July - December 2009

Brussels begins plan for EU “2020 strategy”
19 November 2009 – EurActiv
The European Commission is set to propose plans for a wide-ranging strategy to help the EU emerge from the recession and allow the member states to lead Europe towards a green, knowledge-based economy by 2020. According to a draft paper, a consultation on the strategy will be launched next week and a final proposal will be released next January, after the new European Commission begins. The 2020 strategy will replace the Lisbon Strategy, the plan launched in 2000 to help Europe become “the world’s most dynamic knowledge-based economy by 2010.” The new strategy will focus first on escaping the economic recession, but it will also stress the need to balance support for economic growth with long-term fiscal responsibility. In addition, the agenda will also emphasize the development of environmental sustainability and innovation, knowledge, and technology. “Europe’s strategy for the next decade should focus not only on rates of growth and employment but also on how growth can help build a better, fairer society,” the Socialist and Democrats group of the European Parliament recommended.
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European Commission warns states over mounting debt
11 November 2009 – EU Observer – Andrew Willis
The European Commission handed out a batch of excessive deficit reports on Wednesday and warned European governments, particularly Greece, to tackle rising debt levels. Austria, Belgium, the Czech Republic, Germany, Italy, the Netherlands, Portugal, Slovakia, and Slovenia were given the reports, which set out measures and deadlines to reduce their national deficits to below three percent of GDP—the rule outlined in the EU’s Stability and Growth Pact. The Commission also assessed the progress made by five member states that received similar reports in April, and rebuked Greece for its failure to carry out the necessary adjustments to decrease its debt. Stimulus funding and declining tax receipts have taken a heavy toll on government income, and the EU’s rising gross debt is becoming a serious problem.
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Tax Policies Blamed for Causing Global Financial Crisis
29 October 2009- Niko Kloeten- The National Business Review
Although almost everything under the sun has been convicted of creating the mass financial crisis of late, the Association of Chartered Certified Accountants (ACCA) has recently stated that tax regulations around the world are the real culprits. In a detailed report entitled "Competition or Co-ordination: Reassessing Tax in a Global Environment," the organization recommended ways to fix the tax discrepancies throughout the world. Some of these recommendations include how "governments should address national tax rules which distort behavior and reward one financing route over another." The organization also attempts to dispel the Transatlantic Economic Council's strong concept of economic "harmonization," saying that "countries in the EU... [need] to stop trying to pressure flat-tax countries into raising their rates in the name of 'harmonization.'"
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US, EU Pledge Work on Regulatory Trade Barriers
27 October 2009- Doug Palmer- Reuters
The members of the Transatlantic Economic Council gathered in Washington yesterday (October 27th) for their bi-annual meeting to discuss plans for 2010. At the meeting officials from the US and EU agreed to decrease regulatory barriers in order to increase trade across the Atlantic. Michael Froman, the White House Deputy National Security Advisor, commented on the partnership between the EU and US saying that "[t]he goal ... is to build on the already very deep and broad relationship we have between the US and the European Union to find further ways to integrate our economies." US and EU officials also agreed to launch a new US-EU Energy Council and to create a "innovation dialogue" article which would promote the creation of jobs in "information and communication technology," and "health information and clean energy" areas. However, this meeting epitomized the many opinions present. Ewa Bjorling, the Swedish Trade Minister and representative of the European Council, stated that there is increasing interest in Europe to establish a free-trade pact with the US. Quickly refuting Bjorling's statement, Guenter Verheugen, the Vice-President of the European Commission, argued that, because tariffs between the EU and US are already low, "a free-trade agreement would not address the regulatory barriers that are the real obstacle [in] expand[ing] transatlantic trade since tariffs between the US and the EU are already low."
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US Serious About getting DOHA Round Trade Deal: EU
26 October 2009- Doug Palmer- Reuters
Catherine Ashton, the EU Trade Commissioner, and other fellow participants held a discussion yesterday about concluding the Doha round table talks by 2010. Ashton commented saying, "I think first of all [that the Obama] administration is committed to open trade. It is committed to trying to resolve the Doha round." Ashton also stated that if the US were to focus more on the Doha rounds, the EU would also focus on Doha. Although Ashton is positive that President Obama and his team plan to make the Doha talks a priority, many WTO officials believe that the Obama administration is mired in domestic issues (economic stimulus package, healthcare, and the Afghanistan War) and will not be able to give enough attention to resuming the Doha rounds.
