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Posts Tagged ‘crisis’

Europe faces a new crisis

January 20, 2011 Comments off

Yevgeny Kryshkin

The European Union is facing a new phase of the economic crisis. This depressing forecast was made by a report on the World Economic Situation and Prospects-2011 presented by the United Nations Conference on Trade and Development. Our commentary is by Yevgeny Kryshkin.

Despite the fact that the EU has taken tough austerity measures and is planning to cut the budget deficit, it is risking another economic recession. This opinion was expressed by the authors of the report. They emphasize that a repeated recession in the EU countries and stagnation in the U.S. and Japan may trigger another wave of a global economic crisis.

This pessimistic assessment is based on the state of affairs in the economies of Greece, Ireland, Portugal and Spain, the four countries that were most affected. Greece and Ireland managed to avert a collapse of their financial systems. However, this required incredible joint efforts by all EU member states. Ireland alone received 85 billion euro and with serious risks. Stabilization loans from the International Monetary Fund and the EU are being used to cover budget deficits and support banks. Nevertheless, neither Ireland nor Greece has solved the problems that they faced last year. Here is an opinion from an expert at the Institute of Europe, Vladislav Belov.

“The situation is developing according to the prior scenario. Greece, Spain, Portugal and Ireland have taken austerity measures to reduce the budget deficit through cutting government spending, the salaries of public servants and social expenses, and increasing taxes. At the same time, France and Germany are making attempts to consolidate their efforts. However, the problem has not been solved yet. As before, there is a danger of default, as far as the Euro-zone goes,” Vladislav Belov said.

Categories: EU Tags: , , , , ,

Gold May Gain as Europe Debt Concern, Price Drop Spur Demand

January 18, 2011 Comments off

Sungwoo Park

Jan. 18 (Bloomberg) — Gold may gain as concerns that the European sovereign-debt crisis may linger boost demand for precious metals as a protector of wealth, and as a price drop in the past two weeks spurs physical buying. Platinum gained.

Bullion for immediate delivery was little changed at $1,364.18 an ounce at 1:33 p.m. in Seoul. The metal, which rose to a record $1,341.25 in December, dropped 4 percent this month, heading for the first monthly decline since July. The February- delivery contract rose 0.2 percent to $1,363.50 an ounce in New York.

“Around this level, we still see quite good physical demand,” Bruce Ikemizu, head of commodity trading at Standard Bank Plc in Tokyo, said today by phone. “I’m rather pessimistic. The problems won’t be resolved overnight. This European financial problem will be a long-term bullish factor for gold and precious metals.”

The euro was little changed against the dollar after yesterday falling 0.7 percent amid concern that an agreement among European finance ministers will fail to contain the region’s debt crisis. Euro-area finance ministers indicated after a meeting yesterday they aren’t facing immediate pressure to tame the crisis, while pledging to strengthen the safety net for debt-strapped countries.

Morgan Stanley raised its gold forecast through 2015, the bank said in a report today. It expects gold to average $1,400 an ounce this year, 6 percent more than a previous forecast.

Assets in 10 gold exchange-traded products dropped 6.54 metric tons to about 2,078 tons as of Jan. 14, the lowest since Sept. 15, according to data compiled by Bloomberg.

Platinum for immediate delivery gained 0.5 percent to $1,813.70 an ounce. Spot palladium declined for a fourth day, dropping 0.4 percent to $791.50 an ounce, while silver was little changed at $28.2975 an ounce.

Categories: GOLD Tags: , , , ,