Top Economics News

French banks fear that the project of President Francois Hollande to reform regulated savings in France deny them a windfall of cheap liquidity, while debt crisis in the euro area again threatens the ability of banks to refinance themselves on the European markets.

The new head of state, who voted in favor of a pact to support growth of the Agreement on budgetary discipline approved by 25 of the 27 countries of the European Union, wants to mobilize savings of the French to strengthen financial leeway of the state for housing and corporate finance. 

His presidential program provided including a doubling of the ceiling of Booklet A and Booklet Sustainable Development (LDD), currently limited to 15,300 euros respectively and 6,000 euros. They are currently paid at a rate of 2.25%.

Francois Hollande hopes to encourage the creation of new social housing and transform the LDD in "savings book industry" dedicated to SME financing and business innovation.

If investors can not appreciate these reforms, credit institutions such as BNP Paribas and Societe Generale may see whole areas of savings leave their record to head the Caisse des Depots (CDC) that centralizes regulated savings in France.

According to Pascal Decque, an analyst at Cheuvreux, some 83 billion euros of savings could then migrate to the CDC. 

Such a transfer would be another blow to banks

French who have already lost 90 billion euros of deposits last year due to concerns of investors about banks' exposure to Greece and the financial crisis.

"You have liquidity pressures in all sectors for French banks," said Andrew Lim, an analyst at Espirito Santo. The program of Francois Hollande "will put pressure on the deposit market."

Societe Generale has declined to comment on the subject while at BNP Paribas messages left unanswered.

NON-DISCLOSURE OF BANKERS

This regulated savings, which comes mainly from the Booklet A, is collected by the banking networks and centralized at the CDC in exchange for a commission paid to banks. The funds raised finance housing projects, infrastructure and other public projects.

According to statistics from the CDC, the outstanding book A and the LDD reached 295.1 billion euros at end-March.

Leaders of French banks, already reluctant to the idea of ​​a banking reform that would isolate the activities according to their usefulness or not the economy, principal concern is that beyond the housing market deposits and the financing of major projects is entrusted to a public bank.

"Liquidity is our raw material, (Reform Booklet A, Ed) does not help us," said May 10 Perol President BPCE (People's Bank, Savings Bank), parent company of Natixis, radio BFM Business. "It's weird to send money to the Deposit which has no bank branch when there are French banks have 40,000 branches."

"French banks (…) have employees willing to work and to make loans to businesses that need," he added.

The CDC is well mobilized, through its infrastructure fund and Axa Private Equity and Vinci, to fund future high-speed line (HSL) between Tours and Bordeaux, an investment of more than seven billion euros.

"Is it necessary to finance SMEs by the CDC and insurers?" Plague a Parisian banker who requested anonymity. "With Francois Hollande, there is the return to France with the idea that the state does better. This is an old French fantasy. "

Reform of regulated savings" will destabilize the banks, "he says

. While many observers believe that with the new Basel III prudential banks can no longer finance long-term projects, some believe, however, that the state will not only fulfill these investments

. "The challenges of financing long-term investments can not be met if we depend only of a public actor, "says Gerard de la Martiniere, former president of the Federation of French society ; s insurance (FFSA)

.

The typical value of a payday advance is upwards of 1,500 and the sum is usually given over a period of up to 30 days. However, these figures can vary between faxless payday loan lenders and when looking for a payday loan lender it's important to find one that meets your exact needs and requirements.

Industrial production grew only by 9.3% in April against 11.6% in the first quarter. This is the lowest figure since May 2009. Retail sales, exports and investment also slow. A factory in China flat panel displays.

China announced Friday a slowdown in inflation but also the smallest increase in industrial production in almost three years, two factors that should prompt the government to further relax its monetary policy to stimulate growth.

Industrial production grew only by 9.3% in April against 11.6% in the first quarter. This is the lowest figure since May 2009 when the increase was 8.9%. "The Chinese economy is even weaker than expected, with growth of industrial production in the single digits for the first time since the global financial crisis," said Alistair Thornton, economist at IHS Global Insight, based in Beijing.

