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)

.

Adecco is Tuesday first-quarter results better than expected, while announcing that the European environment is expected to remain difficult as North America, the second largest market of digital ; ro a global placement of personnel, should instead continue to do well.

The net result of the first three months of the yearâ increased 12% to 112 million euros, while analysts polled by Reuters had expected on average 100 million.

"We started in 2012. The turnover of the first quarter of 2012 is almost the same level as in the first quarter of 2011, a solid performance given the headwinds that blow in Europe, "says Patrick de Maeseneire, Director General ral of the Swiss group, said in a statement

. "Our sales in North America continued to hold up well." Revenues

the period rose 2% to 5.035 billion euros, against a consensus of 4.991 billion ..

……. Randstand, Dutch rival Adecco, spoke about the uncertain developments in Europe while the U.S. pre Manpower said ; see a double digit decline in southern Europe in the second quarter

.

Lloyds has surprised investors by announcing Tuesday a 36% reduction of its bad debts and a quarterly profit after the loss of 3.5 billion pounds (4.3 billion) realized a year ago.

At midday, the action of the British bank and advanced 2.32% to 31.73 pence while the FTSE 100 London Stock Exchange, the only open in Europe in May 1 , gained 0.24%.

The UK bank has yet announced that it had a fresh supply of 375 million pounds (459 million) in its accounts for the first quarter to cover the reimbursement of customers who potentially overpaid for certain insurance policies. 

Lloyds 40% owned by the State since the 2008 financial crisis, said the increase in provisions in the case of insurance policies had been decided e given the increasing volume of complaints received, echoing comments made by Barclays last week about it.

Last year, Lloyds had already funded £ 3.2 billion for the same reasons.

The group also said that the sale of 632 programmed agencies made little progress, while being pessimistic about the UK economy, fallout recession in the first quarter.

"We think the economy will stagnate this year but it will be a long and difficult recovery. We anticipate a resumption of growth in 2013 and a peak in unemployment of almost 9% early next year, "said Antonio Horta-Osorio, Director General ; ral

. Lloyds bank has cleared the first three months of a taxable income Statutory 288 million pounds over the period, against 316 million the previous quarter

. The largest British settlement in terms of customers reported a level of bad debts to 1.7 billion pounds

.

European shares ended sharply lower Monday, falling to a low of three months while disappointing economic indicators in the eurozone and political uncertainty in France and the Netherlands are threatening to stir the sovereign debt crisis in Europe.

In Paris the CAC 40 finished down 2.83% to 3,098.37 points, its lowest level in four months. The UK FTSE lost 1.85% and 3.36% the German Dax, while the pan-European FTSEurofirst 300 index lost 2.32%.

"The economic dynamics in the euro area is weakening and it will be more difficult for governments to achieve fiscal targets in an environment of low growth," said Emmanuel Cau, strategists ge at JPMorgan AM.

The sector index Stoxx 600 banks in the euro area fell by 4% to its lowest level since last November.

GDF Suez was down 2.68% despite increased performance in the first quarter thanks to Britain's International Power. It also confirmed its annual targets.

STMicroelectronics, largest decline in the CAC 40, fell 13.8% after the announcement of a further restructuring of its joint venture ST-Ericsson.

Dutch Prime Minister Mark Rutte said Monday it has presented his government's resignation to Queen Beatrix, who said she would consider it, paving the way for the e selection of a new parliament.

In France, Socialist Francois Hollande, topped Sunday, and the outgoing president, Nicolas Sarkozy, launched the campaign for the second round on May 6, whose outcome will depend part of the attitude of the voters of Marine Le Pen, the candidate of the National Front. 

On the purely economic front, the flash PMI released in the morning came out below the most pessimistic estimates and raised fears a continuing recession in 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%.

The CEO of Qatar Airways has expressed interest in studying the case of aircraft developed by countries such as China, given frequent delays at Airbus and Boeing.

Akbar Al Baker, who regularly criticizes two giants of the aerospace industry not to take their time, said Monday that delays of up to three years had thwarted growth plans of carriers in the Gulf region, which now constitute much of the Western demand for appliances.

Qatar Airways has ordered the Boeing 787 Dreamliner, the Airbus A380 superjumbo and the A350, three devices that did not meet delivery dates announced. 

The airline has also ordered smaller devices to 150 seats, as the A320neo. She ordered 50 during Dubai Airshow in November.

