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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

It’s the politics, stupid!

There won’t be a news brief tomorrow, September 25, 2012.

Today, and possibly this entire week, is about politics, whether underlying or obvious.

The UK is getting a new bank. This government-backed brain child of Business Secretary Vincent Cable is the latest idea to poke the lending market back to life. The British business bank is a way of starting from scratch with a new clean balance sheet, argues Cable. A little bit like buying new socks after having worn a pair once. But the bank won’t be a public affair: privately run, proceeds from selling shares will add to the £1bn government injection. A harsh comment from the FT:

The announcement is, partly, an admission of failure of government attempts to free up lending. The coalition’s early loan targets for banks, Project Merlin, proved ineffective and was quickly dropped. It was replaced by a national loan guarantee scheme and, most recently, a “funding for lending” scheme to provide cheap finance to banks offering business or home loans.

Let’s see how long this one will be around for. read article

This week may see the official bailout request from Spain to the bottomless savings account that is the EU. This is exciting because it will test the ECB’s new bond purchasing policy and, well, it might save Spain. The request is contingent on the results from Spain’s bank review, determining available credit line. On Thursday, the country will also announce its 2013 budget, suggesting that the bailout business will wait until Friday. This may come to the discontent of Angela Merkel, whose cabinet said that Rajoy had to make up his mind rather sooner than laterread article

Next door in Portugal, the government has indicated to abolish an austerity measure that would increase worker contributions to lower overall labor costs to avoid a country wide protest. read article

Otherwise, the BAE-EADS merger is becoming more politicized, as BAE fears its customer relations with the pentagon will suffer, and the German Ifo business climate index fell unexpectedly to a 2.5 year low. Oh nein!

Meanwhile, China and Japan are edging further towards a full-blown political conflict, with three Chinese ships ‘casually floating through’ the disputed area of the East China Sea today. read article

And not just as far east, in BelarusAlexander Lukashenko, “Europe’s last dictator“, appears to have secured all parliamentary seats once again. read article

So long.

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2 Responses

  1. princess1960 says:

    thank you for the intristing article (news ) i did not read analitice but i can understand because i have read and listening news..
    i want give anshwere to your title POLITIC IS NOT STUPITIS DEVIL…no one use for intres to 99 …
    truble every were problems every were resolution nowere.
    sorry for not the comment you waiting ..

  2. […] the UK, George Osborne announced that his Funding for Lending scheme, which has yet to prove effective in any way, will be extended and enhanced, in his […]

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