News / Europe

EU Claims That Crisis Is Over Premature, Analysts Warn

EU Claims That Crisis Is Over Premature, Analysts Warni
X
February 12, 2013 3:22 AM
European financial markets were mixed Monday after the budget deal struck by EU leaders Friday, which will see overall spending cut for the first time. Several European leaders have suggested in recent weeks that the continent is emerging from the euro crisis. But analysts warn politics could be about to blow the fledgling recovery off course. Henry Ridgwell reports from London.

EU Claims That Crisis Is Over Premature, Analysts Warn

Henry Ridgwell
European financial markets were mixed Monday after the budget deal struck by EU leaders Friday, which will see overall spending cut for the first time. Several European leaders have suggested in recent weeks that the continent is emerging from the euro crisis. But analysts warn politics could be about to blow the fledgling recovery off course.  Henry Ridgwell reports from London.

The budget deal agreed to after marathon 25-hour talks in Brussels will see total EU expenditures cut by $45.9 billion or 34.4 billion euros over the next seven years.

It was seen as a victory for those EU leaders who had demanded that austerity at home be matched by cuts in Brussels, like British Prime Minister David Cameron.

“There are lots of people who wanted to push it up, and at last someone has come along and said this has got to stop.  It is time for that credit card limit to go down,” Cameron said.

The euro has gained 6 percent against a group of other currencies over the last six months. That’s a good sign, says European Central Bank President Mario Draghi.

“The appreciation is, in a sense, a sign of the internal confidence of the euro,” Draghi said.

Analysis by the Dutch bank ING showed almost $134 billion or 100 billion euros in private funds flowed back into eurozone periphery countries in the last four months of 2012.  That marks a big turnaround from a year ago when fears of a capital flight stalked the eurozone.

“We’ve seen the banks in Spain and Italy benefit from that, and there has been more of a willingness to take on the riskier trades of lending to the periphery nations,” said Louise Cooper. a a financial analyst and author of the CooperCity blog.

Periphery countries like Greece and Spain are still struggling with low or negative growth and spiraling unemployment.
 
Cooper says claims by European leaders that the debt crisis is over are far too premature.

“Progress is being made, but at a snail’s pace. Even though we have a big rally in equity markets - or had a big rally in equity markets - in the first few weeks of January, it was actually on quite small volumes,” Cooper said.

Italy has an election on February 24 with former Prime Minister Silvio Berlusconi climbing in public opinion polls. Meanwhile, the party of Spain’s Prime Minister Mariano Rajoy is engulfed in corruption allegations.

“Politics is one of the black swans of the eurozone this year. In Italy we could have political uncertainty, perhaps the return of Silvio Berlusconi. In Spain, we don’t know where the current scandal surrounding the Prime Minister will go.  All of these sorts of things have the capacity to unsettle markets,” said Philip White, who is with the Centre for European Reform.

White adds that the big test for Europe this year comes in September with the German elections, when Chancellor Angela Merkel will face a tough battle to remain the leader of Europe’s biggest economy.

You May Like

China May Be Biggest Winner From Ukraine Crisis

Missile sales, oil and gas shipments are among many areas that may drive Beijing and Moscow closer together in coming years More

Obama Faces Chaotic World, Limits of Power

Current foreign policy issues bring into focus challenges for US policymakers who are mindful of Americans' waning appetite for overseas military engagements More

SADC Meeting Lesotho Officials to Resolve Stalemate

Official says regional bloc has been engaged with leaders in Lesotho to resolve political disagreement that led to coup attempt More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
West Africa Ebola Vaccine Trials Possible by Early 2015i
X
Carol Pearson
August 30, 2014 7:14 PM
A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.
Video

