Political Crisis Threatens Credibility Portugal Finance

Of Zone Europe reported, the risk of a political crisis in Portugal seem to threaten 'financial credibility' government that has been built since the last 2 years through a number of austerity measures and economic reforms, according to European Commission President Jose Manuel Barroso said.  

A market reaction suggests that the risk is very clear that, the financial credibility that has been built by the Portuguese government could be threatened political instability at this time. and if this is really the case, would be very damaging to confidence in the Portuguese, especially because they have seen early signs of economic recovery.  

While another reported a statement, the European Parliament has passed a budget proposal the European Union (EU) in 2014 to 2020, after passing through a long debate between governments, parliaments and executives in the region.Political resolution proposed EU budget for the period of seven years, cut spending for the first time after being approved 474 votes, 193 against and 42 abstentions. 

EU Urges France Pursue Targeted Economic Reform

European Commission President Jose Manuel Barroso said France should present a credible structural reform program, after new data showed Europe's second largest economy is slipping into recession. 
Barroso, who will meet with French President Francois Hollande in Brussels, said that, as directed by the European Union (EU) France to pursue reforms two years to bring the budget deficit down to 3 percent of economic output as promised. 

"The extension will be approved if the French present a credible reform program so that it can regain competitiveness," Barroso said, as quoted by Reuters on Wednesday (05/15/2013). 

Earlier, the French parliament passed the state labor reform, as part of Hollande's efforts to convince the European partners that it is committed to economic reform. 

Sustaining Interest Rate Speculation ECB Euro, Eurozone Still Poor Performance

The euro traded higher versus the U.S. dollar amid speculation that the European Central Bank will act to stimulate the economy in the 17-state region. 

Official data on Tuesday (30/4) showed that inflation in the euro zone has fallen to the lowest level in three years, and unemployment reached a new record, which will raise expectations lowered interest rates by the European Central Bank (ECB) in order to revive the economy that has been stagnant .A series of disappointing euro zone data, it has increase the odds of the ECB to cut interest rates in the next policy meeting May 2. 

Bureau of Statistics European Union (Eurostat) Indicates that, inflation in the euro zone slumped to 1.2 percent in April, the worst level since February 2010, and is the biggest monthly drop in more than four years. It was as if reflecting the danger of economic recession. With the rising cost of living, inflation rate was well below the estimated ECB, still just under 2 percent. While economists projected inflation would be at the level of 1.6 percent for the month.

U.S. Consumer Spending Levels, Natural Increase

Of the United States reported, the level of consumer spending in the U.S. unexpectedly rose in March as low inflation supports the purchasing power of domestic consumers, a good signal for the economy lost momentum towards the end of the first quarter.
 
As reported by MarketWatch, Monday (29/04/2013) The U.S. Commerce Department on Monday said consumer spending increased by 0.2% last month following a revised increase of 0.7% in February.
Economists expect consumer spending which covers about 70% of economic activity flat last month. After penyesuasian for inflation, spending rose 0.3% after rising by the same amount in the month of February.
 
This report strengthens the hope that the growth rate in the second quarter may not be later had feared this moment. Bertumbuhan economy with an annual rate of 2.5% in the first quarter of this year. Output in the first quarter driven by a 3.2% increase in consumer spending, although the payroll tax cut of 2% which ended in January.

Euro Weakens Could Accomplish If the ECB Policy

Of the European Union Dilaorkan, bond purchase policy states troubled by the European Central Bank (ECB) has drawn criticism from German monetary authorities. Outright Monetary Transactions program (OMT), which was launched last September was considered tarnished the central bank's independence. 

As reported by the German media, Handelsblatt, Germany's central bank does not agree with the policy formula in OMT. In the thick 29 page report prepared for the Constitutional Court, the Bundesbank warned of a decline in ECB image in the eyes of the world because it is too busy with private areas of a country.The ECB will hold a meeting this week. The initial reaction to the ECB forex market depends on the nature of the policy mix that the central bank will spend this week.