Asked if he would consider buying Chinese equipment, Akbar Al Baker said: "Why not? If it is safe, effective, advanced and that it meets the requirements."

The Chinese Comac develops a 150-seat aircraft.

Industry leaders argue, however, it will take at least ten years before China can compete with Boeing and Airbus on larger aircraft.

Interviewed by three regional newspapers, Nicolas Sarkozy accused of "permanent CFDT" having "betrayed the trust of employees" in Florange. It was already taken last month at the SGC. President and candidate for reelection Nicolas Sarkozy (here Aytre February 21, 2012)

The bridges are cut between Nicolas Sarkozy and some unions. In an interview with three regional dailies – Eastern Republican, Rep. Lorraine and Vosges Matin, the presidential candidate accused of "permanent CFDT" of having "betrayed the trust of employees Florange", an attack that responds to criticism against the SGC in March, accused of trying to "play a political role". In fact, the CFDT and the CGT do not hide their anti-Sarkozyism.

Read also: Why the unions have lost their neutrality in 2012

When asked by the newspapers to "anger rising in Florange," Mr. Sarkozy responded: "Let's not confuse the workers, and worried that I got for 17 million euros investment and staff of the CGT or CFDT, two million of work done on the liquid phase immediately-this-works started, 7 for coke, 8,000,000 to the manufacturing plant of automotive products. " "This investment is for Florange! It is decided. If this work had not been committed, it was certain that the blast did not return," added the incumbent.

"As for the permanent of the CFDT," he added, "they betray the trust of employees. They came to insult me ​​and try to break my campaign headquarters. Do not confuse the employees of Arcelor-Mittal, which I will not let go, and trade unionists who cheat their members by making policy instead of defending the interests of employees ". Mid-March, about 200 steelworkers steelworks Florange had come to Paris with the intention to go before the campaign headquarters of Nicolas Sarkozy as a large police had been deployed. Brief scuffles had broken out then with law enforcement.

Roche said Thursday it raised the price of its unsolicited offer on American society Illumina to $ 51 per share, against 44.5 dollars previously.

The new price values ​​the American specialist of gene sequencing to more than $ 6 billion (4.5 billion euros), Roche hoping to make a difference before the general meeting of the group from San Diego to be held next month.

"Based on our discussions with shareholders of Illumina, we collected the interest of accelerating the acquisition process. Accordingly, we are increasing our price to $ 51 per share, "said the Swiss pharmaceutical group Roche said in a statement

. has pre ; fied that the other terms of its offer remained the same and he still favored the opening of negotiations

. Monday, the group Basel had indicated that it was extending its offer again, without changing the price and making it run until April 20

. Roche softens its position, while its CEO Severin Schwan repeated that he did not raise its offer. But nothing says that this gesture will be enough to persuade shareholders, analysts suggesting a price of $ 60 per share, better able to convince the recalcitrant.

Illumina was adopted in late January the principle of a "poison pill" by distributing as a dividend right to purchase preferred share per share outstanding at February 6, exercisable if a shareholder reach or exceed the threshold of 15% stake.

Barcelona and Madrid are struggling to accommodate "Eurovegas", a project that could generate 164,000 direct jobs and 97,000 indirect jobs. An employment agency in Malaga. Spain has an unemployment rate above 20%

Under the slogan "No Eurovegas", a platform to mobilize citizens to Spain to fight against the project a huge casino complex, inspired by Las Vegas and expected to provide over 260,000 jobs in a country affected by unemployment record.

"It's the return of the economic model of the building to a fault, it's not a sustainable source of employment," denounced one of his representatives, Ana Sanz, during the presentation of the platform form in Madrid on Wednesday. "This project is going back to a model that failed with the crisis," added another member of the group, Carlos Ruiz.  

"This project" is a huge complex centered around the game, which are fighting for the two largest Spanish cities, Barcelona and Madrid. "Eurovegas" as he was nicknamed, involves the construction of six casinos, 12 hotels offering 36,000 rooms, nine theaters and three golf courses, according to Spanish media. It will generate an investment of 15 to 18.8 billion euros and the creation of 164,000 direct jobs and 97,000 indirect jobs.

Its promoter: the gaming giant Las Vegas Sands, owned by American billionaire Sheldon Adelson, who is expected to announce in early summer if the giant complex will be the day or not, and if so, which of the two cities is drawn . But official data are not easily accessible and opponents denounced Wednesday "opacity" surrounding the project.

