News / Europe

Europe Warily Watches US 'Fiscal Cliff' Talks

Europe Warily Watches US 'Fiscal Cliff' Talksi
X
January 01, 2013 2:14 AM
Several European leaders have struck a downbeat tone in their end-of-year addresses - warning that further economic pain lies ahead in 2013. Added to the euro crisis is a fear that fiscal negotiations in the U.S. Congress could have a deep impact around the world. Henry Ridgwell reports from London.
Europe Warily Watches US 'Fiscal Cliff' Talks
Henry Ridgwell
Several European leaders have struck a downbeat tone in their end-of-year addresses - warning that further economic pain lies ahead in 2013. Added to the euro crisis is a fear that fiscal negotiations in the U.S. Congress could have a deep impact around the world.

In European capitals, new year celebrations are underway. The fireworks are welcoming in 2013. But it has been a turbulent 12 months for Europe - and German Chancellor Angela Merkel ended the year on a somber note, warning that the coming year will be even more difficult.
 
“The reforms that we've introduced are beginning to have an impact," she said. "Nevertheless we need to have further continued patience. The crisis is far from over.”

Her speech may have dampened year-end celebrations - but she has good reason to be cautious, says Spyros Economides of the London School of Economics.

“There’s an election in Germany in about 10 months’ time and that means that nothing drastic can really happen before that election cycle is closed," he said. "If Angela Merkel were to win, I think you’d see a slightly more assertive Germany saying ‘well now we have to make quite big changes to European institutions.’”

While not a member of the euro currency, Britain is also trying to drive through changes in Europe. Many lawmakers in Prime Minister David Cameron’s own party want Britain to leave the EU altogether. In his end-of-year speech, Cameron also struck a cautionary tone.

"Britain is in a global race to succeed today. It is race with countries like China, India and Indonesia; a race for the jobs and opportunities of the future," he said. "So when people say we can slow down on cutting our debts, we are saying no."
Debts continue to drag down Spain’s economy. Bankia, which had already been rescued once by the state, is now getting an EU bailout - but it will cost 350,000 savers and pensioners their investments.

Spain’s Prime Minister Mariano Rajoy said the Spanish state finances had at least survived 2012.

"Is avoiding a bailout the greatest achievement of the year? No. I think the most important thing this year has been to change course, correct the direction of economic policy,” he said.

Sony Kapoor of the economic analyst group Re-Define says such talk is complacent.

“The growth prospects have never looked worse," Kapoor said. "Unemployment is at record levels and the political space and political capital that is available to handle these increasing economic problems is actually shrinking.”

European politics is about to witness the return of an old face, as former Italian Prime Minister Silvio Berlusconi - forced to resign in 2011 at the height of the debt crisis - plans to lead the center-right campaign into the February general elections. He’ll face incumbent Mario Monti.

But Europe’s recovery could be completely derailed if the U.S. Congress fails to reach a deal on government borrowing, and falls off the so-called ‘fiscal cliff’ - says Majoj Ladwa of London brokerage firm, TJ Markets.

"If the situation isn't resolved, equity markets could start pricing in the negative aspects of this whole episode, and that is the U.S. economy potentially going into recession," Ladwa said.

Analysts say the old adage still rings true - that when the U.S. sneezes, the rest of the world catches a cold.

You May Like

Mugabe Dismisses Male-Female Equality

'It is not possible that women can be at par with men' incoming African Union president declares on eve of summit More

Somali Terror Suspect's Light Sentence Raises Questions

Abdullahi Yusuf, 18, could have spent 15 years in prison but judge instead sentenced him to a halfway house, and a program to try to integrate him back into the community More

Video Kobani Ravaged Following Kurdish Ouster of IS Militants

Even so, hundreds of refugees sheltering in Turkey seek to return; Kurdish forces hold some back, saying fighting continues More

This forum has been closed.
Comment Sorting
Comments
     
by: JKF from: Ottawa, Canada
December 31, 2012 7:43 PM
The EU's bad economic prospects can't be all blamed on the poor sit developing in the US. My view/opinion is that the EU's Brussels' unelected dictatorship, and its continuous production of overarching legislations/rules/decrees = "standards" are rapidly making EU nations' competitiveness collapse under the shear load/burden of these new labour intensive dictates. Already a number of countries have addressed objections to them, only to fall on deaf ears in Brussels. Most EU countries, have big bureaucracies, why one more? I am not surprised that the UK is starting to look at a way out. The UK has been, is, and probably will always be a sea trading nation. Any additional burdens "standards" on native industries, will just make them much less competitive; most already can't compete, because of unfair trading practices at the other ends of the seaways. The "carbon tax/protectionist tariff" will just put more people out of work.; some countries are already preparing similar extranational market access taxes, to compensate for the carbon tax, against EU products. The Brussels experiment, extranational unelected legislative body, needs to be put out of business, before it puts the EU nations and their people out of work. It is a tough sit, why make it any worse for EU industries?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Groundbreaking Hand-Painted Documentary About Van Gogh in Productioni
X
George Putic
January 29, 2015 9:43 PM
The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Groundbreaking Hand-Painted Documentary About Van Gogh in Production