Video Cost to Raise Child in US Continues to Rise

The cost of raising a child in the United States continues to rise. In its latest annual report, the U.S. Department of Agriculture says middle income families with a child born in 2013 can expect to spend more than $240,000 before that child turns 18. And sending that child to college more than doubles that amount. VOA’s Deborah Block visited with a couple with one child in Alexandria, Virginia, to learn if the report reflects their lifestyle.
Video

Video Chaotic Afghan Vote Recount Threatens Nation’s Future

Afghanistan’s troubled presidential election continues to be rocked by turmoil as an audit of the ballots drags on. The U.N. says the recount will not be completed before September 10. Observers say repeated disputes and delays are threatening the orderly transfer of power and could have dangerous consequences. VOA correspondent Meredith Buel reports.
Video

Video Ukraine Battles Pro-Russia Rebel Assault

After NATO concluded an emergency meeting to discuss the crisis in eastern Ukraine, the country is struggling to contain heavy fighting near the strategic port of Mariupol, on the Azov Sea. Separatist rebels are trying to capture the city, allegedly with Russian military help, and Ukraine's defense forces are digging in. VOA's Daniel Schearf spoke with analysts about what lies ahead for Ukraine.
Video

Video Growing Business Offers Paint with a Twist of Wine

Two New Orleans area women started a small business seven years ago with one thing in mind: to help their neighbors relieve the stress of coping with a hurricane's aftermath. Today their business, which pairs painting and a little bit of wine, has become one of the fastest growing franchises across the U.S. VOA’s June Soh met the entrepreneurs at their newest franchise location in the Washington suburbs.
Video

Video Ebola Vaccine Trials To Begin Next Week

The National Institutes of Health says it is launching early stage trials of a vaccine to prevent the Ebola virus, which has infected or killed thousands of people across West Africa. The World Health Organization says Ebola could infect more than 20,000 people across the region by the time the outbreak is over. The epidemic has health experts and governments scrambling to prevent more people from becoming infected. Zlatica Hoke has more.
Video

Video Asian Bacteria Threatens Florida Orange Trees

Florida's citrus fruit industry is facing a serious threat from a bacteria carried by the Asian insect called psyllid. The widespread infestation again highlights the danger of transferring non-native species to American soil. VOA’s George Putic reports.
Video

Video Aging Will Reduce Economic Growth Worldwide in Coming Decades

The world is getting older, fast. And as more people retire each year, fewer working-age people will be there to replace them. Bond rating agency Moody’s says that will lead to a decline in household savings; reducing global investments - which in turn, will lead to slower economic growth around the world. But experts say it’s not too late to mitigate the economic impact of the world’s aging populations. Mil Arcega has more.
Video

Video Is West Doing Enough to Tackle Islamic State?

U.S. President Barack Obama has ruled out sending ground troops to Iraq to fight militants of the so-called Islamic State, or ISIS, despite officials in Washington describing the extremist group as the biggest threat the United States has faced in years. Henry Ridgwell reports from London on the growing uncertainty over whether the West’s response to ISIS will be enough to defeat the terrorist threat.
Video

Video Coalition to Fight Islamic State Could Reward Assad

The United States along with European and Mideast allies are considering a broader assault against Islamic State fighters who have spread from Syria into Iraq and risk further destabilizing an already troubled region. But as VOA State Department Correspondent Scott Stearns reports, confronting those militants could end up helping the embattled Syrian President Bashar al-Assad.
Video

Video Made in America Socks Get Toehold in Online Fashion Market

Three young entrepreneurs are hoping to revolutionize the high-end sock industry by introducing all-American creations of their own. And they’re doing most of it the old-fashioned way. VOA’s Julie Taboh recently caught up with them to learn what goes into making their one-of-a-kind socks.
Video

Video Americans, Ex-Pats Send Relief Supplies to West Africa

Health organizations from around the world are sending supplies and specialists to the West African countries that are dealing with the worst Ebola outbreak in history. On a smaller scale, ordinary Americans and African expatriates living in the United States are doing the same. VOA's Carol Pearson reports.

AppleAndroid