ECB Ready to Lower Interest Rates

ECB Ready to Lower Interest Rates, Monetary Policy Not Drugs Economic Disease

The euro weakened against the Japanese yen, after expectations the European Central Bank (ECB), which is expected to cut interest rates at its monetary policy meeting next week.

EUR / JPY fell by 0.12% to the 129.35, the high price of 129.90.

As reported, the European Central Bank denies the assumption that mentions that the program budget cuts in some Euro countries failed to meet expectations. According to the ECB Executive Board member, Joerg Asmussen, a fiscal consolidation strategy to achieve long-term financial balance of the post and not the current crisis solution. 
The ECB considers that the effects of interest rate cuts to troubled countries will be very limited. This is where the role of fiscal consolidation is needed so that the central bank's policies supportive not be in vain.

Asmussen considers the application of interest rates too low for a long time also have negative consequences, such as reducing the incentives for a government and banks to adjust the interest rate climate.Based on various comments of the high officials, the ECB signaled not to replicate what has been done by the central banks in developed countries, especially in terms of launching the stimulus.

Bernanke Not Present In Jackson Hole meeting

Bernanke Not Present In Jackson Hole meeting of the U.S. Federal Reserve Chairman, Ben Bernanke will lose the opportunity to attend the annual meeting Jakson Hole, the symposium which focuses on important economic issues facing the U.S. and world economy. As reported analisadaily, Tuesday (03/23/2013), the full schedule, causing Ben should skip the prestigious event for the first time since he took the helm of the Fed in 2006.

EU Avoid Housing Bubble, Interest Rate haunt Euro

EU negotiators can resolve diekspektasikan general rule first on mortgage loans on Monday, in order to attempt to avoid a repeat of the property bubble that sparked the euro zone debt crisis.
As reported analisadaily, Tuesday (03/23/2013), legislation that would force European lenders that have channeled funds worth 6.5 trillion euros ($ 8.5 trillion) foray into the mortgage market to check the credit worthiness of potential customers and their ability to pay, which effectively prohibit individual certification or loan bulging.This rule will also prohibit or those who execute mengillegalkan credit checks by banks and other lenders who associated wages mortgage amount they approve.
If an agreement is reached, the draft rules will need to be stamped by the full parliament and EU governments before entering berlakuknya period in mid-2015.Home loans are not responsible in the United States created a housing credit bubble that triggered the domestic global financial crisis.

About the IMF reforms, Brazil Criticizes Europe and the U.S.

Brazilian Finance Minister Guido Mantega, denounced the United States and Europe because of stalling reforms that would reduce their role in the International Monetary Fund. 
As quoted by the news agency on Saturday (20/03/2013), in a statement to the Fund on behalf of 11 member countries, Mantega said the reform of the European and U.S. dominance over the ownership of shares and voting rights at the IMF has been repeatedly delayed, preventing balancing would allow developing countries have a greater voice, AFP reported.

'Reform of the IMF may be the nadir. Targeted time has failed to be met, delays and delays have become routine, "Mantega said. 
2010 program does not run because it requires the support of the United States, where Congress continues to refuse ratification.

And the next quota review, which will be completed in January 2014, was also delayed due to 'resistance to change on the part of over-representation of European countries, "Mantega said.

In the G20, U.S. Currency Competition Policy Press

The United States will push economic strength member Group of 20 (G20) to avoid other "competing currency policy 'during the G20 meeting this week, U.S. Treasury Secretary Jacob Lew said Wednesday. 
'We will continue to press the G20 countries to avoid policy spiral' beggar thy neighbor ',' Lew said in a speech at a university in Washington, according to the prepared text.

Policy of 'beggar thy neighbor' is the economic policy of a country that is applied to fix the economic problems in a way that tends to exacerbate the economic problems of other countries. 
One of the policy of 'beggar thy neighbor' who lately tend to do some states in the face of the economic crisis is 'Competitive Devaluation' (competitive devaluation), which measures the currency devalued that aims to improve the competitiveness of its exports.

'It is essential that all G20 countries to follow up their recent commitment not to target the exchange rate for competitive purposes, "Lew added.