On Wednesday, the European Union Commission approved plans to combine the energy markets of its twenty-eight member countries into a unified energy market. The Commission stated that the EU Energy Union would provide many benefits to the countries of the EU, lessening their dependence on energy supplies from foreign countries and boosting their economic power significantly. The ambitious plan is facing some criticism, and has yet to be approved by the European Parliament as well as the EU's member countries, but it certainly has the potential for major influence on European economics.
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On February 19, the German government rejected Greece’s request for a 6 month extension to its Eurozone program. Germany had hoped that Greece would renew its existing deal that contains harsh austerity conditions, and a German Finance Ministry spokesman claimed that the proposed assistance package was “not a substantial proposal for a solution”. The Finance Minister himself, Wolfgang Schaeuble, stressed that no new payment of funds would be given to Greece until a new deal was made. Despite the Greek economy growing in all four quarters last year, it has been in recession for almost 6 years and must take measures to improve the condition of its economy.
Ask and you shall receive. The Greek population decided it was time for a change in government and just last week, Greece elected and swore in its new prime minister, Alexis Tsipras. The prime minister represents a leftist party and reflects the desire of the Greek people for reform just years after a major bailout. Tsipras ran his campaign based on the issue of renegotiating the ensuing debt that citizens have blamed for large increases in unemployment and a recession.
Since the Eurozone has been at a very low inflation level for quite some time and people have become more conservative in their spending, the issue of pushing the economy up has been raised by the European Central Bank. The ECB President, Mr. Draghi said, “for growth to pick up, you need investment. For investment, you need confidence. And for confidence, you need structural reforms.” Then, a 60-billion-euro-a-month bond purchase program became such a structural reform last week. This blog will examine both the regional and international impacts of this quantitative easing policy.
“Iran is the last, large, untapped emerging market in the world.” These were the words of Ramin Rabii, a chief executive of the top foreign investment company in Iran, following The 1st Europe-Iran Forum. At this forum hundreds of international investors met with Iranian business leaders, and also heard from speakers such as the United Kingdom’s former foreign secretary Jack Straw.
It is no surprise that the German economy has been instrumental in balancing the struggling Eurozone. France, along with Germany, are the Eurozone’s brightest economies and are leading the way towards a much needed economic recovery. Germany has been able to weather the strained economy and has held its own during the recession with positive growth projections. However, the woes of the Eurozone countries, along with foreign factors, are beginning to wear on the German economy and are causing more setbacks than before. A survey taken by the German Ministry of Economics shows that Germany's manufacturing activity has shrunk for the first time in fifteen months, an example of how the stalling Eurozone economy is affecting Germany.
A recent U.S. Commercial Service event in Los Angeles, California focused on the export and business opportunities available in Europe for U.S. companies. A video highlighting The Discover Global Markets: Europe conference discusses the many takeaways from the conference and provides an overview of specific trade opportunities in the European market. The video also discusses how the U.S. Commercial Service can assist companies in developing a strategy to start or expand a business in Europe.
Over the last forty years, Luxembourg has become the financial hub in Europe and has served private and corporate clients all over the world, thanks to its extremely open market policy. The country’s financial sector is well-known globally for its expertise and sophistication. Even when most countries were suffering from the financial crisis, the banks in Luxembourg continued to earn substantial profits. According to a KPMG banking report, Luxembourg's bank profits grew by 42% in 2012. So, what has contributed to Luxembourg’s success in the global financial market and what is unique about Luxembourg’s banking industry?
It's no secret that the Eurozone is an economically struggling region of the world, and although it has been recovering from the blow caused by its economic crisis, it has been doing so very feebly. Now, the recovery has suddenly stopped; in the second quarter of the year, the Eurozone was recorded as growing 0%. While economists say that the overall Eurozone economy should not sink into a recession yet again, it does not seem like the recovery will pick up its pace anytime soon. The future of its countries economies all depends on what actions the European Central Bank takes.