The troubled life of the famous 19th century Dutch painter Vincent van Gogh has been told through many books and films, but never in the way a group of filmmakers now intends to do. "Loving Vincent " will be the first ever feature-length film made of animated hand-painted images, done in the style of the late artist. VOA’s George Putic reports.
Video

Video Rock-Consuming Organisms Alter Views of Life Processes

Scientists thought they knew much about how life works, until a discovery more than two decades ago challenged conventional beliefs. Scientists found that there are organisms that breathe rocks. And it is only recently that the scientific community is accepting that there are organisms that could get energy out of rocks. Correspondent Elizabeth Lee reports.
Video

Video Paris Attacks Highlight Global Weapons Black Market

As law enforcement officials piece together how the Paris and Belgian terror cells carried out their recent attacks, questions are being asked about how they obtained military grade assault weapons - which are illegal in the European Union. As VOA's Jeff Swicord reports, experts say there is a very active worldwide black market for these weapons, and criminals and terrorists are buying.
Video

Video Activists Accuse China of Targeting Religious Freedom

The U.S.-based Chinese religious rights group ChinaAid says 2014 was the worst year for religious freedom in China since the end of the Cultural Revolution. As Ye Fan reports, activists say Beijing has been tightening religious controls ever since Chinese leader Xi Jinping came to office. Hu Wei narrates.
Video

Video Super Bowl Ads Compete for Eyes on TV, Web

Super Bowl Sunday (Feb. 1) is about more than just the NFL's American football championship and big parties to watch the game. Viewers also tune in for the world famous commercials that send Facebook and Twitter abuzz. Daniela Schrier reports on the social media rewards for America’s priciest advertising.
Video

Video Theologians Cast Doubt on Morality of Drone Strikes

In 2006, stirred by photos of U.S. soldiers mistreating Iraqi prisoners, a group of American faith leaders and academics launched the National Religious Campaign Against Torture. It played an important role in getting Congress to investigate, and the president to ban, torture. VOA's Jerome Socolovsky reports.
Video

Video Freedom on Decline Worldwide, Report Says

The state of global freedom declined for the ninth consecutive year in 2014, according to global watchdog Freedom House's annual report released Wednesday. VOA's William Gallo has more.
Video

Video MRI Seems to Help Diagnose Prostate Cancer, Preliminary Study Shows

Just as with mammography used to detect breast cancer, there's a lot of controversy about tests used to diagnose prostate cancer. Fortunately, a new study shows doctors may now have a more reliable way to diagnose prostate cancer for high risk patients. More from VOA's Carol Pearson.
Video

Video Smartphones About to Make Leap, Carry Basic Senses

Long-distance communication contains mostly sounds and pictures - for now. But scientists in Britain say they are close to creating additions for our smartphones that will make it possible to send taste, smell and even a basic touch. VOA’s George Putic reports.
Video

Video Former Sudan 'Lost Boy' Becomes Chess Master in NYC

In the mid-1980’s, thousands of Sudanese boys escaped the country's civil war by walking for weeks, then months and finally for more than a year, up to 1,500 kilometers across three countries. The so-called Lost Boys of the Sudan had little time for games. But one of them later mastered the game of chess, and now teaches it to children in the New York area. VOA’s Bernard Shusman in New York has his story.
Video

Video NASA Monitors Earth’s Vital Signs From Space

The U.S. space agency, NASA, is wrapping up its busiest 12-month period in more than a decade, with three missions launched in 2014 and two this month, one in early January and the fifth scheduled for January 29. As VOA’s Rosanne Skirble reports, the instruments being lifted into orbit are focused on Earth’s vital life support systems and how they are responding to a warmer planet.
Video

Video Crowded Republican Presidential Field Off to Early Start for 2016

It seems early, but the 2016 U.S. presidential election campaign is already heating up. Though no one has officially announced a candidacy, several potential Republican contenders have been busy speaking to conservative groups about making a White House run next year. Many of the possible contenders are critical of the Obama administration’s foreign policy record. VOA national correspondent Jim Malone reports.

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

All About America

AppleAndroid