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ECONOMY

Spiegel Online - Germany | 31/07/2014

Argentina to blame for state bankruptcy

For the second time in thirteen years, Argentina is on the verge of state bankruptcy. The final deadline for negotiating a solution with creditors expired on Wednesday night, and the rating agency Stand & Poor's has declared the country insolvent. However it's not the two US hedge funds with their demands for payment that are to blame, but country's political elite, the weekly news magazine Der Spiegel argues: "Argentina could easily come up with the money. Even fears that a compromise with the hedge funds could result in additional claims from other creditors could be avoided - for example by first depositing the money with a trustee... The real problem is the legend so cherished in Buenos Aires that Argentina is being punished for its resistance to an international financial mafia. A tale that at the same time ensures the political survival of [Argentinian President] Kirchner & Co. ... But there is one upside to the whole thing: Argentina has now become so unimportant for the global economy that the bankruptcy is unlikely to trigger an earthquake on the global financial markets." (31/07/2014)

Trends Tendances - Belgium | 30/07/2014

Budget airliines profit from inconsistence

The budget airlines Ryanair and Easyjet have presented their quarterly figures and both show a marked rise in sales over the past months. This success is due to the inconsistent behaviour of consumers, the business magazine Trends Tendances believes: "In today's world, low-cost providers are the most successful. You can see it in the retail business, for example the retail chains Aldi and Lidl. And it's the same with the airline sector. ... Ryanair is one of those companies that people love to criticise but that despite everything they keep coming back to. Because in fact people are often anti-globalists in private but very liberal as consumers. That's the schizophrenia of our time." (30/07/2014)

Blog Vesselin Jelev - Bulgaria | 29/07/2014

Corpbank shareholders should pay for bailout

Bulgaria wants to take out billions in loans to bail out the ailing Corporate Commercial Bank. The parliament in Sofia approved a raise in the national budget for this purpose on its first reading on Tuesday. Why aren't the shareholders and investors being made to foot the bill first, journalist Veselin Jelev asks in his blog: "It may be that in this situation this is the right decision - I don't know. But one thing I do know: this decision is the opposite of what Europe decided with its banking union. According to that agreement the shareholders and creditors are liable first, then the savers and only in the end the taxpayers. Bulgaria is not part of the banking union but I still want to know why we are jumping the first three links in the chain of liability. Why are [the opposition party] Gerb, [the Turkish junior coalition partner] DPS and the president accepting that the taxpayer pays the bill?" (29/07/2014)

Eleftherotypia - Greece | 29/07/2014

Don't sell off Greece's beaches

After months of popular resistance the Greek government has withdrawn for revision a draft law on the privatisation of beaches that would have made it significantly easier to put up buildings along the coastline. Author Eleni Svoronou shares her qualms about the initiative in the left-liberal daily Eleftherotypia: "It's the combination of clean beaches, traditional villages, archaeological sites, forests and a large biodiversity that makes our landscape what it is and sets Greece apart from Turkey, Italy, Spain and other Mediterranean countries. ... If holiday destinations are all made to look the same and you can no longer tell whether you're on a coast in Greece or Spain, visitors simply won't have the same quality of experience. ... Perhaps we'll attract all-inclusive tourists who just stick to their hotels. ... The tourism revenues may go up. But what will happen in the long term?" (29/07/2014)

Jornal de Negócios - Portugal | 28/07/2014

Moody's too optimistic about Portugal

The US rating agency Moody's has raised Portugal's credit rating by one notch to "Ba1". The outlook for the country is stable, the institute announced on Friday. With the next upgrade the country will leave the so-called junk status level. A highly surprising decision, journalist Camilo Lourenço writes in the liberal business daily Jornal de Negócios: "This upgrade comes at a time when various forces in the country - in particular, but by no means only, the constitutional court - are trying to block the measures for consolidating public finances. ... It's clearly a very friendly decision, especially since it comes in the midst of all the fuss over the private BES bank - and at a time when the first warning lights are flashing as regards meeting the budget deficit target for 2014 (four percent). ... If I was in their shoes I wouldn't be so sure this was the right decision." (28/07/2014)

