*The turmoil across the world continues.
Scandinavia has the jitters.
The /SUN/ is robust and other news here too.*
xxxxxxxxxx cs
*===========================*
*EU OBSERVER 29.10.08*
*/To some extent this is an understandable reaction from these countries
although the logic here is false. Firstly the euro countries did NOT
help one another in the crtsis. It was every country for itself./*
*/Secondfly the euro itself is coming under strain with the
Mediterranean economies drifting further away from the northern group . /*
*/The mere fact that Poland’s zloty has plunged 10% against the euro in
rtecent days is ominous for the zsloty is probably the most robust of
eastern European currencies. -cs/*
* *
*Financial crisis builds Polish euro-entry momentum*
/PHILIPPA RUNNER/
The financial crisis is building momentum for Poland to swiftly join the
EU's single currency on 1 January 2012, with a positive political
climate for the euro also developing in the Nordic states.
/"The world crisis has shown that it's safer to be with the strong,
among the strong and to have influence on the decisions of the strong,/"
Polish Prime Minister Donald Tusk said on Monday (27 October), adding
that his pro-euro policy is "/not based on any orthodoxy, any
ideology"/ of deepening EU integration.
The remarks came after a meeting with the chief of Poland's main
opposition party, Law and Justice head Jaroslaw Kaczynski, who opposes
an early entry date and wants Poland to hold a referendum on the move.
/"I am not excluding that Poland's entry into the euro zone could be
played out in a referendum," /Mr Tusk said, PAP reports./ "The
suggestion of a calendar to change the constitution [to allow the
currency shift] and then a referendum is worth considering, but it would
have to take place fast."/
The Polish government is on Tuesday expected to finalise a roadmap for
meeting its 2012 target and to present the document to President Lech
Kaczynski before launching talks with the European Commission.
The country will aim to join the ERM2 mechanism - which limits the
fluctuation of the Polish zloty to within 15 percent of the value of the
euro - by June next year.
The Polish zloty dived by over 10 percent against the EU's single
currency in recent days amid fears of a coming recession.
US bank JP Morgan on Monday also warned in a report that the zloty is
even more vulnerable than the Hungarian forint due to an imbalance in
foreign debt and foreign currency reserves, indicating that Poland may
need to borrow €10 billion from the IMF next year.
Economists from other banks, including ING and Societe Generale, told
Poland's Rzeczpospolita that the JP Morgan analysis was flawed. But
opinion surveys show ordinary Poles have the crisis on their minds, with
70 percent of people saying Poland should join the euro in a GfK Polonia
poll.
*Nordic rethink*
The reaction to the crisis in non-EU country Iceland has been even more
extreme, with the Icelandic krona losing over 40 percent of its value
and Reykjavik being forced to seek €5 billion in international loans to
avoid bankruptcy.
Almost 69 percent of Icelanders want to join the EU and 72.5 percent
want to swap the krona for the euro, according to a poll out Monday in
the Frettabladid newspaper. Approval for EU entry was at 55 percent
before the financial storm hit.
/"Icelanders are starting to have doubts about their krona. An
increasing number think the only solution is to act with other countries
and not in isolation/," Iceland's Institute of Economic Studies chief
Gunnar Haraldsson told AFP.
Denmark and Sweden, which rejected the euro in recent referendums, have
also begun a fresh debate, with the Swedish krona losing 7 percent of
its value against the euro.
/"I think to some extent, there will be a more friendly euro environment
after this sharp decline in the currency. It could be an issue in
Sweden's elections in 2010,"/ SEB bank chief economist Haakan Frisen
told the French newswire.
*====================*
*/THE SUN SAYS ----- 28.10.08/*
*/Cut to quick/*
*GORDON Brown and Alistair Darling must think carefully before deciding
to borrow and spend their way out of recession.*
Pump-priming is fine when you have the money. New power stations, roads
and rail links create jobs — though not overnight.
Tax cuts for low and middle earners, coupled with lower interest rates,
would be much more effective.
The trouble is Labour has already spent and borrowed too much.
There is nothing in the kitty. More borrowing today means
even *HIGHER* taxes later.
_That’s why the world downgraded its valuation of our economy, sending
the Pound into freefall_.
*Now the Bank of England is terrified of turning devaluation into a
vicious circle by cutting rates to the level we desperately need.*
*====================*
*ECONOMIC HEADLINES 28.10.08*
*Financial Times *
*==Iceland lifts rates to 18% from 12%*
Iceland’s central bank hiked interest rates from 12% to 18%, one of the
first indications of the dramatic impact a $6bn International Monetary
Fund-led rescue package will have on the country’s economic policy-making
The /SUN/ is robust and other news here too.*
xxxxxxxxxx cs
*===========================*
*EU OBSERVER 29.10.08*
*/To some extent this is an understandable reaction from these countries
although the logic here is false. Firstly the euro countries did NOT
help one another in the crtsis. It was every country for itself./*
*/Secondfly the euro itself is coming under strain with the
Mediterranean economies drifting further away from the northern group . /*
*/The mere fact that Poland’s zloty has plunged 10% against the euro in
rtecent days is ominous for the zsloty is probably the most robust of
eastern European currencies. -cs/*
* *
*Financial crisis builds Polish euro-entry momentum*
/PHILIPPA RUNNER/
The financial crisis is building momentum for Poland to swiftly join the
EU's single currency on 1 January 2012, with a positive political
climate for the euro also developing in the Nordic states.