Angela Merkel, the current chancellor of Germany, has been reigning over the country for 8 years. Her approval rating of 71% seems expected when you consider the 2014 estimated GDP growth in Germany. Compared to the Eurozone average of 0.25% Germany’s domestic demand and increase in construction have been great assets to the country’s economy. Despite her success as chancellor, some believe that she is not taking actions that will positively impact the long-term economy.
International economists are all asking the same question: Is the Eurozone's financial crisis over? For a region of the world that has borne some of the worst repercussions of the Great Recession, it could potentially be said now that the biggest brunt of the crisis is over, and the countries of the Eurozone are now on their (uneasy) way to recovery. However, this is not a confident prediction. Several factors, such as worryingly low inflation and high unemployment, are still present in these economies, showing that more problems may still be nigh. At this point it may be dangerous to assume the Eurozone has seen the last of its economic woes. Here is a closer look.
Thanks to positive growth measures, the economy of the euro zone for the past month grew at its fastest rate in three years. Specifically, the release of the monthly Purchasing Managers Index (PMI) was an ample measure to earn more confidence from investors in European economy.
As Russia prepares to make Crimea part of Russia, other countries have watched from afar and have developed plans to impose economic sanctions on Russia. Government officials from the United States have already signed an order enabling economic sanctions against sectors of the Russian economy. Leaders from the European Union are also considering their options as they meet in Brussels to discuss economic sanctions against Russia. With economic sanctions on Russia looming, the impact on Russia and the global economy remains to be seen.
This September, the ballot to vote on Scottish Independence will be held. Scotland’s North Sea possesses a great amount of oil revenue for the United Kingdom, which poses a threat to the United Kingdom if Scotland were to become independent. What does this mean economically and politically for the country of Scotland, the United Kingdom, and the European Union? A lot of uncertainty. The rarity of the creation of a new state in Western Europe poses a lot of questions that economists do not know the answer to.
The French unemployment rate has hit a record high, currently standing at about 11.1% for 2013. In December alone, about 10,200 people listed themselves as jobless. This 0.3% is only a fraction of the 3.3 million who registered as out of work for the entire year, a figure that has never been higher. Additionally, increases in unemployment have been observed across all sectors and also take part-time workers into account. The 5.7% rise in unemployment is unfortunate news for French President Francois Hollande who had previously promised that joblessness would fall by the end of 2013.
Advertising strategies have greatly changed in the past 10 years as globalization spreads to every corner of the world. Companies with high local prestige now attach large importance on expanding their overseas markets with the hope of receiving great returns. Problems often arise in advertising when cultural differences are disregarded. Often culture is overlooked as simply expanding the brand name in foreign markets becomes the major obsession of the manager. This blog will briefly discuss major issues associated with international advertising and will also provide possible solutions.
Forecasts from the World Bank show that the global economy should experience more growth in 2014 than what was expected seven months ago, showing that the world’s economy is finally turning a corner from the recession of recent years. According to a report released on January 14th, the world’s economy should grow by 3.2%, up from the 3% projection made in June. This is good news to many investors and business people around the world, since it is the first time in three years that the World Bank has revised their forecast and predicted improvement.
Recently, Standard & Poor downgraded Netherlands' sovereign debt from a coveted AAA rating to a AA+ rating. The downgrade came as S&P sees a weak growth outlook, even though the Netherlands is seen as part of Europe’s healthy economic core. Also, S&P raised its outlook on Spain from negative to stable, showing that some of the struggling southern European countries may be recovering. As many southern countries continue to improve economically, some of the northern countries are suffering from poor growth prospects.
Recent financial figures have shown that several countries around the globe have experienced some of their lowest inflation rates in years. Normally this would be the goal of the nations' central banks, but in the economic states of these regions, this low inflation could be the source of several problems. Now the issue facing many of the world's richest nations is to avoid extremely low inflation and to try and raise prices. The proposed processes to achieve these goals have the potential to lead to some intense competition.