The numbers of jobs "that we are selling are not real," says Ana Sanz also. Mired in crisis, Spain in late 2011 showed a record unemployment rate of 22.85% and almost a quarter of its workforce (24.3%) should be unemployed by the end of the years, according to government forecasts. In this grim context, perspective, even fuzzy, a project expected to generate 261,000 jobs enthusiasm the political and economic leaders.

"More than half of Madrid unemployed could find work", was launched in February the President of the Madrid region, Esperanza Aguirre, saying negotiate with billionaire since 2006. "We will change all the rules need to be changed, so long as is consistent with our principles", she also promised. For its part, the president of Catalonia, Artur Mas, has said the project would drain a "quality tourism".  

In addition to a return to the worst excesses of the housing boom that fueled the Spanish economy until the bubble burst in 2008, critics of "Eurovegas" denounce them preferential treatment, and legal tax proponents have claimed. "It will be a free zone where laws will be imposed by the investor," worries Carlos Ruiz. He said Las Vegas Sands would have required such that "any request for funding, the Spanish state shall guarantee" that "the project companies do not pay VAT," a moratorium "on ten years of taxes on the game "and further that" it changes the law on money laundering ".

Smoking would be allowed in the complex, while smoking is prohibited in bars and restaurants in Spain since January 2011. "There is a risk of opening the mafia of prostitution," added another representative of the platform, Cristina Fernandez. According to the spokesman for Las Vegas Sands, Ronald Reese, "negotiations with all levels of government are very advanced." "I assure you that these are not agreements that will change the structure (legal) Madrid, Barcelona or Spain," he added last week on public television. However, without reaching to reassure his critics.

Inflation rebounded 0.4% last month after falling in January. Blame the price of energy, those of fresh products and services.

The consumer prices fell by 0.4% in January in France, they bounce from 0.4% in February. This gives an inflation rate of 2.3% a year, said Tuesday the National Institute of Statistics and Economic Studies (INSEE). The indicator of underlying inflation, that is to say non-price (volatile petroleum products, fresh produce …) and administered prices (electricity, gas, tobacco …), however, has shown steady to 1.4% yoy.

In fact, the origin of the rebound in February lies partly in these volatile products. The pursuit of higher energy prices has thus resulted in an increase of 1% last month (7.8% yoy), in the wake of rising crude oil prices. This rise has affected the price of fuel (1.3% in February and 8.5% year on year) and those of liquid fuels (4.1%, 16.1%).

Fresh products also recorded a rise unevenly high (3.0% against 1.3% in February 2011; 0.2% yoy). These increases were particularly concerned vegetables (+8.7%). The particularly low temperatures have indeed affected the production and delivery of products.

Excluding fresh food, the food prices are increasing is only slightly (0.2%, 4.4% yoy). The price of spirits has continued to grow (1.9%, 5.8% yoy) and taxation of soft drinks has affected the prices of soft drinks, juices and syrups (0.9%, 8.5% on a year). Ultimately, food prices rose in February by 0.6% and 3.8% year on year.

Service prices are also victims of seasonal increases. Totaling an increase of 0.5% last month (1.6% yoy). With winter school holidays, accommodation holiday surged by 30.8% (5% yoy), while package holidays are appreciated by 9.8% (0.8%). Automobile insurance also rose by 2.6% (2.8% yoy), tolls and parking of 1.8% (2.5%), the Clean Water 0.8% ( 5.8%), distribution of 0.4% (2.8% yoy) and nursing homes by 0.3% (2.7%).

Prices of manufactured goods remained virtually unchanged, however (0.1%, 0.7% yoy). Excluding tobacco index of consumer prices rose in the same way from 0.4% in February (+2.2% yoy) and, seasonally adjusted, it rose 0.1% ( 2.3% yoy).

This decline

Conversely, price decreases were observed on the "other networks" (-2.9% -2.5% yoy) and telecom prices (-1.3% -7.6 % year on year).  

Among manufactured goods, clothing and shoes were flat (+1.7% yoy). Bedding rose 3.1% (7.7% yoy), perfume and beauty products by 0.6% (2.0%) and watches, jewelery, gold 1.7% (12.1%).

Promotions were the cause of the decline in new car prices (-1.4% +0.8% yoy). As for the price of pharmaceuticals, they fell again (-0.7% -1.7%) as those of Photographic and cinematographic equipment (-1.1% -13.9% yoy) and audio-visual (-0.5% -13.1% yoy).