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US presses Europe for “energetic” economic talks
23 October 2009 – EU Business
A US official urged the EU to make a more “energetic” commitment to transatlantic economic discussions, ahead of next week’s meeting of the US-EU Transatlantic Economic Council. The council, which was launched by German Chancellor Angela Merkel and former US President George W. Bush, will meet on 27 October for the first time since Barack Obama became president of the US. “We want to establish a very energetic agenda for the remainder of the Obama administration’s term and the term of the new European Commission,” said the American government official. The US wants to cooperate more closely with Europe on the economic crisis, regulatory issues, energy efficiency, capital markets, intellectual property, transport, and innovation issues.
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New EU-US energy council to be created
23 October 2009 – EU Observer – Valentina Pop
The US and the EU are preparing to establish a joint energy council to coordinate policy initiatives relating to green technologies, research and development, and energy security on both sides of the Atlantic, according to a US official. The constitutive meeting of the body will likely take place on 4 November, after being formally announced by US President Barack Obama and European Commission President José Manuel Barroso during the US-EU Summit in Washington. The official said the council will be a mechanism for European and American policymakers to discuss methods to “promote energy security, energy markets, the development and deployment of green technology, even the development of common policies and standards.” He noted that the formation of the council reflects the fact that “energy is an important foreign policy priority for the US and a very important component of our bilateral relationship with the EU.” Also reflecting the council’s importance is the high level of the officials who will likely attend—the European Commissioners for Energy, External Relations, and Science and Research; EU High Representative Javier Solana; the Swedish foreign and energy ministers, representing the Swedish EU presidency; and the US Secretaries of State and Energy.
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What Will Romania do if Funds from IMF and EU are Delayed Until Next Year?
18 October 2009- Ciprian Botea- Ziarul Financial
While many European Countries are slowly approaching the breaking point where they can successfully climb out of recession, Romania is experiencing problems beginning the climb. Because of Romania's recent government fall out, both the IMF and the EU are lacking the reassurance they need to continue to aid Romania. The IMF is "postponing" their 1.5 billion euro tranche and the EU is rethinking the 1 billion euro tranche to Romania.
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Eurozone Trade Falls into Deficit
16 October 2009- BBC
While most economists agree that the global economy is on the slow but steady rise the eurozone is in a deficit; although the deficit was measured at $4 Billion euros this August while last year at the same time the deficit was around $11 Billion euros. The decrease from $11 Billion euros to $4 Billion euros marks a slow growth for the eurozone. However, because countries part of the eurozone are buying more than they are selling, the deficit will continue.
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IMF runs into political turbulence
14 October 2009- Pan Pylas- The Associated Press
The collapse of Romania's government on Tuesday merely highlighted the problems that the International Monetary Fund is likely to face in the future from loaning money to unstable and newly forming governments. Romania's collapsed government, Ukraine's estimated "turbulent" elections coming in January of 2010, and Latvia's probable budget cuts are some of the problems the IMF is now dealing with. Although the IMF has recently been slashed for attaching strict terms onto their loans, the organization recently, in attempts to alleviate this bad press, started a "no-strings loan program" for nations with "relatively good risks"; some of these countries include Mexico and Poland.
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Rebuilding the Economy: In a 'Rebalanced' World Economy, a Diminished US Role?
13 October 2009 - The Christian Science Monitor - Mark Trumbull
While in the years surrounding 2004, the citizens of the United States enjoyed a liberal lifestyle, the times of excess have finally reached an end. Because the financial crisis inhibited many U.S. consumers from spending the amount of capital they once did and the fact that U.S. consumers were such large players in the global economy, the stability of the world economy has been altered. Many economists around the world are now asking "Who or what will fill the hole left as U.S. consumers retrench? And how can nations - especially the U.S. and China - avoid a repeat of the kinds of imbalances that set the stage for the great recession?" While the first question may go unanswered for an extended period of time, strategists and economists alike are saying that the answer to the second question lies in establishing "longer-term shift in economic power from advanced nations to the emerging countries."