Over the last 30 years, Russia has been the only gas supplier to the Baltic countries of Estonia, Latvia, and Lithuania. As the gas price and demand has dramatically increased in the Baltic States, the European Union (EU) is has made plans to subsidize a regional liquid natural gas (LNG) terminal in the Baltic States. These plans are designed to decrease the Baltic countries' energy dependence on Russia and to meet the continually increasing gas demand. However, two issues aroused along with the project: where to build the LNG terminal and how to ease the relationship with Russia.
The British bank HSBC recently came out with a study that looked at the best countries for expatriates, people residing in another country, to live in based on economic opportunities and quality of life. The study came out with some surprising results. Amongst the best countries for expats to live in include small rich countries, and amongst the worst are Western European countries. Although some of the countries have better qualities of life, many of these countries are not welcoming to foreigners.
The country with over twenty-five percent of its population unemployed has finally climbed out of recession with third quarter growth up 0.1 percent. With an economy that is driven mainly by the tourism sector, automobile industry, and the energy industry, Spain has managed to slow down its rate of poverty and unemployment enough to stop the recession. The bailed out banking sector is still far from cured and the giant amount of debt will still hold them back in the years to come, but the government has taken steps in the right direction in gaining control of these areas of the economy.
While the European economic crisis appears to be gradually resolving, the International Monetary Fund (IMF) is insistent that the improvement being observed is not actual. Although the deficits of struggling economies such as Greece, Portugal, Ireland, and Spain are contracting, this is due to a collapse in imports as a result of the recession, not an increase of trade exports. The IMF has also taken note of lowering labor costs, but attributes the decreases to mass unemployment rather than pay cuts for workers. Consequently, even though economic indicators are showing signs of improvement, these events could be causing an even larger cyclical downtown for Europe. Since European banks have allowed large amounts of loans to be taken out, they too are unable to invest in businesses which might support infrastructural growth. As a result of this, the United Kingdom in particular is seeking help from international business partners to mitigate the issue.
In the last five years, many economies around the world went through a recession or had their growth stunted significantly due to the financial crisis. Although Europe seemed to have the worst economic effects from the crisis, the new 2012-2013 Global Competitive Index produced by the World Economic Forum reported that European economies are still the strongest economies in the world. Switzerland grabbed the top spot in the rankings, and Europe was well represented towards the top of the list.
In his recent article, Michael Burda, a Professor of Economics at Humboldt University Berlin, suggests the European Central Bank (ECB) should be redesigned with regional rather than national central banks. The column proposes that instead of each country having a national bank, boarders should be drawn to create regional banks. The United States, which has 12 regional banks, is a country that uses this central bank system.
The international trade of consumer products is a regular occurrence and nearly everyone in the world is aware of its role in the global economy. However, how many people are cognizant of the fact that cities use imported garbage from neighboring countries and turn this waste into energy? I am guessing that not many people have heard of this phenomenon. This is exactly what is happening in the city of Oslo, located in southern Norway.
No matter where you are in the world, the sustainability of almost every economy depends on one critical idea. Young and highly educated workers must be able to fill the void created by an aging population leaving the workforce. In the competitive global economic landscape of today, even highly developed countries cannot afford to slide into downward educational trends. One can obtain great foresight into the future outlook of the global economy by simply comparing international education across industrialized economies. This analysis leads to the discovery of many surprising revelations about the future setting of the global economy.
While the unemployment rate of Spain and Greece roaring extremely high these days and economies in the European Union rest down in the trough, good news has finally arrived from the Office of National Statistics. Recent statistics showed that the United Kingdom's economy grew 0.3% during the first quarter of 2013, which relieves the fear of the British economy falling into a triple-dip recession. Is this a sign that United Kingdom is getting itself out of the European Financial Crisis?
Starting a business is not an easy task. It’s one that takes hard work, dedication, and an entrepreneurial spirit that is willing to take on challenges. Despite the many challenges faced by entrepreneurs, starting a business has become easier in certain parts of the world as policymakers begin to recognize the importance of entrepreneurship. Entrepreneurial activities are extremely crucial for the economic well-being of almost every country. As the driving force of innovation and job creation, entrepreneurship has taken on a new level of significance in the global economy. However, certain countries lag behind others in terms of entrepreneurial activities. Differences in culture and business climate are the major factors affecting the level of entrepreneurship within a country.