Any effect of the second world economy is also reflected in a slower increase in retail sales, gauge consumer spending, which rose in April by 14.1% year on year, against 15.2% in March and 14.8% for the entire first quarter. "The figures of consumption and production (industrial) showering even more hopes for a resumption of rapid growth in China," said Mark Williams, an analyst at Capital Economics.

Finally, investments in fixed capital, contributing to over half of the formation of the Gross Domestic Product (GDP) of China also see their rise on a year to slow to 20.2% for the first four months of the year, whereas it was 20.9% for the first quarter. These weaknesses of the economy should prompt the government to ease its monetary policy, especially since the rise in consumer prices slowed to 3.4% yoy in April, against 3.6% in March.  

The level of inflation remains well below the 4% threshold set in March by the government, which closely monitors the evolution of prices to maintain social stability in a politically sensitive period, with the coming to power a new generation of leaders scheduled for the fall. On a year, food prices remain the main contributor to the rise, with 7% growth, which disproportionately hits the poorest households because they spend a larger portion of their income on food. But about a month, food prices fell 0.9% in April.

"The priority for the Chinese economy is not inflation but rather how to maintain economic growth," he told AFP Liao Qun, an economist at China Citic Bank International in Hong Kong. The producer price, which provides an early indication of future inflation, for their part, declined year on year by 0.7% in April. They had already declined in March but only 0.3%. "The extremely low index of producer prices will be one of the main factors that will force the government to further easing" monetary policy, according to Mr. Thornton.

Monetary easing seems all the more necessary that the Chinese economy is less and less driven by export growth, which suffer from the debt crisis in Europe, and struggling to find a relay in domestic demand. In April, growth in exports over the year fell to 4.9% and imports were virtually flat with only 0.3% increase, according to figures released by Customs on Thursday. These figures are significantly below the target of foreign trade growth of about 10% by government decree in 2012.

This smaller increase in foreign trade of China has contributed to the slowdown in growth, from 9.7% in first quarter 2011 to 8.1% in the first quarter of this year. To support the activity, the central bank will soon lower the reserve requirements for banks, allowing them to lend more, analysts said. Two drops of these reserves, very high in China, have already taken place in December and February.

Deutsche Lufthansa on Wednesday released a quarterly loss higher than expected, attributed to the surging cost of jet fuel.

Operating loss for the first quarter amounted to 381 million euros against a negative balance of 169 million a year earlier. The consensus gave a loss of 289 million euros.

The German airline, which must publish all of its accounts Thursday, has also reported a turnover up 5.6% to 6.6 billion euros.

Lufthansa has also reported a net loss of EUR 397 million against a loss of 507 million a year earlier.

It anticipates for 2012 an operating profit of around 500 million euros.

Economists and analysts are far from unanimous on the eve of the first round of presidential elections on the possible impact of the vote in the markets and the debt of France.

This uncertainty was reflected in an excitement on the market of the French debt, whose resistance was tested Thursday on the occasion of a rumor of dice gradation of the sovereign rating of France.

"The continuation of the gap (between the French and German rates) depend on the evidence that will give the next president of the Republic of the fiscal framework that will implement , and this will depend on the coherence between the presidency and the majority it will enjoy in the Assembly, "said CM-CIC Securities in a note. 

The first round results on Sunday, to measure the influence that extremes may have on the face of the next National Assembly, while a socialist majority in the Senate and that a victory of Francois Hollande in the second round of presidential elections is seen as the most likely outcome among market professionals.

Uncertainty, they agree to say, will remain until the June parliamentary, government's announcement will come out and the decisions it will take to reduce budget deficits ; TARY. 

But, says Guillaume Menuet, an economist at Citigroup, "the markets could react negatively, especially if the candidate of the far left reaches Jean-Luc Melenchon third me, allowing his party and his Communist allies to influence policy, even at the margin ".

"DEBT RESISTS WELL"

A rate strategist at a major bank, who noted the relative stability of voting intention polls, sees no movement on the scale of market unless the two finalists are not Nicolas Sarkozy and Francois Hollande.