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Dollar Reaches Breaking Point as Banks Shift Reserves
12 October 2009-Ye Xie and Anchalee Worrachate- Bloomberg
More evidence that the world might be moving towards a global currency has been uncovered by officials at Bloomberg. According to Ye Xie and Anchalee Worrachate, central banks in countries across the globe are attempting to hold more euros and yen in their reserves instead of dollars. Many nations after the financial crisis "put 63 percent of the new cash into euro and yen in April, May, and June." The Intercontinental Exchange Inc.'s "Dollar Index" measures the dollar's strength against the euro, yen, pound, Canadian dollar, Swiss franc, and Swedish Krona, and found that the dollar has fallen to 75.77 within the last week, the lowest fall since August of 2008. Although several heads of state have openly threatened to "dump the dollar," Obama and his officials refuse not to use the dollar for fear of depressing U.S. exports and "driving away the nation's creditors." Diversification measurements have indicated that the dollar will not recover soon. According to Christoph Kind, head of asset allocation at the Frankfurt Trust, says that "[i]f there’s a turnaround in U.S. monetary policy, there will be a change of perception about the dollar as a reserve currency. The diversification has more to do with reduction of concentration risks rather than a dim view of the U.S. or its currency."
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Euro economy 'is out of freefall'
8 October 2009- BBC
While the rest of world is still recovering from the financial credit crisis of late, several countries part of eurozone are finally "out of [the] freefall" says Jean-Claude Trichet, the president of the European Central Bank. Although this advancement comes at a good time, the now newly stabilizing countries will only face gradual recovery, and measurements taken between April and June of this year have shown that eurozone economic exercises fell by 0.2%. Despite this minor setback, eurozone claims that countries including Greece, Poland, Portugal, and the Czech Republic have all "emerged from [the] recession." In fact, eurozone also claims that the economic systems in France and Germany have already "returned to growth." In a recent report by the International Monetary Fund, the organization estimated that eurozone's "gradual growth" would probably amount to about 0.3% GDP economic advancement in the "16-nation[s]" involved in eurozone.
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Finance: IMF Loan Policies Worsening Crisis, NGOs say
6 October 2009- Adrianne Appel-Global Analyst Online
Although the International Monetary Fund recently estimated a small growth in the global economy to occur in 2010, the organization might be reforming the way it lends money to third world nations. Many European NGOs like SOLIDAR, Eurodad, and the Global Network have highlighted fallacies in the IMF loaning policies to less wealthy nations; in a prepared statement to the IMF on Monday, 100 European NGOs pointed out that emergency loans given to El Salvador, Ethiopia, and Latvia did more harm then good. Even a prominent think tank in the U.S. has been noted saying that out of 42 nations, a majority of 31 of them were harmed from the loans. According to Mark Weisbrot, the co-director of the Centre for Economic and Policy Research in D.C., the "IMF loan terms represent 'policy mistakes' that should be fixed." Neil Watkins, the executive director of the Jubilee USA, was noted saying, "You have a double standard. Wealthy nations are saying, 'We are in economic crisis so we're going to spend more, increase our deficits and stimulate the economy.' But the IMF is telling poorer nations the opposite, to increase interest rates and cut spending." Although the G20 members recently agreed to give the IMF $750 billion dollars to help the "low-and middle-income nations" after the economic crisis, many European NGOs have yet to see the effects of this funding. Many economists worldwide want to see the IMF change its loaning practices to "encourage long-term, stable growth" instead of loans that "eas[e] short-term, day-to-day operation[al] funds."
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Global Economy Expanding says IMF
1 October 2009- BBC
While the global economy may have faced extreme peril last winter, the financial environment has "improved significantly" according to the International Monetary Fund. The pace of recovery, however, is likely to be "slow" and "insufficient to decrease unemployment for quite some time" IMF officials stated. The IMF has recently restated that banks will only loose an estimated a $3.4 trillion between 2007 and 2010, instead of losing $4 trillion which was reported previously. The IMF calculates that the U.S. economy will "contract by 2.7%" this year before "growing 1.5% next year." The IMF also calculates that Eurozone will "shrink by 4.2% this year and grow by 0.3% in 2010." In fact the recovery progress has taken strongly in Asia, while, according to the IMF, the recovery process is "now being seen in developed economies, where 'financial market sentiment and risk appetite have rebounded.'" substantial recovery does not, however, come without risks. Among these risks is how banks are now holding more capital in reserve which restrains the amount of accessible credit; people who borrow from these banks, have to invest, therefore depressing demand.
