ARAb StAtES diSMAyEd At WESt'S cOMPlAcENcy - Kuwait Times
ARAb StAtES diSMAyEd At WESt'S cOMPlAcENcy - Kuwait Times
ARAb StAtES diSMAyEd At WESt'S cOMPlAcENcy - Kuwait Times
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Qatar extends buying spree to<br />
India with $1.3bn Bharti deal<br />
airline lipstick ban<br />
Business<br />
SATURDAY, MAY 4, 2013<br />
16<br />
Turks see red over<br />
17<br />
RBS eyes return<br />
19<br />
to private sector<br />
US jobs data points<br />
to sluggish economy<br />
20<br />
WASHINGTON: A jobs sign is seen on the front of the US Chamber of Commerce building in this photo in Washington, DC. — AFP<br />
EU sees deeper recession coming up<br />
Euro-zone members caught in fierce debate<br />
BRUSSELS: Recession in the crisis-hit euro-zone will be deeper<br />
than expected for the rest of the year, hitting even Europe’s<br />
biggest economies and leaving unemployment at record levels,<br />
the EU warned yesterday. Though signs of recovery could<br />
emerge in 2014, four of the euro-zone’s biggest economies-<br />
France, Italy, Spain and the Netherlands-will see negative<br />
growth, the European Commission said in its spring forecast.<br />
Economic output in the 17-nation area-home to 340 million<br />
people and a global rival to the United States, Japan and<br />
emerging giants-will shrink by 0.4 percent this year, worse<br />
than the 0.3 percent forecast in February and after a 0.6 contraction<br />
last year. The failure of Europe’s economies to emerge<br />
from the debt crisis means record unemployment that last<br />
month saw 19 million people on the dole will endure, though<br />
differences are wide between richer euro-zone states to the<br />
north and those to the south.<br />
“In view of the protracted recession we must do whatever it<br />
takes to overcome the unemployment crisis in Europe,” said<br />
the EU’s commissioner for economic affairs Olli Rehn. Eurozone<br />
joblessness this year would hit a record 12 percent and<br />
11 percent across the whole 27-member EU. The rates vary<br />
hugely, with an alarming 27 percent in Spain and Greece,<br />
which Rehn said was “unbearably high”, but a low 4.7 percent<br />
in Austria and 5.4 percent in Germany.<br />
France, the euro-currency area’s second economy, will<br />
shrink by 0.1 percent in 2013 as weakness in household<br />
demand, a key economic driver, finally takes its toll. France will<br />
then rebound to 1.1 percent growth in 2014, the data said. But<br />
France, along with Spain and the Netherlands, will miss commitments<br />
to meet the EU’s 3 percent of GDP deficit ceiling.<br />
France will post a 3.9 percent deficit this year and a 4.2 percent<br />
shortfall next year.<br />
Rehn said it would be “reasonable” to provide Paris with an<br />
extra two years to meet the target-an offer also already made<br />
to Spain-but appeared to chide the country’s Socialist government,<br />
calling for “more important and urgent efforts” to trim<br />
spending. Spain will continue a hard slog from its crisis,<br />
brought on by the 2008 implosion of a decade-long housing<br />
boom, and should contract by 1.5 percent in 2013 before<br />
reversing to 1.4 percent growth in 2014.<br />
But Spanish public finances will remain dire well into next<br />
year with a government deficit of 6.5 percent in 2013 expected<br />
to worsen in 2014 to 7.0 percent as certain measures<br />
expire. The crisis will be hugely felt in recently bailed out<br />
Cyprus where output is expected to contract by 8.7 percent<br />
this year in the wake of a severe restructuring of the island<br />
nation’s key banking sector, including a controversial “haircut”<br />
on deposits.<br />
The Cypriot recession will prolong into 2014 and beyond,<br />
the Commision said, with the economy expected to contract<br />
by an overall 15 percent between 2012 and 2015.<br />
In a rare glimpse of encouragement, the Commission saw<br />
recovery in Greece by the end of the year after six consecutive<br />
years of recession. <strong>At</strong>hens is forecast to eke out 0.6 percent<br />
growth in 2014, after contracting sharply by 4.2 percent this<br />
year. With signs of recovery still wanting, euro-zone members<br />
are caught in a fierce debate over the way out of the crisis,<br />
with hard-hit countries to the south clamouring for an end to<br />
austerity policies championed by Germany and like-minded<br />
states to the north.<br />
The latest raft of grim data comes a day after the European<br />
Central Bank cut interest rates to a new record low in an effort<br />
to do its part to unwind a crisis now in its third year. — AFP