Saturday, 31 December 2011
Friday, 30 December 2011
THE DAILY TELEGRAPH: House prices in Britain dipped in December, mortgage lender Nationwide said on Friday, adding that the property market looks likely to remain sluggish next year as a weak economy and rising unemployment keep a lid on consumer spending.
House prices fell 0.2pc from November on a seasonally adjusted basis, although they rose 1pc from the same month last year. In a Reuters poll, analysts had forecast a monthly increase of 0.1pc and a 1.5pc annual rise.
"With the UK economy struggling to gain momentum, labour market conditions are likely to remain challenging in 2012, deterring buyers from entering the housing market," said Nationwide chief economist Robert Gardner.
"The housing market in 2012 looks likely to be characterised by low levels of activity once again, with prices moving sideways or modestly lower over the course of the year," he said. » | Reuters | Friday, December 30, 2011
Thursday, 29 December 2011
For French residents fond of sugary drinks like Coca Cola, life is about to get more expensive. The country's top constitutional body, the Constitutional Council, approved a new soda tax on Wednesday. The tax, which works out at about 1 euro cent per container, is part of austerity measures passed in France to combat the debt crisis, and is expected to generate around €120 million ($156 million) in revenue for the government.
In its decision approving the legislation, the Constitutional Council said that while it didn't believe the government was imposing the tax only to promote health and combat obesity, it also didn't see any unfair disadvantages for a specific product group in the legislation.
The "cola tax," as people are calling it in France, will now go into effect on Jan. 1. French media are reporting that most companies will raise the tax money by increasing their price per drink. Industry sources have told newspapers that soft drink prices could increase by as much as 35 percent. » | dsl -- with wires | Thursday, December 29, 2011
Wednesday, 28 December 2011
Saturday, 24 December 2011
Et in terra pax hominibus bonae voluntatis,
Laudamus te, benedicimus te,
Glorificamus te. Gratias agimus tibi,
propter magnam gloriam tuam.
Wednesday, 21 December 2011
REUTERS DEUTSCHLAND: London - Die Top-Bonität Großbritanniens ist nach Einschätzung der Ratingagentur Moody's auch von der Krise in der Eurozone bedroht.
Die Bemühungen der Regierung um einen ausgeglichenen Haushalt könnten durch weitere Schocks für die Wirtschaft untergraben werden, erklärte Moody's am Dienstag.
Bislang genießt Großbritannien das Top-Rating Aaa, und der Ausblick wird von Moody's mit stabil bewertet. Die Fähigkeit des Landes, zusätzliche Belastungen für den Haushalt zu kompensieren, habe sich aber verschlechtert. Der Handlungsspielraum für Großbritannien sei geringer geworden, sagte Moody's-Analystin Sarah Carlson der Nachrichtenagentur Reuters. » | Reuters | Mittwoch 21. Dezember 2011
Tuesday, 20 December 2011
THE DAILY TELEGRAPH: The switch by Americans from buying to renting homes since the financial crisis has been underlined by a surge in the construction of flats.
The development of multi-family units - a category made up of flats and townhouses - jumped 25.3pc last month to an annual rate of 238,000, the Commerce Department said on Tuesday. That helped drive overall construction on new homes up 9.3pc to an annual pace of 685,000, the strongest since the spring of 2010.
The better-than-expected figures were enough to cheer investors who have become accustomed to a flow of depressing news from the housing market since the bubble first burst in 2006. They also showed the degree to which the downturn is unwinding American homeownership, an objective of successive US governments since World War Two.
Ownership dropped to 66.9pc last year from a high of 70pc in 2005, and some are forecasting it will drop as low as 62pc as the hurdles to owning a home increase.
"We expect the shift from owning to renting to persist for the next few years," said Michelle Meyer, an economist at Bank of America. She points to the prospect of further repossessions next year and the tougher criteria banks are now imposing on potential borrowers. Read on and comment » | Richard Blackden, US business editor | Tuesday, December 20, 2011
THE DAILY TELEGRAPH: Australia's coldest summer in decades has dampened the mood for Christmas shopping and led to plummeting profits for swimwear and clothing stores.
Several clothing and department store chains have cut prices or closed outlets and shares in surfwear company Billabong today fell to a record low. The company said its profit could fall by as much as 26 per cent.
The unseasonal damp cool conditions – including the coldest start in Sydney since 1960 – has been blamed for a slump in Christmas shopping and big falls in sales of clothing and shoes.