"There will not necessarily flow as a seller there is no flow buyer. Like right now, people will stay on the side," he said. He noted that currently, "(despite) the absence of flow buyer, the French debt up well", even as concerns over the euro area are back.

The French rate to 7 years maturity corresponding to the average of the entire French debt, varies from a low of 2.28% in early February 2.5% today, representing a decrease of 22 basis points only.

Many investors point out that the current market will continue to revolve around the financial situation of the countries 'peripheral' in the euro area, regardless of the next tenant of the Elysee. 

"We continue to believe that the first factor in the evolution of spreads will be the evolution of French spreads devices and macroeconomic prospects of the debt crisis in the eurozone" write economists and strategists from Barclays. "The elections will be a secondary factor behind Spain and Italy."

But for Robert Crossley, rates strategist at Citigroup, "the market seems serene, wrongly, on the prospect of victory in Holland. This victory is likely to result in a defeat on the economic front and market confidence "

." Mê ; myself skimming the election rhetoric, the hostility of Holland to the business world and his lack of experience in finance and bond markets begin to undermine the fragile market confidence, "he says

. He however advised to buy the debt of France to favor of widening spreads (yield spread with German debt, refer to the euro area) related to political uncertainties, this spacing to be temporary according to him. He suggests buying French bonds at 10 years and sell bonds or Austrian Belgian with the same maturity.

Meanwhile Sunday, the spread between the yield of the French loan to 10 years and its German equivalent has deviated 29 basis points (bps) since April 12, at 140 bps. The rate of the French loan to 10 years was him, stretched by 21 bps to 3.10%.

On the market very illiquid sovereign CDS, a sort of insurance policy against a default, the spread of the 5-year CDS of France rose from 177 to 210 points from 12 in April.

On the stock market, strategists advise to stay away from French values ​​facing their domestic market but to buy the CAC 40 index.

"The CAC 40 is not France," wrote Credit Suisse those that say that 66% of the turnover of the 40 companies in the benchmark index of the Paris Bourse are outside France, and 36% outside the euro area.

Tesco said Wednesday it would spend a billion pounds (1.2 billion) to overhaul its operations in Britain, where he seeks to regain market share, to re ESTABLISHING sales growth and to calm shareholders became nervous.

The emphasis on revitalizing sales implies that investments will be reduced to 3.3 billion pounds in the coming year against 3.8 billion last year.

The third global retailer also said its U.S. subsidiary successfully stalled later than expected.

Tesco dominates the segment of food retailing in Britain with a market share of 30% but in January it launched its first profit warning in 20 years. 

British retailer also announced a profit before tax of the group and exceptional up 1.6% to 3.9 billion pounds on the financial year ended February 25.

The consensus of analysts conducted by Tesco itself gave 3.88 billion, compared to 3.81 billion pounds for the year 2010/2011.

Operating earnings in Britain, where Tesco makes more than 70% of the balance, decreased 1% last quarter, while sales on a comparable basis fell 1.6%.

STMicroelectronics (ST) announced Monday that an arbitral tribunal ordered it late last week to pay $ 59 million (45 million) to NXP Netherlands, leading manufacturer of semiconductors ; to lower its margin guidance for the first quarter.

"This award follows a dispute between ST and NXP that involved a claim by NXP for certain operating expenses to be added to the price of chips provided by NXP from 1 October 2008 and 31 December December 2009 to the joint venture created by ST in the field of mobile, "the company said in a statement.

"This award will be reflected in the income statement of our first quarter 2012 and we believe it will negatively impact our cost of sales. This will in turn have a negative impact on our gross margin by about 2.6%. "

ST adds thereby lower its pre ; cédente forecast results for the first quarter as a result of this unexpected exceptional charge, to about 30.4%

.

Increasing the number of unemployed is expected to slow in February, according to the head of state. He sees a sign of economic recovery. For the month of February, Nicolas Sarkozy expected to increase "quite moderate" unemployment.