The Easter holiday has passed, and as always, with its passing comes a lot of chocolate. The holidays are a great time for candy products to increase sales by offering limited edition holiday goodies. Most candy companies incorporate Easter into their products around this time of year, with the most prevalent being the bunny. What if a company could take the idea of the chocolate bunny and restrict other companies from selling it to increase their sales? For over twelve years, Swiss premium chocolate maker Lindt & Spruengli has been trying to trademark these gold-wrapped chocolate bunnies with many court cases involving different European Union members.
While Cyprus is experiencing economic woes and Turkey is finding its way out of a huge European debt crisis, the energy relationship between Cyprus and Turkey regarding gas and oil is causing stress for both countries. On Wednesday, Turkey announced the suspension of energy projects with Italian giant ENI because the company expanded the exploration for oil and gas to Cyprus. ENI’s decision on the project expansion in Cyprus has created hope of economic recovery Cyprus but it infuriated Turkey since the project would cut down the energy plan in Turkey.
The European Union gave a €10 billion rescue to Cyprus, a small island country in the European Union. It is the fourth of seventeen Eurozone states to receive a bailout by the European Union and the International Monetary Fund. In order to gain more time to convince parliament to back a new tax on deposits, Cyprus said that they would not open up their banks until Thursday the 21st of March. This controversial tax is on bank deposits and in order for it to come into effect they must have the support of parliament. Investors reacted poorly to the news as shares fell, and there was a run on cash machines over the past couple days.
United Kingdom, the financial center in Europe, has always been an attractive investment place. Because large amount of foreign buyers rushed into London’s real-estate industry, it has produced highest profits in the United Kingdom since 2011. It seems like British home sellers are never satisfied by the status quo as they raised asking prices to their highest levels in five years this month. However, the increasing price on the real-estate property did not stop foreigners from buying British homes. Instead, they invested more since they foresaw the huge potential of growing profits in the British real-estate industry.
There is currently an ongoing investigation into a food scandal in Europe involving horsemeat found in beef products. Because of the bond that horses have shared with humans as companions throughout history, eating horsemeat is considered taboo in many cultures. The issue came to light when meat that was listed as beef in supermarkets in Ireland and the U.K. was found to contain horsemeat. This scandal poses a threat to international supply chains and brings up a very important topic: how safe is the global food supply chain?
The lackluster global economy is now going on its fifth year and new information suggests that it is still a series of ebbs and flows. Economists’ predictions about the United States’ fourth quarter growth was off by over a percent and the U.S. experienced a contraction of the economy for the first time in a few years. The unemployment rate ticked up .1% to 7.9%, not the kind of news a recovering economy wants.
While the majority of European countries are experiencing the “nightmare” debt crisis, Germany is actually in an optimistic mood and is pleasant about its extraordinary trade surplus. Although Germany was hit hard initially by the global financial crisis, its exports helped the country's economy recover the by dropping unemployment to 3 million in 2012, the lowest level seen in 20 years. Its fast economy rebound left the rest of the European world in envy, and therefore triggered an argument on its role in the European Union (EU).
Economic turmoil in Europe has many concerned for the future of the Eurozone and the stability of its individual members. In need of some reform, European Union leaders congregated to enact a single banking supervisor for the union. The leaders agreed that the European Central Bank will be considered supervisor-in-chief, and this bank has intervention power over all 6,000 Eurozone banks. The plan is to have the banking union functional by the first of January so the Eurozone’s rescue fund, the European Stability Mechanism, can begin with a bang at the start of the New Year. The Stability Mechanism is essentially a firewall system for the EU, and it focuses on dealing solely with bailout applications, leaving transfer and monitoring to other European stabilizing facilities. The initial concerns of the banking union and the European Central Bank will be to rescue failing Spanish banks, and then deal with the pending Greek debt crisis. But of course, European leaders are facing opposition in regard to the new banking union decision.