"Clothing retailers are still doing it fairly tough out there," said Russell Zimmerman, from The Australian Retailers Association. "The weather has been too cold for them – they need that really good run of hot weather and they haven't seen it."
The rain and cold, blamed on the La Nina [sic] [La Niña] weather cycle, has affected much of Australia's eastern seaboard. Two weeks ago, the city of Brisbane recorded its coldest December day for 123 years.
The poor weather has forced stores to heavily discount of swimwear and summer clothing, with the big department store chain David Jones dropping prices by 30 per cent. » | Jonathan Pearlman, Sydney | Monday, December 19, 2011
Monday, 19 December 2011
THE GUARDIAN: Swedish carmaker's owner admits defeat after former parent General Motors blocked a rescue deal involving a Chinese firm
Sweden's Saab faced an end to more than 60 years of carmaking on Monday after its Dutch owner abandoned repeated attempts to find financing and filed for its bankruptcy.
The end to months of efforts to keep the famed carmaker afloat came when General Motors at the weekend again vetoed a plan involving Chinese investor Zhejiang Youngman Lotus Automobile. GM, Saab's former owner, still licences key technology to Saab and has a small shareholding. » | Reuters | Monday, December 19, 2011
THE GUARDIAN: Saudi billionaire Prince Alwaleed bin Talal has taken a $300m stake in Twitter
Saudi billionaire Prince Alwaleed bin Talal, the second-largest investor in Rupert Murdoch's News Corporation, has taken a $300m (£193m) stake in Twitter.
Alwaleed, who has a net worth estimated to be just below $20bn, has taken the stake in conjunction with his Kingdom Holding Company investment firm.
Applying an $8bn valuation figure for Twitter used by some analysts, the investment amounts to a 3.75% stake.
In a statement, Kingdom Holding said that the investment was "the result of several months of negotiations and comprehensive due diligence". » | Mark Sweney | Monday, December 19, 2011
Sunday, 18 December 2011
Griechenland ist mit einer steigenden Armut konfrontiert. In der Hauptstadt Athen sei die Zahl der Obdachlosen im Jahr 2011 um 20 Prozent gestiegen, zitiert die Tageszeitung «Ethnos» in ihrer Samstagsausgabe Bürgermeister Giorgos Kaminis. Auch in den Suppenküchen der Stadt habe die Nachfrage um 15 Prozent zugenommen. Angesichts der Lage forderte Kaminis mehr finanzielle Hilfen des Staates. » | sda | Samstag 17. Dezember 2011
The pay increases of up to 64 per cent – described by newspapers as a "Canberra goldrush" – were awarded to compensate MPs for extra workloads due to social network sites such as Facebook and Twitter.
Ms Gillard's salary will increase 31 per cent to about £320,000, while the Opposition leader, Tony Abbott, will get £228,000. Some shadow ministers will receive rises of up to 64 per cent, with salaries of £154,000, while ordinary back-benchers will receive about £120,000.
In contrast, Mr Cameron receives £142,500 a year and Mr Obama receives the equivalent of £255,000. The decision of the MPs to accept the rises prompted public outrage, with national unemployment rising despite the mining boom. The increases are more than 10 times the annual 3 per cent indexation handed to most earners. » | Jonathan Pearlman, in Sydney | Thursday, December 15, 2011
Saturday, 17 December 2011
BBC: Consevative former chancellor Lord Norman Lamont has told the BBC that the eurozone countries are "in a state of denial", and need to act more quickly to resolve the debt crisis.
Mr Lamont was giving his view of how the eurozone should respond to claims from the credit ratings agency Fitch that it is considering a downgrade of six countries, including Italy and Spain.
Fitch says it has concluded that a solution in the eurozone is "beyond reach". Watch BBC video » | Saturday, December 17, 2011
In der vergangenen Woche hatte bereits Standard & Poor's damit gedroht, die Ratings fast aller Euro-Mitglieder zu senken. Nun preschte Moody's vor und senkte die Note für Belgien um zwei Stufen auf "Aa3". Zudem setzte die Agentur den Ausblick auf "negativ". Damit könnte eine weitere Herabstufung Belgiens binnen zwei Jahren folgen. Die belgische Regierung lehnte eine Stellungnahme zu dem Downgrade ab. » | AG/red | Samstag 17. Dezember 2011
It will also reduce the number of pages in the Guardian’s flagship supplement G2, under wide-ranging changes to be introduced in January.