Corriere del Ticino - Switzerland | 29/07/2014

Italy stalling on reforms

Italy's national debt has hit a new high. In the middle of July the Italian central bank announced that it had risen to 2.166 trillion euros. Italy must finally launch its long overdue reforms, the liberal daily Corriere del Ticino warns: "Little can be seen to date of the major cuts in public spending promised by the Italian government. And according to many investors, Prime Minister Matteo Renzi's call for more flexibility in Europe's fiscal policy instead is not having a positive effect for the government either. Italian government bonds haven't been targeted by investors yet because the European Central Bank is shielding them. But the danger is there. The concerns of many investors can already be felt at the stock exchanges in Milan and the rest of the Eurozone. The financial markets are still waiting for Italy to make a true change of course." (29/07/2014)

Svenska Dagbladet - Sweden | 29/07/2014

Fracking makes Europe more free

The British government began receiving tenders for fracking licences for the first time in six years on Monday. Sweden and the rest of Europe should also set aside their doubts about this controversial method for mining oil and gas, the conservative daily Svenska Dagbladet believes: "Certainly fracking entails risks. ... But Sweden won't be able to cover its energy demands with renewable energies alone. And for other European countries this is doubly true. Sweden doesn't need Russian gas exports, but countries like Finland, Lithuania, Bulgaria and above all Germany and Poland depend on Putin's gas. Shale gas and in the long term shale oil can make Europe more independent. This also goes for our oil imports from the Gulf states, where our money directly benefits undemocratic regimes." (29/07/2014)

15min - Lithuania | 28/07/2014

Lithuania's euro hysteria exasperating

On the first of January 2015 Lithuania will become the 19th country to introduce the euro. Rimvydas Valatka, chief editor of the portal 15min, is annoyed at all the rejoicing: "Lithuania will go down in history as the country that reached the highest level of hysteria on introducing the euro. Think of all we've heard: that afterwards Lithuania will finally belong to Europe (poor Brits, Danes, Swedes and Norwegians) and will be flooded with investors (interesting, but why?) or that the euro will counter Lithuanian populism. ... Even if money really can buy happiness, that doesn't depend on which currency you deal in. Since time immemorial what counts is how much you've got, be it in gold coins, rubels or litas." (28/07/2014)

Irish Independent - Ireland | 25/07/2014

Another bubble on Ireland's property market

House prices in Ireland rose by 24 percent on average in the last year, the Central Statistics Office of Ireland announced on Thursday. The conservative daily The Irish Independent feels reminded of the real estate bubble that burst in 2008 and the economic crisis that ensued, and calls on Prime Minister Enda Kenny to intervene: "High house prices inevitably trigger wage demands and this in turn erodes our competitiveness which has just recently begun to improve. To this end, low house prices, rather than high prices, should be the endgame. The politician in Mr Kenny may welcome the short-term electoral benefits that will come his way if he continues to preside over a house-price boom. The statesman should act now to halt an all-too familiar scenario which could end up posing another death threat to our economy." (25/07/2014)

Corriere del Ticino - Switzerland | 25/07/2014

China risking new cold war

The plan of the Brics states Brazil, Russia, India, China and South Africa to establish their own monetary fund is a further step on the path to a new cold war, the liberal daily Corriere del Ticino fears: "There's no doubt, China is the motor behind the initiative. ... Because Beijing has every reason to believe that the US will refuse to grant the Asian giant more international clout, and even take steps to prevent its rise. With its growing economic importance and strengthened by the strategic alliance with Putin's Russia, China is now questioning the role of the dollar, shaking one of the pillars that support the American superpower. ... It is almost certain that China's attempt to challenge the dollar will further deteriorate the international climate. It opens a new and dangerous chapter, and hastens the march toward a new cold war." (25/07/2014)


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