/"The world crisis has shown that it's safer to be with the strong,
among the strong and to have influence on the decisions of the strong,/"
Polish Prime Minister Donald Tusk said on Monday (27 October), adding
that his pro-euro policy is "/not based on any orthodoxy, any
ideology"/ of deepening EU integration.
The remarks came after a meeting with the chief of Poland's main
opposition party, Law and Justice head Jaroslaw Kaczynski, who opposes
an early entry date and wants Poland to hold a referendum on the move.
/"I am not excluding that Poland's entry into the euro zone could be
played out in a referendum," /Mr Tusk said, PAP reports./ "The
suggestion of a calendar to change the constitution [to allow the
currency shift] and then a referendum is worth considering, but it would
have to take place fast."/
The Polish government is on Tuesday expected to finalise a roadmap for
meeting its 2012 target and to present the document to President Lech
Kaczynski before launching talks with the European Commission.
The country will aim to join the ERM2 mechanism - which limits the
fluctuation of the Polish zloty to within 15 percent of the value of the
euro - by June next year.
The Polish zloty dived by over 10 percent against the EU's single
currency in recent days amid fears of a coming recession.
US bank JP Morgan on Monday also warned in a report that the zloty is
even more vulnerable than the Hungarian forint due to an imbalance in
foreign debt and foreign currency reserves, indicating that Poland may
need to borrow €10 billion from the IMF next year.
Economists from other banks, including ING and Societe Generale, told
Poland's Rzeczpospolita that the JP Morgan analysis was flawed. But
opinion surveys show ordinary Poles have the crisis on their minds, with
70 percent of people saying Poland should join the euro in a GfK Polonia
poll.
*Nordic rethink*
The reaction to the crisis in non-EU country Iceland has been even more
extreme, with the Icelandic krona losing over 40 percent of its value
and Reykjavik being forced to seek €5 billion in international loans to
avoid bankruptcy.
Almost 69 percent of Icelanders want to join the EU and 72.5 percent
want to swap the krona for the euro, according to a poll out Monday in
the Frettabladid newspaper. Approval for EU entry was at 55 percent
before the financial storm hit.
/"Icelanders are starting to have doubts about their krona. An
increasing number think the only solution is to act with other countries
and not in isolation/," Iceland's Institute of Economic Studies chief
Gunnar Haraldsson told AFP.
Denmark and Sweden, which rejected the euro in recent referendums, have
also begun a fresh debate, with the Swedish krona losing 7 percent of
its value against the euro.
/"I think to some extent, there will be a more friendly euro environment
after this sharp decline in the currency. It could be an issue in
Sweden's elections in 2010,"/ SEB bank chief economist Haakan Frisen
told the French newswire.
*====================*
*/THE SUN SAYS ----- 28.10.08/*
*/Cut to quick/*
*GORDON Brown and Alistair Darling must think carefully before deciding
to borrow and spend their way out of recession.*
Pump-priming is fine when you have the money. New power stations, roads
and rail links create jobs — though not overnight.
Tax cuts for low and middle earners, coupled with lower interest rates,
would be much more effective.
The trouble is Labour has already spent and borrowed too much.
There is nothing in the kitty. More borrowing today means
even *HIGHER* taxes later.
_That’s why the world downgraded its valuation of our economy, sending
the Pound into freefall_.
*Now the Bank of England is terrified of turning devaluation into a
vicious circle by cutting rates to the level we desperately need.*
*====================*
*ECONOMIC HEADLINES 28.10.08*
*Financial Times *
*==Iceland lifts rates to 18% from 12%*
Iceland’s central bank hiked interest rates from 12% to 18%, one of the
first indications of the dramatic impact a $6bn International Monetary
Fund-led rescue package will have on the country’s economic policy-making
==*World ‘has six days to save Pakistan’*
German foreign minister urges rapid IMF help
==*ECB hints at action as outlook darkens*
Interest rates will almost certainly be cut again next week, the
European Central Bank has signalled, as collapsing German business
confidence confirmed the devastating impact the bank crisis has had on
eurozone growth
*Guardian*
*==**House prices show record fall in September*
Property prices in England and Wales fell by 2.2% in September and the
average house cost 8% less than in the same month last year, according
to official figures published toda
*==**Cost of crash: $2,800,000,000,000*
Autumn's market mayhem has left the world's financial institutions
nursing losses of $2.8 trillion, the Bank of England said today, as it
called for fundamental reform of the global banking system to prevent a
repeat of turmoil "arguably" unprecedented since the outbreak of the
first world war.
*== **From the Baltic to Turkey, fears grow of domino effect as nations
seek rescue*
• Eastern Europe feels the chill
• Hungary and Ukraine seek billions in IMF loans
• Falling oil prices raise fears for Russian economy
*Standard*
==*Shares bounce despite Bank's gloomy forecast*
Shares rose sharply as the City took time out from the continuing world
economic turmoil and a gloomy assessment of Britain's prospects from the
Bank of England
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