The media group, which also publishes the Observer newspaper, is briefing staff about the changes today and early next week.
“As part of our digital first strategy, we have been looking in detail at how we produce our newspapers and website, and over the next few days we will be telling staff about our plans for a new, simplified production process,” a spokesman said.
“This will be introduced in January, along with some changes to the printed Monday to Friday Guardian. The changes to the paper take account of changing patterns of readership and advertising and are based on research with our readers.” » | Katherine Rushton, Media, telecoms and technology editor | Friday, December 16, 2011
Friday, 16 December 2011
Soup kitchens. Dole queues. Jarrow marches. Bank failures. Trade wars. Falling prices. Desperate poverty. Dust bowls. Fascism. The long descent into war.
That was the 1930s, and it was the world conjured up by Christine Lagarde, the managing director of the International Monetary Fund on Thursday night.
A failure of the international community to co-operate to sort out Europe's sovereign debt crisis risked, she said, "retraction, rising protectionism and isolation. This is exactly the description of what happened in the 1930s and what followed is not something we are looking forward to."
Clearly not. But is Lagarde right? Are we really heading inexorably into a second Great Depression? Or is the head of the IMF, unwisely perhaps, making us all feel more depressed than we need to be?
There are certainly reasons to be concerned about the state of the world.
To the extent that a depression can be defined as a prolonged period of sub-trend growth, then what we have experienced since 2008 has been a depression.
Many countries – including Britain – have struggled to recover from the collapse of asset-price bubbles – and now face the prospect of double-dip recessions. Read on and comment » | Larry Elliott, economics editor | Friday, December 16, 2011
An unprecedented exodus of capital from Greece – peaking in a record number of withdrawals from banks in recent months – has exacerbated the liquidity crisis now wracking the recession-hit country.
The latest figures released by the Bank of Greece reveal that in September and October alone investors pulled €12.3bn (£10.3bn) from domestic banks, spurred by fears of political uncertainty and economic collapse.
Overall, outflows have reached a record 25% since September 2009 – when household and corporate deposits stood at a peak of €237.5bn, the data showed.
Theodore Pelagidis, an economics professor at the University of Piraeus, said: "This is part of the death spiral of the recession as a result of austerity measures. People realise that contagion has come to banks and they are very afraid of losing their deposits. On average around €4bn-€5bn in capital flees the banking system every month."
The extraordinary figures back up anecdotal evidence that it is not just the super-rich behind the flight of funds.
Over the past year, as the eurozone debt crisis has intensified in the nation where it largely began, there have been countless cases of ordinary depositors hauling suitcases stuffed with cash to the safer destinations of Cyprus, London and Switzerland. » | Helena Smith in Athens | Friday, December 16, 2011
Fitch Ratings brandit à son tour la menace d'une dégradation de la note de la France. Après Standard & Poor's, qui a placé sous surveillance négative la notation de 15 États de la zone euro au début du mois, l'agence de notation annonce ce vendredi qu'elle a abaissé à «négative» contre «stable» auparavant la note de la dette à long terme de la France, tout en maintenant la note de «AAA», la meilleure possible. «La perspective négative indique qu'il y a un peu plus de 50% de chance d'un abaissement de la note d'ici à deux ans», précise l'agence de notation.
«En comparaison à d'autres membres de la zone euro notés AAA, la France est selon le jugement de Fitch la plus exposée à une intensification de la crise», estime l'agence, en raison de «son déficit budgtéraire structurel plus important et un poids de la dette plus grand par rapport» aux autres pays bénéficiant du triple A. «L'intensification de la crise de la zone euro depuis juillet constitue un choc négatif et significatif pour la région et pour l'économie de la France et la stabilité de son secteur financier», souligne Fitch. «En dépit des mesures fiscales additionnelles annoncées en août et novembre», «de nouvelles mesures devraient être nécessaires pour ramener le déficit en-dessous de 3% du PIB en 2013 et stabiliser la dette du gouvernement en dessous de 90% du PIB, étant donné la dégradation du contexte économique et financier», est-il souligné. » | Par Hayat Gazzane | vendredi 14 décembre 2011
Thursday, 15 December 2011
The world risks sliding into a 1930s-style slump unless countries settle their differences and work together to tackle Europe's deepening debt crisis, the head of the International Monetary Fund has warned.
