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European Union

News Of Economy

EU warns China to correct its trade imbalance

April 13, 2012

European Union accused the Chinese trade system and called it ‘unsustainable,’ and warns to take stringent step, if Chinese authority wouldn’t intervene in time. The outburst came as China’s trade surplus ballooned to $22.45billion in May, an increase of 73percent year earlier. The surplus has risen almost tenfold in three years, much of it at the expense of Europe. European Union trade Chief Peter Mandelson asserts that China is not following the trade norms and abusing the world trading system, Mandelson warns that if china won’t follow the norms than Europe will retort in no time. European Union is worried about Union’s trade deficit with China as it has loosing market at €15 (£10) an hour. It could reach €170billion in 2007 on the current trend. Amid all these retrospective developments European Union plans to take possible measures as Peter Mandelson said This is not tolerable. The current trade balance is artificially inflated. It is a product of politics, as well as economics. China must take concrete steps to address the problem and if things do not change, than this partnership is a genuine two-way street and is fully based on reciprocity, the policy of dialogue and cooperation can be challenged Among all the Union nations Germany has done little well, as country’s export of machine tools and industrial kit increases amid a good demand in Chinese market, but other member nations has made little headway. China were accusing from long decade for adopting biased trade policies against trade partners. EU already impeached China for blocking its market for Union nations. Two years before “bra war”, forced policy makers to rethink on its decision to curb imports curbs to shield Europe’s shabby textile industry against a surge in imports. Now the other sections of industries are also facing problems with the Chinese policies to do business in China, as car manufacturers lodged complaints that country is planning to lock them out from the auto parts business. The problem is long standing as Chinese state-run credit system ignores market price signals. Industries are leading to massive over-production. EU officials believe Beijing could end the fiasco by limits galloping trade surplus at any time by curving Yuan rise to its natural level, instead of holding it down through purchases of US and European bonds. Image: china daily Via: Forbes

News Of Economy

Sarkozy-EU at loggerheads over France’s debt

April 5, 2012

The fire-brand rightwing president of France, Nicholas Sarkozy has struck a note of discord with The European Union quite early in his term. Monday saw him clash with EU finance ministers over the economic direction that France is seeking to take vis-a-vis the European bloc’s overall vision. His stance at the meeting yesterday is an indication of the fact that Sarko is looking to put domestic priorities ahead of EU’s broader agenda. Even the fact that he attended yesterday’s meting in Brussels was a bit of an aberration since heads of sate rarely attend such meets. France’s ‘zero deficit goal’ may miss EU deadline Major differences have cropped up between the bloc and one of its major members France over the highly debatable economic reforms that Nicholas Sarkozy is avowed to implement. He indicated as much yesterday. In a rare grab of initiative by a eurozone leader, Sarkozy said that he cannot make any promises that France will abide by the pledge to balance the budget by 2010. He asserted: If we don’t get to 2010, I’ll be the first to regret that. If we don’t have the expected growth, we’ll have to say 2012. It’s just a question of being honest. He told EU Commission president, Jose Manuel Barroso that it was not possible for France to enact reforms in taxes and employment and at the same time meet EU’s deadline of reducing the country’s budget deficit to 1.8 per cent by 2008. Currently it hovers around the 2.4 per cent mark. Sarkozy is attempting to cut French taxes by more than 10 billion euros in an attempt to revive the economy and boost employment. It is obvious that any move in such direction will lead to the abandonment of the pledge that the previous administration signed barely three months ago. EU’s exasperation Sarko’s moves are a signal that France is ready to rise to the forefront in EU again. Its clout in the bloc was substantially reduced after French voters rejected the EU constitution almost two years back. Yes, the European leaders are wary of Nicholas Sarkozy’s eagerness to assert him on the big stage but, at the same time, they cannot ignore that he is trying hard to put his economy on track again. Nevertheless, some officials questioned his decision to invite himself to the meet yesterday and wondered whether he was going to run the entire show alone. Were his ministers mere ‘puppets’ they asked? Also EU cannot resort to sanctions against France because French deficit still runs at 2.5 per cent. Incidentally the benchmark rate at which the EU can resort to sanctions is set at 3 per cent. Further EU’s rule book provides that if a country resorts to structural adjustments in the economy, it is allowed to have deficits. IMF? Then there’s a small matter of tussle over the appointment of IMF head. Sarkozy has made his intentions clear that he wants a former French finance minister, Dominique Strauss-Kahn, as the next head of the International Monetary Fund. Sarko announced on Sunday that he wanted Kahn to take over Rodrigo Rato’s post, which will fall vacant in October. While no one questions Kahn’s credentials for the job, some are still viewing this as an attempt by the French to reassert themselves. Already French have the top posts in three premier world bodies and consequently several countries are in queue to block French’s attempts to control IMF as well It is still quite early days to comment upon the policies that France will adopt under its new prez. However, what is clear is Sarko’s disliking for established norms. If anything, yesterday’s events confirm that he’s determined to have his say in shaping up the affairs of the European countries. Image Source

News Of Economy

Britons not happy with losing jobs to foreign workers

January 30, 2012

The Britons have been contemplating the fact that they are loosing most of their jobs to foreign workers. If you can just imagine all those dishwashers and day laborers in Britain, it will be clear to you. With various other European countries joining the European Union, it has become easier for citizens of EU nations to work in Britain. As a result, the English are loosing jobs to foreign workers. Since Labor came to power, migrants took four out of five jobs in Britain. At least that’s what the statistics say. Due to this, about 10,000 Britons have lost their jobs – mostly labor oriented. According to the British statistics Commission, the newly employed foreign labor is about 50%. AS of now, the migrants from all around the world occupied about 68% of the 2.1 million jobs throughout Britain. Although, Home Secretary Jacqui Smith argued against this opinion claiming that majority of jobs sill went to the Britons.I guess Indians take up a chunk of that foreign workers percentage in Britain. The influx of Polish workers in Britain is what’s worrying the British govt. The scale of this influx was underestimated by the authorities. After the European Union was formed, an insane number of European workers started flocking to Britain. Some govt. officials think that this is an embarrassment. The bottom line is that the Britons are not happy with the job situation. The more jobs are being created, the more foreign workers are coming to the country.