China officially tops Germany as world's No.1 exporter

Official data released from Germany on Tuesday (9 February) confirmed that China has stripped Europe's largest economy of its top exporter title. Data released by the German Federal Statistics Office showed the country's exports fell by 18.4 percent in 2009 when compared to the previous year, hitting a dollar equivalent of $1.121 trillion. China's exports for 2009 totaled $1.202 trillion.

Despite the drop, which represents the greatest year-on-year decline for Germany since 1950, the news of China's takeover was not greeted with great alarm by German economists.

"This is something that was expected. Everyone agrees that China's currency is undervalued, but still it was only a matter of time," Gernot Nerb, head of the industry department with the Ifo Institute for Economic Research, Munich, told this website.

The official figures also showed a strong export recovery in the fourth quarter of the year, helping to pull Germany out of its recession and providing a silver lining to the more gloomy annual data. With more than 60 percent of Germany's exports going to other EU countries, concerns have been raised that the bloc's forecast low rates of growth in the coming years could prose a problem for Germany's export model.

"There is some concern but we are mainly exporting investment goods, and you can not postpone investment for ever," said Mr Nerb, conceding that investment levels will probably not pick up before 2011-12 however. A breakdown of the German figures shows exports to the EU were down 19.1 percent year-on-year, with sales to faster-growing regions of Asia and South America faring little better and falling 17.1 percent. German imports also declined rapidly in 2009 as result of the financial crisis, dropping fell by 17.2 percent.

Euobserver

Greece gets three years to solve budget woes

While Greek Prime Minister George Papandreou went on national television to dramatize his country’s failing economic state because of out-of-control debt – a dilemma he said requires 10% cuts in public workers wages and higher taxes – the European Union said it would give Greece until the end of 2012 to regain control of its finances.

The drama mounted both in Athens, where public workers said they would take to the streets in protest, and in Brussels, where the European Commission said it would not take immediate punitive action although Greece’s near 13% deficit is more than four times the EU’s ceiling of 3% for countries using the euro as their currency. But the EU said it would monitor Papandreou’s near-Draconian austerity program and step in if Greece failed to meet regular benchmarks because the crisis has threatened the stability of the euro.

Under pressure from the EU to get its fiscal house in order, Papandreou said a public sector pay freeze and fuel duty increases were essential, because the economic crisis was threatening the country with disaster. “I want to be honest. We are making a national effort to stop the country from falling off the cliff,” Papandreou said in his TV address, which drew instant anger from many Greeks who blame the government, including past administrations, for lying to the EU about its financial condition, which has necessitated the wage cuts and tax hikes that would cut deep in a country where the minimum wage is only 700 euros monthly and where many Greeks are under a tsunami of debt to banks who got 28 billion euros in state aid but have refused to lend to consumers. Papandreou made a plea for understanding and cooperation. “Every citizen should be prepared to fight to protect the economy,” he said, but when the question of wage cuts was raised previously, members of the Greek Parliament, who make more than 7,000 euros a month, said they didn’t want to take pay reductions while workers would.

The move came as the European Commission set out the most detailed monitoring system it has ever imposed on a Eurozone country, effectively taking control of sweeping aspects of the Greek budget. “This is a very tough system of monitoring, but the confidence about the success of the program ... is directly linked with the political support that the Greek authorities will receive” from Greek society and the EU, Economic and Monetary Affairs Commissioner Joaquin Almunia told journalists in Brussels.

The Commission “will monitor the execution of the budget and of the reforms very closely and regularly,” he said. The Commission threw its full weight behind a detailed Greek plan aimed at bringing the government’s debt back under control and restoring its vanished credibility by slashing spending and increasing tax revenues. That effectively binds the Greek government to measures such as freezing public-sector wages, stopping new hiring in 2010 and boosting excise on tobacco and alcohol sales, since the EU’s executive will step in if they are not implemented. “Every time we observe slippages, we will ask the Greek authorities to adopt additional measures,” Almunia warned.
The euro, the EU’s flagship currency, has taken a battering in recent months following the revelation that the last Greek government - voted out of office in October - had massively understated its budget deficit when it said it was 3.5%. Immediately after the election, the new socialist government revealed that the real figure for 2009 was 12.7%, provoking outrage across the EU, with some states accusing the Greeks of fraud.

Money markets also responded with dismay. Over the last two months, the euro has lost some 8% of its value against the dollar - largely thanks to concerns over Greece and fears that other euro states, such as Portugal, could also face budget problems. Greece and Portugal “share some common problems,” such as falling competitiveness and high external financing debts, Almunia admitted.

Almunia welcomed that move, rejecting suggestions that Greece might have to be bailed out by the International Monetary Fund and saying that the EU was strong enough to tackle the problem alone. “I am fully convinced that the EU and the euro-area countries and system have instruments enough to cope with this challenge, to deal with this issue, to solve these problems, and it’s what we are doing,” he said.

