Top Economics News

Several Directors of Veolia Environnement, whose CEO of EDF Proglio, are preparing to head the group's CEO, Mr. Frérot, reports financial daily Les Echos in its edition Monday.

The former Minister of Ecology Jean-Louis Borloo is among prospective successors, the newspaper said, predicting that a Board of Directors of Veolia Environnement scheduled on February 29 will be crucial.

Contacted by Reuters, a spokeswoman for Veolia declined to comment.

Moody's downgraded the outlook of the Aaa rating of France to negative from stable, reflecting the agency said uncertainty surrounding the economy of the euro area and the ambitions of Paris in terms of re production deficits.

The U.S. rating agency also adjusted notes and perspectives of eight other EU countries including the United Kingdom and Italy.

The call to order by Moody's comes a month to the day after the decision by Standard & Poor's reduced the rating by one notch from France, from AAA to AA +, in D action to the deepening debt crisis. 

Moody's maintained its Aaa rating of France, the best possible, but warned that it could be a reduction if the government failed to implement its economic reforms and budget.

The euro and British pound fell against the dollar after advertising.

In a statement released Monday night, the agency notes that the uncertainties related to institutional reforms envisaged in the euro area, coupled with anemic growth prospects in the region, continue to affect the confidence of financial markets.

Moody's also believes that the figures of the French debt continue to deteriorate and that France is among the countries rated Aaa "weaker" in this field. 

The agency also highlighted "significant risks" which the French government will face in achieving its objectives of reducing public deficits.

BAROIN NOTES

"These could be further complicated by the need to help other European countries or its own banking system," reads the document.

The economy minister said Tuesday Baroin "take note" of the decision by Moody's.

"The government is determined to continue its action for growth, competitiveness, including the reform of financing of social protection, employment and reducing die ; ficits public, "the ministry said in a statement. Bercy added that government policy "is part of a framework and methodology of long-term".

The Elysée and Matignon did not react immediately.

The Socialist candidate for president, Francois Hollande, did not want to throw fuel on the fire and has insisted that France was not in the same situation that Greece, in the throes of a violent protest after degradation and austerity plans repeatedly.

"We are not in this situation and those who make this comparison do to scare the French," he said on RMC and BFM-TV. 

Arnaud Montebourg, "third man" of the Socialist primary, responded by criticizing the role of rating agencies: "The rating agencies, everyone understands that they play a toxic role and Moreover perverse ", he said on France Inter. "For me and for many (…) they are charlatans."

For Labour Minister, Xavier Bertrand, zero can not ignore the verdict.

"It also shows very clearly that no candidate will escape the rules of good management in the months and years ahead and it shows very clearly that with the program (…) economic and social Francois Hollande, the account is not (…) and that there would necessarily be a further degradation, "he said on France Inter.

The government has this week at the National Assembly a bill supplementary budget with the key measure, an increase in VAT to finance social protection, is highly contested by the opposition and trade unions. 

ON BOTTOM OF GREEK CRISIS

Beyond French borders, the sovereign debt crisis in the euro area is growing.

The Greek government was asked Monday by its European partners to submit further proof of its commitment to reform despite the adoption, on the eve of an austerity plan rity by a parliament besieged by thousands of protesters.

These provisions are required by the "troika" (International Monetary Fund, European Union and European Central Bank) in exchange for an aid package of € 130 billion found essential before March 20, when an important deadline for the country's debt (14.5 billion euros to repay). 

Moody's had warned Jan. 16 that it was considering the prospect of the note of France and it would update the country scores of the European Union in the first quarter.

Standard & Poor's and Moody's had worried about the drift of French public finances while warning against the risk that the government's economic reforms are undermining growth, pillar which is based precisely on Paris to try to achieve its objectives of consolidation.

In fact, the government postponed last week of 2013 to 2014 the decline in its ratio of debt to gross domestic product due to the participation of France in the European Stability Mechanism (MES ), which must support States in the euro zone in trouble, and growth forecasts reduced from 1 to 0.5% this year. 

Commitments to reduce the public deficit is confirmed, however, to 4.5% of GDP in late 2012 and 3% in 2013.

But the Court of Auditors, which certifies the accounts of the State, estimated that only 10% of the total effort that must be capable of reducing to zero the structural deficit in France – in 2016 from Bercy – had been achieved last year.

