it’s nothing to “hang our hats on,” the chief financial officer of Deutsche Post DHL told CNBC.
“We do see some signs of improvement [in the global economic outlook],” Lawrence Rosen said, speaking to CNBC from New York.
“We’re coming from a period of pretty long period of below-low trend growth now we think GDP growth for the whole world is going to be around 2 percent this year. It looks like the U.S. is improving, Europe seems to be stabilizing at least at a low level and Asia too seems to be stabilizing if not improving a bit.”
The German mail and logistics giant operates in more than 220 countries and, in 2012, generated revenues of more than 55 billion euros ($74 billion). The latest earnings figures from the company on November 12, however, showed that although net profit rose almost 6 percent in the third-quarter, a strong euro was weighing on sales.
German Finance Minister Wolfgang Schaeuble said an estimate by the International Monetary Fund that Greece will need an additional 11 billion euros to see it through to 2015 was “not completely unrealistic.”
Schaeuble provoked a storm last week when he said more explicitly than before that Greece would need a third bailout, going much further than Chancellor Angela Merkel had done. The government then sought to play down his remark.
“The estimate of 11 billion euros is not completely unrealistic. At any rate we are talking about a fraction of the amount of previous bailouts. A lot has been achieved already, but Greece is still in a crisis of adjustment,” he told the Passauer Neue Presse newspaper in an interview published in its Wednesday edition.
He ruled out the possibility of any additional debt write-down.
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