Quite frankly, one involved in business would have to be living in a cave in the middle of nowhere to not be aware of Europe’s debt problems of late. There are numerous theories for how to solve this problem ranging from European Fiscal Unions and bail-out funds to thousands of different austerity measures and the fabled Grexit. Sadly, none of these theoretically viable plans have come to fruition. However, Greece has an idea that is rather unusual but could possibly solve their own debt problems (by far the worse in the EU): unpaid World War II reparations.
Work-life balance has always been a priority for employees, but not all workplaces have given it the same respect. The amount of vacation time and the number of hours employees are required to work in a week vary greatly across the world. Much of this is a result of cultural differences and tradition, but it also can greatly affect the productivity and happiness of workers. Overworked and unhappy employees can be extremely unproductive. There are many theories and methods for improving morale, but one of the simplest ones is limiting the amount of time employees are working. Sounds simple right? For many employers, it hasn’t been so easy.
While many countries depend on each other for the trade of goods and services, few would think countries could depend on each other for one of the most important resources on Earth—energy. A proposed electricity supergrid spanning across several European countries could mean not only improved power sources but also cleaner energy. Advocates of this energy plan suggest that a transnational supergrid could connect power sources like wind farms in Scotland and solar arrays in Spain to the many population centers scattered throughout Europe. The need for an expanded and upgraded power network in Europe is clear. However, the political, regulatory, and economic obstacles are formidable and will be tough to overcome.
The European Commission has accused several airlines of not following a new European law that requires them to account for their greenhouse gas emissions. Non-compliance could eventually lead to these airlines being banned from European airports. While this is not seen as very probable, it could have dire effects on world travel, the European airline market, and the global economy.
It is a fact that we live in a global world where country economies are closely intertwined. Total world trade is in the trillions, many of China's exports end up on Wal-Mart shelves, and a few months ago when the Japanese earthquake and tsunami struck the Asian country, supply chains were disrupted worldwide. Moreover, technology doesn't take a break and new innovations are presented to the market daily. Yet, the world is still in a financial crisis and the need for more world-class business leaders is growing. This in turn puts more pressure on universities to improve their business programs.
In response to decreasing domestic demand, small-to-midsize businesses in Europe are looking to export. However, many of these enterprises are finding it difficult to be globally competitive because of high labor, transport, and real estate costs. Many of these businesses produce equipment used in construction and high costs of production have led to unaffordable prices. To be successful, these companies need to find new export countries and increase their competitiveness.
Currently in Hungary, the car industry accounts for a quarter of their industrial output. Germany’s Audi has just announced an over $1 billion expansion plan which will strengthen an economy that is struggling for growth. Hungary has become a center of production for export to the rest of the EU, just like the neighbouring Czech Republic. This isn’t just a big deal because of the amount of money being put into the project, but it also shows that these plants can become increasingly important over time as they do more than just simple assembly work.
It’s hard to believe two and a half years after a global financial crisis that economies around the world can recover to pre-crisis levels. However, that is exactly where the economies of Central European countries find themselves. Countries in Central Europe have shown remarkable resilience to recover at a rather quick pace. Estonia and Slovakia are swiftly moving ahead with estimated growth rates of nearly 4 percent this year. But perhaps the most important piece in Central Europe’s recovery lies in the country of Poland.
With all the talk of the future growth of electric cars, many people might think that it will be as simple as plugging in their car next to the old refrigerator in their garage. Unfortunately, using a standard 120V outlet would take around 20 hours to charge a typical electric car. Most cars will require a 220V charging station that is connected directly to the home's circuit. Even with the shorter charging time, many batteries will only last between 25 and 100 miles. These short distances will require customers to charge their cars throughout the day and many companies are working to become the "go-to" method.
During the past year the future of the euro-zone was quite uncertain with raising debt, countries not being able to pay it off, and with many Germans feeling it was not fair for everyone to look towards the strong nation for financial help. The severe weather worsened the situation by slowing down activity and resulting in a low 0.3% growth during last quarter of 2010.