Almunia also said that the next Commission - expected to take office later this month - would propose laws to give its statistical branch, Eurostat, the power to audit national accounts. EU member states rejected an earlier proposal to that effect in 2005. “If Eurostat had received audit powers during the previous years, it is possible that the present statistical problems would not have occurred,” Almunia said.

New Europe

Európa leértékelődik

Az EP jóváhagyta az új Európai Bizottságot

Az Európai Parlament mai ülésnapján (2010. február 9.) Strasbourgban 488 igen, 137 nem szavazat, és 72 tartózkodás mellett jóváhagyta a José Manuel Barroso vezette 27 tagú új Európai Bizottságot.

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Link: The new Commission

Elmarad az EU-USA csúcs

Az Egyesült Államok Külügyminisztériumának szóvivője többek között a Lisszaboni Szerződés ellentmondásosságára hivatkozott, mikor bejelentette, hogy Barack Obama elnök nem jön el a májusra tervezett EU-USA csúcsra Madridba.

Philip J. Crowley szerint a szerződés ellentmondásos abból a szempontból, hogy nem egyértelmű, hogy kivel és mikor kellene találkoznia az Egyesült Államok elnökének az unió részéről. A szóvivő szerint a jelenlegi új struktúrában a Tanács félévente rotálódó elnöksége mellett az Európai Tanácsnak is van már egy állandó elnöke, mely igaz a Bizottságra is, és számukra is kérdéses, hogy a majdani csúcstalálkozókat az EU részéről ki és hol fogja megtartani.

A hír nyomán számtalan cikk jelent meg a nemzetközi sajtóban arról, hogy ez a lépés egyértelmű jele annak, hogy Európa leértékelődött az Egyesült Államok számára. Az El Mundo című spanyol napilap kedden arról írt amerikai forrásokra hivatkozva, hogy a legutóbbi, tavaly novemberben tartott csúcstalálkozó „elvette Obama kedvét attól, hogy részt vegyen egy újabb ilyen találkozón májusban”. Az El País szerint Obama „hátat fordít Európának”. A napilap azt írta, hogy Obama a novemberi lisszaboni NATO-csúcstalálkozóval egyidejűleg szeretne sort keríteni az EU-USA-találkozóra. (Euvonal)

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Why Obama won't bother to attend the EU summit?

Months after the European Union ratifies a treaty aimed at increasing its clout in the world, President Barack Obama's decides not to travel to a summit with EU leaders in Spain because he has more important things to do. Predictably, the decision is interpreted in Europe as a snub for the Spanish government of Jose Luis Zapatero and also for the EU, still recovering from the failure of its efforts to lead by example at the Copenhagen climate talks.

Indeed, the decision reinforced a developing narrative within Europe that was one of the themes of last week's meeting in Davos. With the rise of China, and to a lesser extent economies such as India and Brazil, Europe is less of a player than it was on the world stage. Add this to Europe's current economic travails—sovereign debt problems within the euro zone, feeble economic growth and badly-wounded banking systems—and the outlook is a testing one for Euro-optimists.

Unsurprisingly, Washington did its best to protest that Europe was still at the top of its agenda. Philip Gordon, the senior State Department official responsible for European affairs, said in an interview that the decision of the president not to come is "not a slight; nor is it a cancellation."

...

He said the decision was no reflection on the U.S.'s bilateral relationship with Spain, which had improved significantly since Mr. Zapatero, directly after he was elected in 2004, withdrew all Spanish troops from Iraq and earned the enmity of President George W. Bush. "I think we have really turned the corner on a problematic relationship during the Bush administration," Mr. Gordon said.

Neither was it a commentary on the importance of the U.S. relationship to Europe. He echoed comments from his boss Hillary Clinton, who addressed head-on in a speech last week "concern that the Obama administration is so focused on foreign policy challenges elsewhere in the world that Europe has receded in our list of priorities." "European security remains an anchor of U.S. foreign and security policy," she said.

Mr. Gordon denied suggestions in Europe that the administration had been disappointed by the support given to Mr. Obama's plan to pour 30,000 more troops in Afghanistan – to which European governments have added a further 9,000. "I think we were quite pleased with the response to the president's speech on Afghanistan," he said. Despite these protestations, many Europeans think the EU and its member governments would be unwise to ignore the message from Mr. Obama's non-cancellation.

Charles Grant, director of the Centre for European Reform, a London-based think tank, said this president does not have the attachment to the old continent of many of his predecessors. "Obama is very unemotional about the E.U.," he said.

The key to getting him to attend E.U. summits is to provide practical solutions to problems. "He's not going to take the E.U. seriously unless the E.U. delivers," he said.

Mr. Grant's point is reinforced by what, according to many European press reports, was European squabbling ahead of the Madrid meeting over transcendental questions such as who was going to sit next to Mr. and Mrs. Obama at the summit dinner, who would shake Mr. Obama's hand first (Mr. Zapatero) and who would sit to his right (Herman Van Rompuy, new president of the European Council).

The Wall Street Journal