The president candidate unveils unemployment figures in February. Nicolas Sarkozy says the monthly unemployment statistics, which will be published on Monday evening show "a fairly moderate increase" the number of job seekers for February.

"The numbers tonight will demonstrate an improvement in the situation with a declining trend in increasing the number of unemployed. This increase is quite moderate," Sarkozy said on France Info. He said it "reflects a significant economic recovery since we tried to solve the financial crisis in Greece, this financial crisis that created a crisis of confidence, which itself creates an economic crisis".

In January, the number of unemployed rose by 0.5% compared to December, a rate cut in half compared to previous months, the total number of unemployed at 2.8 million people.

Salaries revved up on the Asian continent. In some Chinese provinces, the minimum wage is the same as in Romania. But China is really less competitive? A factory in China flat panel displays.

Competitiveness of Asia is it falling? The English-language newspapers and French launch debate, astonishing figures to support. The Wall Street Journal, remuneration ignite the entire Asian continent. In Thailand, the minimum wage should be increased by 40% in early April. In Indonesia, it has already increased by 20% in many areas in recent months. In China, wages have jumped 181% since 2004. In several parts of China, the minimum wage is now at the same level as Bulgaria and Romania, the newspaper Les Echos.

This surge in earnings, barely slowed by the crisis, he signs the end of the "low cost" in Asia? It is still too early to tell. Certainly, if one believes the economics textbooks, China and its neighbors will lose, with wage growth, competitive advantage in sectors intensive in labor, such as textiles and electronics. A phenomenon which should result in a second step, an upscale Asian.

Except that on the ground, it's not really what we observe, notes Francoise Lemoine, China economist at CEPII. In recent months, China's exports, for example, slowed less quickly than international trade. In other words, the weight of the Middle Kingdom in trade has rather strengthened over the recent period, although the announcement of a record trade deficit has cooled the market!

Moreover, China still has a structural advantage in competitiveness. Wages are only part of the story. We must also look productivity, says Francoise Lemoine. It increases by 10% per year. And foreign companies operating in China are careful not to let this figure decreasing through investments. Indeed, even if wages increase rapidly, especially in the eastern regions which provided further in 2009 nearly 90% of exports, their growth does not exceed that of productivity frankly. Ultimately, the competitiveness of China is still largely preserved.

Especially since the Middle Kingdom has another asset: its reservoir of manpower. China continues to move part of its production in the inland provinces, where wages are lower. Of course, Beijing began a decade ago a rebalancing policy, which should eventually lead to an increased weight of consumption over exports. But do not misinterpret this policy: China has not given up being an exporting nation, says Francoise Lemoine.

In fact, given its advantages, China may well remain very competitive for ten years. However, its scope for growth in the markets today is much lower than that of a decade ago, due to wage increases of course, but also because of the proliferation of protectionist measures, such as the segment solar panels. One statistic sums up the situation in China. Its share in world exports of manufactured goods reached 16%. But in the past, this level has always been a peak for the major exporting countries, whether the United States, Germany or Japan.

Privatization of tax collection, open to private hospitals, creating a single tax on companies by 15%: the leader of the Conservative party of New Democracy, Antonis Samaras, on Wednesday presented his recipes out of the crisis. The Leader of the Conservative party of New Democracy, Antonis Samaras.

The France of the ancien regime had its tax farmers to collect the tax in place of the state. Greece does go so far if the leader of the Conservative party of New Democracy, Antonis Samaras, came to power after the next election? Among his proposals to end the crisis, because it evokes a form of outsourcing privaisation or tax services.

"We advocate a single tax on companies by 15%, and at the same time we must ensure that there is not a crook in the system (tax, NDR). If necessary, we will use the type of private KPMG (audit firm, ie) to help us collect taxes, "said Mr. Samaras a delegation of journalists Spanish, Portuguese, French and Maltese visit Greece on the initiative of the European Commission. "We will use outsourcing services even if we also try to make public employees more competitive," said Mr. Samaras, whose party is leading the polls for upcoming elections in Greece, planned a priori in May

. Mr. Samaras reiterated that his party was committed to "submit to the policy "contained in" Memorandum "(the RAP of the economy) signed by Greece with its European partners in exchange for loans vital for the country. "We ask only a modification of certain policies to promote growth and stop the cycle of recession," he emphasized, however.