Repair cracks appeared on the wings of the Airbus A380 jumbo could cost up to 100 million euros in the aircraft manufacturer, writes Der Spiegel Sunday.

The identification and repair of cracks on the 69 aircraft already in service would cost in themselves within 70 million, thirty million then being attributable to a change production procedures, continues the weekly said, citing experts and people of Airbus.

Der Spiegel also quoted a spokesman for Airbus, an EADS subsidiary, which states that a long-term technical solution will be found by the summer, without comment on the cost. 

European authorities are preparing to extend the inspection process to all Airbus A380 fleet after the discovery of cracks on the wings of some copies of trè s jumbo jet, said on Wednesday sources close to the matter.

Moreover, in an interview published Monday in WirtschaftsWoche, Louis Welsh, CEO of EADS, said he wanted make 350 million euros in savings this year by unifying procedures for various business functions.

He added that in view of recent successes in the U.S., EADS should seriously consider building a plant there.

Welsh also said that the A320neo should be profitable in its first delivery in October 2015. "Development costs are limited and therefore we will have depreciated even before the start of production" No he said.

German exports in December accused their most marked decline in almost three years, the first sign that the euro area economy has suffered heavily in the last quarter of re percussion of the debt crisis.

But the figures of the Federal Bureau of Statistics also show that exports have reached record levels in all of 2011, and, according to the latest predictors, the German economy is back on track after a brief contraction.

"Earlier this year, the outlook for the German economy is better, while the global economy gathers momentum and the uncertainty surrounding the debt crisis eases ", Ulrike Rondorf analysis, economist at Commerzbank. 

The euro stood Wednesday peaks several weeks against the dollar and the yen, investors hoping to make Greece the austerity measures demanded in return for a second bailout.

On a seasonally adjusted, German exports fell 4.3% in December, their most marked decline since January 2009. Economists polled by Reuters on average expected a decline of only 1.0%.

The trade surplus has settled to 13.9 billion euros after 14.9 billion (revised figure) in the previous month and 14.0 billion expected.

THINNING FOR

The German economy, export-oriented, quickly recovered from the 2008-2009 financial crisis but the budgetary problems of the euro area and the global economic downturn have clouded his growth prospects.

The first official estimate reported a contraction of 0.25% of gross domestic product (GDP) in the fourth quarter and German economic indicators in December were more still bad as feared. 

Industrial production in December suffered its biggest decline since early 2009, heavily disappointing expectations.

Economists were betting on domestic demand to support the economy and anticipated imports up 0.6% in December, but they fell 3.9%.

The trade surplus of Germany, however, reached 158.1 billion euros in 2011, after 154.9 billion in 2010.

This contrasts sharply with the trade deficit of France, which last year reached a record 69.6 billion euros.

The economic forecast surveys also suggest that the slump in the German economy will be short lived. 

The business climate has improved in January for the third consecutive month, while consumer confidence in the horizon of February rose against all odds at its highest level in ten months.

Over the full year 2011, German exports exceed 1,000 billion euros. And the trend is rising: industrial goods orders rose 1.7% in December, despite the erosion of demand from the euro area on the bottom of the debt crisis.

"With the 2008 financial crisis, the importance of different export markets of Germany has changed somewhat, declining slightly in Europe and the rest of gaining importance worldwide, "said Anton Börner, director of industrial consolidation BGA.

The rapid increase of the debt crisis in the euro area threatens the credit ratings of all European states, warned Sunday the U.S. rating agency Moody's. Moody's in New York.

In a "special comment" on European countries published Sunday, Moody's says it still considers that the euro area will maintain its unity without any fault as that of Greece, but notes that even this' scenario 'positive' carries consequences very negative for the notes "of European countries. The U.S. rating agency, recently warned that France could lose its "triple A" allowing it to borrow at favorable rates in the markets, and clearly indicates that no country, even among those considered most solids, such as the Netherlands, Austria, Finland or Germany, is immune to a lowering of note.

Other countries may need help

While countries such as Italy and Hungary have more and more difficult to obtain financing at rates viable markets, Moody's wrote that "the political momentum to implement an effective solution to the crisis could n ' be found after a series of shocks, which could lead more countries to be deprived of access to funding markets for an extended period. " The agency is referring to countries like Ireland, Greece, Portugal or Hungary, which have benefited from one or more financial rescue from the European Union or the International Monetary Fund. She said other countries may need to use this kind of solution if the EU fails to quickly find an adequate response to the crisis, these countries would then most likely lowered their rating to that of a investment "speculative."