On a day that saw an escalation in the tit-for-tat trade battle betweenChina and the United States and a deepening of the diplomatic rift between Britain and France, Christine Lagarde issued her strongest warning yet about the health of the global economy and said if the international community failed to co-operate the risk was of "retraction, rising protectionism, isolation".
She added: "This is exactly the description of what happened in the '30s and what followed is not something we are looking forward to."
The IMF managing director's call came amid growing concern that 2012 will see Europe slide into a double-dip recession, with knock-on effects for the rest of the global economy. "The world economic outlook at the moment is not particularly rosy. It is quite gloomy," she said. » | Larry Elliott, Heather Stewart and Nicholas Watt | Thursday, December 15, 2011
To call what happened in the 1930s a “slump” is a bit of a stretch and a misnomer, to say the least. The 1930s was characterized by a 'full-on' depression. The terms “slump” and “double-dip” are far too mild to describe the dire economic situation experienced during that period in history. The IMF and these politicians need to get their facts straight. – © Mark
A downgrade of France's AAA rating would not be justified and the ratings agencies are making decisions based more on politics than economics, said Christian Noyer, who is a European Central Bank policymaker as well as head of the Banque de France.
Standard and Poor's is due to decide whether or not to downgrade eurozone countries in the coming days following an EU agreement on Friday to forge tougher fiscal rules.
"The downgrade does not appear to me to be justified when considering economic fundamentals," Mr Noyer said in an interview with local newspaper Le Telegramme [sic] de Brest.
"Otherwise, they should start by downgrading Britain which has more deficits, as much debt, more inflation, less growth than us and where credit is slumping," he went on. » | Agencies | Thursday, December 15, 2011
Reporting from Washington — In a new effort to persuadeIran to halt its nuclear program, the Obama administration and its European allies are asking Saudi Arabia to help them squeeze Iran's vital oil sector without driving up world energy prices and damaging the global economy.
Officials in the United States, France, Britain and other countries have been lobbying the Saudis in recent weeks to produce billions more barrels of oil to provide an alternative source for buyers of Iranian oil.
The goal is to keep global prices stable while cutting Iran's ability to sell oil on world markets. The move would come as Western governments add more sanctions to dissuade international customers from buying from Iran, now the world's fourth-largest oil exporter.
A Western official said the Saudis have become "the great hope" for enabling the West to avoid an oil price increase while pressuring Iran to abandon its nuclear development program. U.S. officials say Tehran is fast approaching the ability to build a nuclear weapon. Iran says it is enriching uranium to generate electricity in power plants. » | Paul Richter, Los Angeles | Tuesday, December 13, 2011
WA TODAY: Gold fell below $US1,600 an ounce for the first time since October as a stronger dollar curbed demand for the metal as an alternative asset. Silver, platinum and palladium also slumped.
The dollar rose to an 11-month high against the euro on signs of increased funding stress as Europe battles to tame its debt crisis. Gold is poised to close below its 200-day moving average today, signaling prices may drop to $US1,400, according to Stifel Nicolaus & Co. The value of a 100-ounce futures contract traded in New York dropped by more than the $US8,500 maintenance- margin requirement today, potentially prompting margin calls. » | Bloomberg | Thursday, December 15, 2011
Wednesday, 14 December 2011
Pity Wall Street's bankers. Once the highest-paid bosses in the land, they are now also-rans. The real money is in healthcare and drugs,according to the latest survey of executive pay.
There are no bankers in the top 10 of this year's GMI survey of CEO pay. In fact, they have been out since 2007, when Goldman Sachs boss Lloyd Blankfein competed for the top slot with Richard Fuld, boss of soon-to-be-bust Lehman Brothers, and Angelo Morzillo, head of Countrywide, once the largest sub-prime home loan firm.
With the bankers still recovering from their tussle with hubris, old age and infirmity were 2010's boom businesses – at least in terms of pay. Leading the pack was John Hammergren, chief executive of McKesson Corporation. The firm's 52-year-old chairman, chief executive and president took home $145,266,971 in 2010. » | Dominic Rushe | Wednesday, December 14, 2011
Stock markets slumped and the euro hit a fresh 11-month low against the dollar amid renewed fears that Europe will be forced to rescue Italy and Spain from a lending boycott by international investors.