Traditionally free trade agreements and their kin are the principle agents of more competitive, efficient, and economically viable countries. However, people often look at the overall effect of FTA’s in their questioning for whether or not FTA’s should be implemented. The smaller country is usually considered the major benefactor after an FTA is implemented, but what happens when the opposite happens? There is an obvious, glaring example that is often overlooked, I myself just stumbled upon it a few days ago. Looking at Europe currently, you have the PIIGS, the countries that seem to be on the fast track to nowhere, and the rest of the Union. The idea behind the Union was that the economies could build on each other and raise the smaller less developed countries to the same standard as the U.K., France and Germany. Did this actually happen though?
Cotton prices have recently reached record highs and have begun to cause some clothing retailers problems. Many European clothing stores import their cotton from various countries in Asia, so they are often at the mercy of their suppliers. China and India are two of the top producers of cotton in the world, and they have recently undergone some industry changes that may lead to lower profit margins for their European buyers.
China has recently come under pressure from Europe for its domestic bias to companies competing for public construction contracts. While China has had to loosen the wording of laws after coming under fire before, many companies are up in arms after trying to endure some of the trials entailed in entering the Chinese economy.
The issue of euro-area governments exceeding standards for allowable debt has led to calls for tighter regulations and sanctions against nations that do not exhibit fiscal responsibility. While it is difficult for a large and diverse organization such as the European Central Bank to reach a consensus on any major policy, recent scares have opened the discussion of proposed regulatory changes.
As many travelers still feel the pinch of the recession on their wallets, a new market begs for attention as it couples the price tag of a hostel, convenience of a hotel and the homey feel of a bed and breakfast. This new way of travel accommodations is basically a social networking bed and breakfast and has expanded in the past years in Europe. Half a dozen startup companies have emerged in this market in the past two years including the likes of Crashpadder.com, iStopOver.com, ArBnB.com, and Roomorama.com. With this new market opening up, international businesses are looking to reap the rewards of this new type of traveler and hoping it will increase business abroad.
Much of Europe is heavily-reliant on Russian pipeline gas to satisfy its energy needs-- However, this could change fairly soon. Oil companies and private investors are carefully weighing the initiatives which may be set forth following the 2009 Black Sea Energy and Economic Forum. The Black Sea is home to a wealth of unconventional oil and gas resources which could possibly rival Russia in the sheer volume of output and usage.
Now-a-days, Starbucks isn’t the only place you can go to grab a cup of joe. McDonald’s McCafés can now be found all over the globe offering a multitude of delicious, caffeinated beverages. This coffee chain was created in Melbourne, Australia in 1993. Ten years later, in 2003, it grew to be the largest coffee shop brand not only in Australia, but in New Zealand too!
Mercer Consulting recently released its 2009 Quality of Living Survey, which documents the cities of the world which provide the best quality of life, based on a number of factors. The survey is partly designed to help major companies in determining where to place employees on international assignments. The 2009 list is dominated by European countries, with over 20 of the 30 countries listed being in Europe.
For many years Americans looked at
Many Europeans feel very triumphant now as Leon Brittan, who served as Home Secretary under Margaret Thatcher and was a top official at the European Commission, says that "There’s no doubt that it was a British plan that was copied by the U.S." As the financial crisis deepened, Europeans came up with a bailout plan that has set up the pace for
As gas prices remain unpredictable and other environmental issues become a greater concern, there has been much more talk about electric cars. Yes, the electric car is real! Innovations in lithium ion batteries and the materials used to make them have increased the range of electric cars and decreased the amount of time needed to recharge them.
Various municipal and university fleets now have electric cars in use, however, the problem of recharging them still remains a valid concern. What is needed is an infrastructure for recharging them on the go. The problem with this is that many investors are hesitant in investing a huge amount of money in building a widespread system of recharging units for electric cars without being sure that it would pay off. On the other hand, consumers are reluctant about buying electric cars when there is a lack of places to “fill them up." At least there is a lot more talk about electric cars now than there was a decade ago. Analysts warn though that profits are years off. They give hybrid cars as an example - hybrids have been around for years but are still not profitable.
The credit crisis that has been a major issue in the