Greece has one last chance to stay in the euro area and must make a "maximum effort" to avoid being brought back several decades, warned Wednesday the central bank Hellenic.

Painting a picture severe the nation's finances, the Bank of Greece said that the failure to achieve its fiscal targets, delays in implementation of reforms and strong economic contraction had questioned his recent claims about the sustainability of the country's debt.

"The country must avoid at all costs further delays or deviations from objectives; every effort is needed to do better than the targets," said the Bank in its interim report on monetary policy.

"The current situation is the most critical period of Greek history of the postwar period. What is at stake is whether the country will remain within the euro area."

The new prime minister, Lucas Papademos, promised to push reforms forward, although he met a mixed support for the main parties and trade union opposition to the new austerity plan which he has committed.

Equity markets have appeared hesitant and versatile throughout the session. The European equity markets ended in a disorganized, while at the same time, Wall Street also hesitated between increases and decreases.

Investors have welcomed the drop in bond yields Italian and Spanish through purchases of securities by the European Central Bank in the secondary market.

Traders also mention the idea that the ECB would lend the International Monetary Fund (IMF) to assist countries in the euro area.

But operators remain skeptical, however.

The new Italian Prime Minister revealed the composition of his government. In addition to its status as prime minister, he will take the reins of the Ministry of Economy at a time when the country is under pressure from the markets. Mario Monti.

The new Italian Prime Mario Monti said on Wednesday it would also economy minister, after his team presented to the President of the Republic Giorgio Napolitano. The former European Commissioner, 68, was named to replace Silvio Berlusconi as head of government while Italy is in danger of suffocation from the weight of its debt.

Monti also decided to create a large Ministry of Development, Infrastructure and Transport told the boss that the second national banking group Intesa Sanpaolo, Corrado Passera. Mr.Monti said the combination of these three portfolios within the same department by the "logic" to "put more centrally coordinated initiatives for economic growth."

Other key ministries were entrusted to experienced technocrats: Foreign Affairs to Ambassador Giulio Terzi di Sant'Agata, the Defense Admiral Giampaolo di Paola, the Interior to Prefect Anna Maria Cancellieri. Corrado Clini, Director General of Ministry of Environment in the last 10 years, was appointed minister. The government of Mario Monti has a total of three women who take charge of Justice, Interior and Labour and Social Policy, said Mr Monti.

After the Senate Friday, the Italian Chamber of Deputies adopted late Saturday afternoon the law of financial stability, a step that paves the way for Berlusconi's resignation and the formation of a new government.

Berlusconi, who was unable to obtain an absolute majority Tuesday, promised to resign after the Italian parliament have endorsed the law of financial stability, requested by the European partners of Rome to restore market confidence in public finances Peninsula.

Silvio Berlusconi is expected to recover in the next few hours his resignation to President Giorgio Napolitano. It is the former European Commissioner for Competition Mario Monti should succeed him.

Thirty-six, 38, 42 and maybe tomorrow as 50 per month when Airbus increases production rates of its single-aisle aircraft, it's party time for subcontractors in the aerospace industry.Unless the funds to finance the necessary investment will come running out.

These suppliers, some of which also work for Boeing in the interest of diversification, are technically ready to follow the ups cadence, but sometimes have difficulty obtaining financing from their bankers, actors and observers believe the industry.

Driven by the boom in Asian demand swells order books, manufacturers accelerate the pace, especially in the aisle – the segment of medium-haul flights of 150 seats – the most lucrative and most promising of the civil aviation with a value estimated at some 2,000 billion over the next 20 years.The 'supply chain' will fit, maybe it will grind a bit in the ramp-up, but we adapt, "he told Reuters Jean-Claude Maillard, CEO and founder of Figeac Aero, under contractor to Airbus, which finds that up to 48 or 50 units per month is "quite possible".

He echoed the statements of President of the Group of aerospace equipment and defense (GEAD), Olivier Zarrouati – also CEO of Zodiac Aerospace – who recently told Reuters that a growing number of production plants for OEMs keep up the pace aircraft manufacturer was not required.

"You can go to heaven, there is no limit", says David Bonnus, aerospace expert with the firm Step Consulting.