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IMF Says to Revise up 2010 Global Growth Forecast
28 September 2009- ABC
The global economy is slowly making a come back. According to Murilo Portugal, the International Monetary Fund's deputy managing director, the organization plans to re-publish its forecast for 2010. The IMF had originally forecasted that the economy would grow an average of 2.5 percent in 2010; now because of the rapidly growing economy, at a pace that was not even imagined, the IMF is changing this forecast to 3 percent growth. Portugal was noted saying that "[t]he recovery is stronger then initially forecasted."
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EU Calls for European Banking, Securities Regulators

23 September 2009- Bloomberg- Ben Moshinsky
In an effort to protect European taxpayers, the EU has proposed "banking, securities and risk monitoring agencies" which would, if established, be able to observe the economic status among its member states and provide its members with early warnings about foreseen threats to the economic status quo. Today in Brussels, members of the European Supervisory Authorities organization will create a base of cohesive standards for the proposal. The plans for the proposal were supposedly motivated by French banker Jacques de Larosiere's report about locating a method to "harmonize" economic "supervision" throughout Europe. Larosiere's report also suggested the implementation of a "systemic risk board and three authorities" to work under this board. "Draft Legislation" is a key component of the proposal that essentially would grant three EU officials the right to arbitrate in agreements made by national officials when deemed necessary by the EU; these three officials will be granted with "investigatory and law-enforcement powers" as well as the right to subpoena information from financial organizations. Another key component of the proposal is the formulation of a "risk board" which would have the authority to signal financial organizations about foreseen financial threats, but not to require these organizations to react to the warnings.
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Who runs the global economy?
21 September 2009- BBC- Steve Schifferes
Amongst the many economical issues which are planned to be discussed at the G20 conference is the how to reform the global economy in order to avoid an economic crisis like one that the world faced last winter. The discussion of global economic reform is rooted in the new power which was given to the IMF at the London Summit a few months ago; at this summit the IMF was given more liberalization in observing and reporting to the G20 leaders the global economic status in exchange for dulling down the "harsh conditions [it] attached to its loans." One of the proposals of this reform is how to re-organize the current authoritative functions of the world economy. Officials attending the G20 plan on changing the way the economy is "governed" through global aid organizations such as the World Bank and the International Monetary Fund. According to the author, the recent global economic collapse has highlighted the problems within the IMF particularly in how countries are represented; countries like China and India, whose imports are aiding Europe and the U.S. out of a recession, do not have the same voting weight as the recession immersed countries do. While the U.S.'s voting weight alone accounts for 25% in the IMF, all the European country members combined account for 25%, and this means that because IMF legislation is passed with only 85% of the vote, the U.S. is the only single country that can block a vote. Aside from re-organizing how organizations like the IMF and the World bank "govern" the global economy, the members of the G20 also plan to discuss how to get governments to collaborate to solve global economic crisis' in the future.
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G20 'to Call for Economy Balance'
21 September 2009- BBC
According to BBC officials, an unreleased document will be presented at the G20 meetings later this week in Pittsburgh. The document outlines the proceedings for the already public plan for reforms encouraging a "more balanced global economy." Understanding that the imbalances in the global economy must be fixed, the International Monetary Fund and the Financial Stability Board at the G20 conference, will be responsible for formulating "transparent and credible" means of re-tracking the financial support that was granted to numerous countries during the economic crisis. The document expresses the opinion that financial support will eventually be withdrawn even though the method of cutting down costs and the time period at which these costs will be cut under is to be left up to the individual countries. No country is mentioned directly, it appears however that the reason for leaving the countries to determine their own cut-back terms were the comments made earlier by the British Prime Minister Gordon Brown when he expressed his view that relatively wealthy countries, such as the United States and Great Britain, should retain more funds, while savings-conscious countries like China and Germany should increase investments.