Greece is in recession for the fifth consecutive year. Questioned by the press on the responsibility of his party, in power between 2004 and 2009, in the current crisis in Greece, Mr. Samaras was rather minimized by rejecting most of the blame on the socialist party PASOK, with which He currently shares the power within the coalition government led by Lucas Papademos. "I do not mean that my party has no direct or indirect responsibilities in what took place

. We have not done some things we should have done, but PASOK did things he should not have done, "he said. "We have privatized Olympic Airways (…) but we have not privatized enough," he said, also refusing to recognize a liability for his party in the inflation of the country's public deficit in 2009.

Revision of deficit by the Socialists in 2010 (from 6% to 15% of GDP), which has crossed to Greece access to capital markets by triggering the IMF and the European Union (EU) for Rescue of the country, the subject of an intense political battle between New Democracy and PASOK. "To restore the credibility of Greece in this area, we did the right thing by appointing an independent person at the head of the statistics agency," said Secretary of State for Finance Yannis Mourmouras, this the meeting. "There is more political interference," he said. Moreover, on immigration, Mr. Samaras said he was "determined" that Greece "does not become a magnet for immigration" asking "a common policy in Europe" on the subject.

March 11, 2011, a violent earthquake struck Japan, followed by a giant tsunami that resulted in the Fukushima nuclear disaster. Quantitative assessment, inventory of nuclear stock of the Japanese economy: five links to learn more about this sad anniversary. Tepco employees check the levels of radioactivity of the nuclear accident in Fukushima, in the province of Daiichi (northeastern Japan)

There are just over a year, March 11, 2011, northeastern Japan was devastated by an earthquake measuring nine coupled with a tsunami of historic proportions. The disaster has claimed thousands of victims, caused enormous damage and caused the nuclear accident at Fukushima.

In pictures, the great figures of the earthquake

Minami-Soma, city of Fukushima prefecture, was devastated by the disaster. This small coastal town near the nuclear power plant has lost thousands of its inhabitants. The survivors are now wondering about their future. Many have already fled. Remain ghosts and memories.

Report: After Fukushima, the city of Minami-Soma broken

That day, March 11, 2011, Naoto Kan, the then Prime Minister of Japan, was in the upper house of the Diet, where he answered questions from the opposition. Exclusive to L'Express, he tells how he lived and managed the disaster crisis.

Interview: "Fukushima has a human cause"

The disaster cost the Japanese economy has plunged into recession. Japan's GDP fell 0.7% in 2011. The country now seems out of crisis. Growth expected to reach 2% this year. But this rebound is largely artificial.

Analysis: What is the Japanese economy?

The Fukushima nuclear disaster has brought discredit to the entire industry. Fear of nuclear is back in the public opinion of developed countries, pushing many governments – including Germany – have announced their willingness to exit this mode of energy production. Yet it is clear that today's nuclear industry is doing well. Besides the contrasting reactions in the West, emerging countries are determined to take advantage of the strengths of the atom.

Understanding: Why nuclear winter has not taken place

In Japan, only three of 54 reactors still operating aujoud'hui. That of Fukushima is stopped. The area is off limits, because the radioactivity level is high. Tepco, the operator says the situation is under control. Roland Desbordes, Commission President for Research and Independent Information on Radioactivity (Criirad), in doubt.

Interview: "The explosion in central Fukushima is still possible"

In France, where 80% of electricity is nuclear, Fukushima has shaken public opinion. The debate on nuclear phase-out has made a great comeback. A year later, ecology seems the most overlooked of the presidential campaign. Environmentalists, advocates of a permanent exit from nuclear, are credited with less than 5% of the vote. Their socialist allies negotiated a minimum agreement. A group called "Generation Fukushima", who fight against nuclear power, attempts to remedy this lack.

Read on Express Yourself: "Your nuclear legacy, we do not want it!"