The FTSE index of Britain's top 100 companies dropped 2.25% to lead falls on continental exchanges and the US markets in a day of volatile trading. France's CAC 40 was the worst performer among major European indexes, falling 3.3%, followed by Italy's FTSE MIB, which dropped 2.8%.
Investors singled out Italy for more pain as they sent the interest rate on the all-important 10-year bond past 7% to hit 7.17%. The euro fell to €1.30 against the dollar, the lowest since January. » | Phillip Inman, economics correspondent, and Ian Traynor in Brussels | Wednesday, December 14, 2011
THE GUARDIAN: Why the euro is taking a pounding: The Brussels summit did not produce a plan to save monetary union, the eurozone is heading for a double-dip recession and safe-haven plays are benefiting the US dollar and sterling » | Larry Elliot, economics editor | Tuesday, December 13, 2011
THE GUARDIAN: Exclusive survey shows America's CEOs enjoyed pay hikes of up to 40% last year – with one chief executive earning $145m
Chief executive pay has roared back after two years of stagnation and decline. America's top bosses enjoyed pay hikes of between 27 and 40% last year, according to the largest survey of US CEO pay. The dramatic bounceback comes as the latest government figures show wages for the majority of Americans are failing to keep up with inflation.
America's highest paid executive took home more than $145.2m, and as stock prices recovered across the board, the median value of bosses' profits on stock options rose 70% in 2010, from $950,400 to $1.3m. The news comes against the backdrop of an Occupy Wall Street movement that has focused Washington's attention on the pay packages of America's highest paid.
The Guardian's exclusive first look at the CEO pay survey from corporate governance group GMI Ratings will further fuel debate about America's widening income gap. The survey, the most extensive in the US, covered 2,647 companies, and offers a comprehensive assessment of all the data now available relating to 2010 pay. » | Dominic Rushe in New York | Wednesday, December 04, 2011
THE GUARDIAN: America's top 10 highest-earning CEOs and their salaries – in pictures »
THE DAILY TELEGRAPH: Angela Merkel tells Germany's parliament that Britain is still an important partner in the European Union despite 'regretting' its refusal to back fiscal integration plans.
The German chancellor told the Bundestag that Britain will remain a crucial partner within the European Union despite its veto last week of a treaty on budget discipline, [.]
Chancellor Merkel appeared to be trying to build bridges following Prime Minister David Cameron's refusal to agree to changes to the EU's Lisbon Treaty on tougher budget rules after he failed to win safeguards for the City of London.
"As much as I regret that Britain did not join us on this path, and as much as I regret that 20 years ago Britain decided against the euro, I have no doubt that in the future Britain will also be an important partner in the European Union," Merkel told the lower house of parliament.
Countering the views of pro-Europeans who argue that Mr Cameron has risked isolating Britain from the EU decision[-]making process, the German chancellor said that Britain still had a role to play in several significant areas. » | Wednesday, December 14, 2011
Sunday, 11 December 2011
SPIEGEL ONLINE INTERNATIONAL: Was the outcome of the Brussels summit a bad one for the EU? Not at all. The British were never completely dedicated to European unity and the ongoing project of greater fiscal integration is better off without them.
It was to be expected. And now it's official: The British have elected not to join the treaty governing Europe's new financial system. Prime Minister David Cameron refused.
Does that mean, then, that German Chancellor Angela Merkel and French President Nicolas Sarkozy have failed? Not at all. Only incompetent amateurs could have believed that London would join the attempt to overcome the European debt crisis together. European leaders in Brussels hammered out an agreement that marks the end of unlimited fiscal sovereignty -- and that conflicts fundamentally with the British understanding of Europe.
The result of Thursday night -- the 17 euro-zone countries joined by nine otherspending parliamentary approval in three of the non-euro-zone capitals -- is a success. A success for the majority of Europeans and for efforts to find a solution to the euro crisis. Any deal with the obstreperous British would have been a weak compromise, and one that would have allowed questionable economic practices to continue.
But from the very beginning, Great Britain's participation in a united Europe was amisunderstanding. When the EU was founded, the British still hadn't finished mourning over their lost empire. Europe seemed far away and Continental efforts at unification were seen by many among the British elite as little more than naïve idealism.