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EU Agrees on Bonus Claw-Back Call
17 September 2009- BBC
Next week the UK, Germany , France, and Italy will be the only members of the EU attending the G20 conference to discuss mandatory restrictions on banker's bonus.' While EU officials plan to demand that a global deal be passed which would limit the amount of bonus' granted to bankers worldwide, the US and the UK are the only known opponents of the plan. According to Mike Froman, the deputy national security advisor for international economic affairs, President Barack Obama "has been clear that he supports a robust approach to executive compensation," but the President has not reported any exact bonus levels yet. Even the UK Prime Minister Gordon Brown has commented on this bonus plan saying that "people have been appalled by the suggestion (of such a bonus plan) in some institutions and ... they simply want to return to the policies of the past." EU officials have already agreed upon a clausal proposal for the G20 which outlines the organization's desire for "binding rules for financial institutions on variable remunerations backed up by the threat of sanctions at the national level." EU officials admit that the "threat of sanctions" will be used to encourage banks worldwide to grant bonus' based on long-term, not short-term, achievement. If the EU fails to bring about a change in banker's bonus,' the French President Nicolas Sarkozy has already threatened to walk out on the G20. Sweden's Prime Minister Fredrik Reinfeldt, another supporter of the EU's bonus plan, has said that the global banking system needs to move away from its "short-term" merit system that it now relies on.
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Transatlantic Economic Integration and Co-Operation is and will Remain a Priority for both the European Commission and the US Government

9 September 2009- The Economic commission- Speech by Günter Verheugen

In a recent speech over the EU-U.S. economic relations, Günter Verheugen, the Vice-President of the European Commission, stressed both the importance of having the Transatlantic Economic Council (TEC) as a major player in the global economy and establishing a system of global harmonization starting with the convergence of trade security measures between the EU and the U.S.. Verheugen explained that the TEC's bilateral trade proceeds of $600 billion a year and more than 14 million jobs depend on the continuization in reducement of trade barriers from both the EU and the U.S. He went on to stress that the global economy, particularly the economic relationship between the EU and U.S. markets, depends on harmonization or "mutual recognition of standards and regulations" in order to reduce cost to the final consumer. Verheugen went on to explain that the harmonization in policies between the EU and U.S. regarding the security regulations in trade is of particular importance. The U.S.'s policy about scanning 100% of the containers entering U.S. ports is an concern for the EU in that this policy is a barrier to the "free movement of goods." To solve this problem, the European Commission has begun researching alternative security measures that would both allow for the "free movement of goods" while also allowing the U.S. to scan all containers. Verheugen concluded his speech by explaining how the global economic crisis has given both the EU and the U.S. the opportunity to re-organize their security practices to benefit the harmonization of the global economy, an opportunity that Verheugen hoped they would take.
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Europe's Easiest Economy

9 September 2009- BBC
Despite the turbulent economic environment evident throughout the world in the beginning of 2009, many countries have still managed to keep the ease in "conducting business" in their domestic economies. According to the World Bank, which ranks the top 131 best economies to "conduct business" in. The 2009 rankings showed that Singapore was the best country, followed by New Zealand, Hong Kong, The United States, United Kingdom, Denmark, Ireland, Canada, Australia, and Norway. Ironically, this list does not include Switzerland, which just beat out the United States for the most competitive economy. The World Bank also found that out of the 131 economies measured, 287 of them conducted reform tactics; "reformers around the world focused on making it easier to start and operate businesses, strengthening property rights, and improving commercial dispute resolution and bankruptcy procedures." While most of the reforms were conducted by Eastern European nations, the top reformers was Rwanda, making it the first sub-Saharan economy to produce as much reforms.
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G20 plans to reshape financial system
7 September 2009 - Irish Times
G20 members are committed to forging new rules for the financial system, Financial Stability Board (FSB) president Mario Draghi has said. At the request of the G20, Mr. Draghi will present a detailed plan to G20 leaders who meet in Pittsburgh later this month. Taking a position supported by the EU and the US, Draghi has expressed the need for banks to build capital stock and control compensation. The basic outline of the compensation control plan involves independent world oversight of compensation policies, greater links between compensation and performance, and greater disclosure. G20 financial ministers have also emphasized the need for a more unified, global set of accounting standards.
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G-20 to Maintain Economic Stimulus Measures, Payout Crackdown
5 September 2009 - AP
G20 finance ministers have concluded their meeting in London with an agreement to curb hefty bankers' bonuses and maintain stimulus measures. The group also pledged reforms of the financial system, as well as a tougher stance towards tax havens and a greater say for developing countries in global institutions such as the IMF and the World Bank. While the agreement on bankers' bonuses fell short of European hopes, the ministers agreed to give the Financial Stability Board, established at the April G20 summit, the task of drawing up proposals for the Sept. 24-25 leaders meeting in Pittsburgh.
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OECD Agrees to Strengthen Tax Forum
3 September 2009 - Wall Street Journal - Bob David
Delegates to an OECD conference in Mexico agreed to turn the Global Forum on tax-information sharing, a loose grouping of 84 nations, into a more powerful institution that could crack down on tax cheating internationally. The plan, part of a G20 effort to restrict tax havens, gives the Forum its own staff and an annual budget of about $4 million, enabling it to examine whether members are cooperating and living up to their obligations under tax-exchange agreements. The delegates agreed that the Global Forum would operate by consensus, but that no single country could block publication of a review.
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‘Supergrid' for European Gas, Power Is a Priority, Barroso Says
3 September 2009 - Bloomberg - Ewa Krukowska and Jonathan Stearns
European Commission President Jose Barroso said establishing a Europe-wide grid for electricity and natural gas would be a policy priority over the next five years to ensure sufficient energy supplies and reduce dependence on Russian gas. Writing in a five-year action plan for his second term as president, Barroso called this "the next great European project." Barroso also expressed hopes for energy projects such as a Mediterranean interconnection plan and links between African suppliers and the EU.
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EU Backs Limits on Bank Bonuses
3 September 2009 - WSJ - Adam Cohen and Paul Hannon
EU finance ministers, meeting in Brussels to prepare a common negotiating stance for the G20 summit, have cited curbs on bankers' pay as their main priority and backed relatively tough proposals from France. The U.K. has also forwarded its own proposals, which include having bonuses paid over five years. Meanwhile, a committee of the European Parliament met to consider proposals to increase the transparency and to limit the leverage of hedge funds and private-equity firms.
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Barroso plans more EU, euro zone cooperation
3 September 2009 - Reuters - Marcin Grajewski
Jose Manuel Barroso has vowed to seek more cooperation within the European Union and the euro zone if elected for a second five-year term as president of the European Commission. In a policy statement sent to the European Parliament, he said that closer ties within the blocs are needed to ward off economic crises and to withdraw the fiscal stimuli with which governments have battled the worst downturn in decades. The statement emphasized the importance of a coherent, coordinated stimulus exit strategy accompanied by low interest rates across Europe. Barroso also sought greater economic surveillance powers for the European Commission, and promised to use all the powers available under the EU treaty to facilitate a unified economic policy.
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US seeks G20 deal on IMF vote change
2 September 2009 - Reuters - Lesley Wroughton and Anna Willard
The United States will use the upcoming G20 summit to seek greater IMF voting power for emerging market countries, according to G20 officials. The Obama administration considers a shift to such countries as Mexico, China and Brazil an essential step as the world emerges from recession. However, European countries tend to prefer a shift to both emerging and developing countries. Officials see the G20 summit as an opportunity to generate political momentum for whatever change is sought by producing a joint statement and agreeing on the exact percentage shift sought. The IMF has set a deadline of early 2011 for an agreement.
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US submits financial sector reviews to IMF
31 August 2009 - AFP
The Treasury Department and US financial system supervisors and regulators have transmitted self-assessments for banking, securities, insurance and payment systems to the IMF as part of the United States' first examination under an IMF financial stability program. The Financial Sector Assessment Program was launched by the IMF and the World Bank in 1999. The IMF said that its staff will work closely with American financial regulators on the examination until its expected completion in 2010.