Despite such doubts, the EU became a reality, and a success -- and it was economic realities that ultimately led London to join. Companies in the UK pushed the government toward Brussels because staying away was far too risky economically. » | A Commentary by Wolfgang Kaden | Saturday, December 10, 2011
Saturday, 10 December 2011
THE GUARDIAN: The EU will never be the same again. Britain has become more Swiss, but most of Europe's gone German
It was the day that Europe united. It was the day that Europe split. To save the euro, up to 26 members of the European Union are to join a fiscal compact, submitting the core tax and spend competencies of the state to mutual supervision. If this actually happens, it will mean that the crisis of monetary union has driven them towards a political union they would not otherwise have embraced. Equally fateful is Britain's decision to stand aside. One or two other countries may sooner or later join the Brits, but even this would mean a split between a core union, embracing the large majority, and a small, scattered periphery.
Whatever follows, the European Union will never be the same again. Even if this ultimately proves to be a turning point at which history fails to turn, historians will mark the 9th of December 2011. » | Timothy Garton Ash | Friday, December 09, 2011
THE GUARDIAN – EDITORIAL: Instead of putting Britain first, the prime minister prioritised the Conservative party
To stand alone against the world can sometimes be an act of heroic defiance. At other times, however, it can merely be proof of tragic foolishness. David Cameron spent much of yesterday basking in the approval of the previously hostile rightwing press and his party's Eurosceptics after he vetoed an EU-wide treaty to rescue the single currency. But the prime minister's action in Brussels marks a moment of profound and long-gestating British failure. Mr Cameron has left an empty chair that could define Britain's place in the world for years to come.
None of this is to pretend that Mr Cameron missed the chance to get aboard a voyage to the stars this week. For Europe as a whole, the latest Brussels summit marked a moment when the partners finally recognised one of the things they failed to see at Maastricht 20 years ago, that monetary union requires constraints of fiscal co-ordination that some nations might not welcome. That recognition is still too little and too late, and has been reached in the most adverse of circumstances. It comes at a moment of extreme inequality between the eurozone members of the north and the south, while the actions now foisted on the eurozone 17 by Germany and France are insufficient and too cautious to stop the bond markets – as initial market reaction yesterday seemed to indicate. There is no guarantee that the plans which Mr Cameron vetoed for the Europe of 27 will work for the Europe of 17 either. Read on and comment » | Editorial | Friday, December 09, 2011
Friday, 9 December 2011
THE GUARDIAN: French accused of setting Britain up as 'fall guy' in attempt to ringfence eurozone
David Cameron was at the centre of a furious row with Nicolas Sarkozy on Thursday after Paris tried to isolate the prime minister at the EU summit by suggesting that Britain is seeking to exempt the City of London from all European regulations.
In a move dismissed by officials in Brussels as an attempt to set Britain up as the "fall guy", senior French figures said Cameron wanted an "opt out" from EU financial services regulation.
The French were said to have found themselves isolated in their attempts to limit an agreement on tough fiscal rules for the single currency just to the eurozone's 17 members.
Britain said Sarkozy was distorting the British position, which is to ensure that changes to the eurozone do not harm the City of London.
Cameron confronted Sarkozy in a joint meeting with Angela Merkel, the German chancellor, shortly before the EU's 27 leaders met for dinner to try to hammer out an agreement to underpin new fiscal integration in the eurozone.
"The prime minister was very determined and very strong in the meeting," one British source claimed. "This is going to be a very difficult discussion."
The joint meeting with Sarkozy and Merkel set the scene for a tense night of negotiations as EU leaders embarked on a mammoth effort to prevent the collapse of the single currency at what was seen as the most important Brussels summit in years. » | Nicholas Watt, Ian Traynor and David Gow in Brussels | Thursday, December 08, 2011
Tuesday, 6 December 2011
THE DAILY TELEGRAPH: A leading shareholder group has written to all UK banks demanding that they cut individual pay-outs and overhaul their remuneration structures.
In the latest attempted crackdown on excessive pay, the Association of British Insurers (ABI) has told banks to award smaller bonuses to investment bankers without resorting to increasing base pay to make up for it.
The ABI said that now is the time to curb total pay because bankers are unlikely to quit for a competitor, with very few banks hiring and most cutting jobs.
The letter is the latest development in the intensifying row over "out-of-control" executive pay and comes as the Bank of England is considering changes to the way bankers' bonuses are measured, making it far harder to justify multi-million pound awards.
The letter from the ABI, sent to UK listed banks on Monday, said: "Our members are concerned about the level of returns that shareholders receive compared to the returns given to employees. Members believe that in recent years this balance has been inequitable, with too much value being delivered to employees in contrast to the dividends paid to shareholders.
"The reduction in employee pay-out ratios needs to be achieved by reducing individual remuneration pay-outs to highly paid employees, including executive directors, and not by just reducing employee numbers." Read on and comment » | Louisa Peacock, Jobs editor | Monday, December 05, 2011
Monday, 5 December 2011
Income inequality among working-age people has risen faster in Britain than in any other rich nation since the mid-1970s owing to the rise of a financial services elite who through education and marriage have concentrated wealth into the hands of a tiny minority, according to a new report by the OECD.
Economists from the thinktank, which is funded by developed world taxpayers, say the annual average income in the UK of the top 10% in 2008 was just under £55,000, about 12 times higher than that of the bottom 10%, who had an average income of £4,700.
This is up from a ratio of eight to one in 1985 and significantly higher than the average income gap in developed nations of nine to one.
However, the report makes clear that even in countries viewed as "fairer" – such as Germany, Denmark and Sweden – this pay gap between rich and poor is expanding: from five to one in the 1980s to six to one today. In the rising powers of Brazil, Russia, India and China the ratio is an alarming 50 to one.
The OECD warned about the rise of the top 1% in rich societies and the falling share of income going to poorer people.
This trend is especially pronounced in Britain, where the dramatic rise in inequality has been fuelled by the creation of a super-rich class. The share of the top 1% of income earners increased from 7.1% in 1970 to 14.3% in 2005.
Just prior to the global recession, the OECD says the very top of British society – the 0.1% of highest earners – accounted for a remarkable 5% of total pre-tax income, a level of wealth hoarding not seen since the second world war [sic]. » | Randeep Ramesh, social affairs editor | Monday, December 05, 2011
THE GUARDIAN: Elsa Fornero weeps as she tries to explain sacrifices required of Italians after cabinet passes budget with net cuts of €24bn
Italy's "technocratic" government unveiled a package of painful austerity measures on Sunday night – so painful, indeed, that one of the ministers began to weep as she explained them to the press.
Announcing that all but the lowest pensions would be frozen next year, the welfare minister, Elsa Fornero, said: "We – and this really cost us dear, psychologically even – we've had to ask for sac…" But she was unable to say the word "sacrifices" and, brushing tears from her eyes, brought her presentation to an abrupt close.
The emergency budget, containing tax rises and spending cuts totalling a net €24bn (£21bn), is the latest of several passed this year aimed at restoring the credibility of the eurozone's biggest debtor nation. The government, headed by a former European commissioner, Mario Monti, is hoping to rush the measures through parliament before the next EU summit begins on Thursday. » | John Hooper in Rome | Sunday, December 04, 2011
Sunday, 4 December 2011
THE SUNDAY TELEGRAPH: Nick Clegg said the government may legislate to curb "unjustified and irresponsible" pay in the private sector.
The government will publish new proposals to "get tough" on excessive pay in January, the deputy prime minister said.
Among likely steps is widening the membership of remuneration committees, which set pay, to include workers.
Recent figures showed executive pay at Britain's biggest firms rose 50 per cent in the last year, taking the average pay for a FTSE 100 director to just short of £2.7m.
These are a "real slap in the face" for workers, many of whom are enduring a pay freeze, Mr Clegg told the BBC. He said there must be greater transparency in pay awards.
But he said the government would not set pay rates and he backed top executives being well-rewarded if their companies were successful.
"Just as we have been quite tough on unsustainable and unaffordable things in the public sector, we now need to get tough on irresponsible behaviour of top remuneration of executives in the private sector," he said. Read on and comment » | Matthew Holehouse | Sunday, December 04, 2011
Saturday, 3 December 2011
REUTERS DEUTSCHLAND: Warschau - Polen wird nach Einschätzung von Ministerpräsident Donald Tusk die wirtschaftlichen Kriterien für einen Euro-Beitritt Ende 2015 erfüllen. » | Samstag, 3. Dezember 2011
THE INDEPENDENT: George Osborne's economic strategy rests on continued high levels of immigration to Britain – in contrast to the Conservatives' policy of cutting net migration down to the "tens of thousands".
The Government will find itself in the position of either having to allow continued immigration in the hundreds of thousands or jeopardising the country's economic recovery, according to its own fiscal watchdog, the Office for Budget Responsibility.