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Sarkozy, Merkel seek common EU position ahead of G20
31 August 2009 - AFP - Simon Sturdee
President Nicholas Sarkozy and Chancellor Andrea Merkel said after talks in the German capital that they were sending a joint letter to current EU presidency holder Sweden urging the bloc to agree on a common position ahead of the G20 summit. They proposed an EU meeting for September 17 in hopes of achieving this agreement. Sarkozy and Merkel also expressed a desire for aggressive implementation of the new financial regulatory measures agreed on in April and further progress on limiting bankers' bonuses. The talks between the two leaders will be followed by a Gordon Brown visit to Berlin.
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U.K.'s Darling Seeks More European Funding for IMF Before G-20
31 August 2009 - Bloomberg - Simon Kennedy
U.K. Chancellor of the Exchequer Alistair Darling urged European governments to hand the International Monetary Fund more money in order to support poorer countries impacted by the global financial crisis. Writing four days before he hosts a London meeting of G20 finance ministers, Darling said the 27 European Union nations should provide the IMF $75 billion on top of the $100 billion they've already committed as part of a G20 agreement in April. This move, Darling said, would help Europe "set an example" for the rest of the G20. Darling also urged G20 countries to continue with long-term reforms to the financial sector.
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Bio-Fueling a Trade War
4 August 2009 - Wall Street Journal Europe - Benedetto Della Vedova
In June, the European Commission adopted regulations about international trade of green energy technology that might trigger a global trade war which would harm both the economy and the environment. This "Renewable Energy Directive" pushes the EU to increase amount of energy generated from renewable sources - including biofuels - but European biofuel producers succeeded in pressuring Brussels to restrict imports of biofuels from abroad. Furthermore, both European biofuel producers and environmental NGOs are pushing Brussels to use the Indirect Land Use Charge, a concept where overseas biofuel producers are punished for their supposed indirect impact on land uses and food prices. This would negatively impact both US and Asian biofuel exports into Europe, and end up in protectionism masked as environmentalism.
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Leading with services: The dynamics of transatlantic negotiations in services
31 July 2009 - Vox.eu - Patrick A. Messerlin, Erik van der Marel
Both the EU and the United States are largely service-based economies, and Patrick Messerlin and Erik van der Marel suggest that transatlantic service negotiations could potentially jumpstart the now-stalled Doha Round with the WTO. Since both US and the EU countries would benefit from these kinds of openings, Messerlin and van der Marel believe that these negotiations would in turn seamlessly lead to the plurilateral negotiations with eight other countries to include 80% of world services output. Right now, they believe, is the best time to start these negotiations, as business and communication services are largely resilient to the current economic crisis. In turn, this would give an opening to the transatlantic relations to extend into Asia, and keep the US looking towards the east.
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OECD countries seen losing 30 million jobs from 2007-2010
14 July, 2009 - Reuters
The Organization for Economic Cooperation and Development (OECD) predicts that developed countries will lose 30 million jobs between 2007 and 2010. These job losses are mainly due to the financial crisis and the economic downturn that has pushed most developed countries into recession. Although many economists and government officials expect the global recession to bottom out by the end of 2009-early 2010, unemployment numbers will remain high because labor markets usually "lag the recovery in economic output as employers squeeze more production out of workers through longer hours before hiring more people." Therefore, many consumers are wary of increasing "discretionary spending" despite some signs that the recession may soon end. In the United States, White House economists predict that the US unemployment rate will increase from 9.5% to 10% in the coming months.
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G8 announces huge food security package
11 July 2009 - AFP
Vowing to support the world's poor despite their own nations' troubled economies, the G8 unveiled a $15 billion boost for food production. Unlike traditional food aid, this package is aimed at helping the developing world gain self-sufficiency. G8 leaders, joined by leaders of several African nations, also pledged to work for water and sanitation improvements.
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IMF approves issue of bonds
3 July 2009 - Bloomberg - Timothy Homan
The IMF has approved the issue of bonds to its 186 members for the first time. The bonds are part of an effort to obtain $500 billion in new funding as the IMF helps countries deal with the consequences of the global financial crisis. Emerging markets such as China , Russia and Brazil see bond purchases as opportunities to have a greater say in the Fund. The notes will be denominated in special drawing rights, or SDRs, which represent a basket of currencies consisting of the US dollar, the euro, the yen and the British pound. There will be no limit on sales of the notes.
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