Ministers will not reduce average annual immigration down to the "tens of thousands" over the course of this parliament according to the OBR's projections. Instead, net inward migration to Britain will remain at an average of 140,000 a year until 2016, it says, despite repeated promises from Conservative ministers that they will reduce immigration flows to substantially below these levels. » | Ben Chu | Saturday, December 03, 2011
To use that British understatement that Continentals enjoy, one might suggest that it has not been a good year for the euro. And now, some say, only about a week remains to put things right. So who better to question than the man who invented it? In Paris on Wednesday, I called on Jacques Delors.
Mr Delors, who was President of the European Commission from 1985 to 1995, is the only foreign bureaucrat ever to have become a household name in Britain. In 1988, he enraged Margaret Thatcher by coming to address the British TUC on the joys of the European “social dimension”. Her famous Bruges speech later that month was her attempt to stand against the tide of European integration that he represented.
It was Mr Delors whose report produced the plan for what we now call the euro. He was such a demon figure for British eurosceptics that The Sun produced the headline “UP YOURS, DELORS” and invited its readers to turn, face the English Channel and make a rude gesture at him in unison.
I climb several twists of typical steep Parisian stairs to a modest office. The small, bespectacled figure who greets me is old in years — he was born in July 1925, three months before Mrs Thatcher — but with undiminished physical and mental vigour. We talk for two hours, and one feels he would happily continue for another two.
Mr Delors is known for his austerity, but the man I converse with is not stiff or pompous. He remembers his old adversary with a slightly amused respect, noting her immense capacity for work and her vision in looking for change in the Soviet Union before others did.
He reflects on their difference of background and character: “I think for Mme Thatcher I was a curious personage: a Frenchman, a Catholic, an intellectual, a socialist.” Continue reading and comment » | Charles Moore | Friday, December 02, 2011
Friday, 2 December 2011
The German Chancellor made it clear that eurozone states would be called upon to relinquish economic sovereignty and be subjected to close central supervision – a pre-requisite for the eurozone to secure vital extra financial help.
"We are going to Brussels with the goal of achieving treaty change," she said. European leaders have promised four "comprehensive" but unsuccessful rescue packages in 19 months, but traders ignored continued signs of stress in bond markets and banks and bet Mrs Merkel would finally deliver. » | Louise Armitstead, Chief business correspondent | Friday, December 02, 2011
In an interview with The Daily Telegraph, Jacques Delors, the former president of the European Commission, claims that errors made when the euro was created had effectively doomed the single currency to the current debt crisis. He also accuses today’s leaders of doing “too little, too late,” to support the single currency.
The 86-year-old Frenchman’s intervention comes the day after France and Germany took another step towards the creation of a full “fiscal union” within the European Union and David Cameron insisted that Britain must remain a major player in Europe. Mr Delors, who led the commission from 1985 to 1995, played a central role in the process that led to the creation of the euro in 1999. In his first British newspaper interview for almost a decade, he says that the debt crisis reflects a threat to Europe’s global role and even basic Western democratic values.
Mr Delors claims that the current crisis stems from “a fault in execution” by the political leaders who oversaw the euro in its early days. Leaders chose to turn a blind eye to the fundamental weaknesses and imbalances of member states’ economies, he says. “The finance ministers did not want to see anything disagreeable which they would be forced to deal with,” he says.
The euro came into existence without strong central powers to stop members running up unsustainable debts, an omission that led to the current crisis. Now that the excessive borrowing of countries such as Greece and Italy has brought the eurozone to the brink of disaster, Mr Delors insists that all European countries must share the blame for the crisis. “Everyone must examine their consciences,” he says. » | James Kirkup, Deputy Political Editor | Friday, December 02, 2011
Thursday, 1 December 2011
The US Central bank – the Federal Reserve – promised the cash-strained European Central bank a practically unlimited amount of American taxpayer money for cheap, effectively bailing out the Euro.
Markets are rallying, traders are full of optimism and the Euro is up. The only loser is the dollar: the good old buck has weakened compared to other currencies. The reason? An announcement from the Fed, the European Central Bank, the Bank of Canada, the Bank of Japan, the Bank of England and Swiss National Bank reveals that they are going to provide troubled European banks with massive amounts of cash – cheaper and faster than ever before. Obviously, the lion’s share of assets will be provided by the US Federal Reserve. » | Thursday, December 01, 2011