Losses and Downgrades
In France, Peugeot Citroen announced 8,000 job cuts and the closure of a factory in Aulnay, due to a large drop in demand (23 percent since 2007) as the economic crisis drags on. The company is now losing €200 million per month. Unions responded “with fury” as well as shock and demonstrations– the Aulnay factory is the first to close in twenty years.
Moody’s cut Italy’s government bond rating down two steps to Baa2 from A3, citing contagion from the problems in the rest of the eurozone economy (specifically, a greater risk of Greece leaving the euro zone and greater credit losses among Spanish banks). Italy’s rating is now the same as that of Kazakhstan, Bulgaria and Brazil.
Could former Italian Prime Minister, 75-year-old Silvio Berlusconi, be preparing his political comeback? Italian media report that Italy’s business and entrepreneurial community are all urging him to run, after Prime Minister Mario Monti announced he would not continue in office after 2013. A senior official in the PDL Party has said that Berlusconi, despite accusations of corruption and sex scandals and resigning last year in the midst of a financial crisis, will indeed run in 2013.
Missing the Targets
Greece reported that unemployment was 22.5 percent in April. The International Monetary Fund (IMF) announced that the Greek government is behind in a number of areas in implementing the policies agreed upon in exchange for bailout funds. In other words, no renegotiation of the terms of the bailout package, something that Greece’s leaders have frequently mentioned, seems likely.
China Slows Down
Due to decreased demand in Europe and the US, China’s economic growth has slowed down the most in three years, with its GDP increasing at a rate of 7.6 percent in the second quarter as compared with the previous year and with the previous three months, when it was 8.1 percent. China’s foreign exchange reserves for June were $3.24 trillion, lower than the expected $3.35 million.
No Easing From the Fed
The US economy seems to be somewhat hanging on (not that anyone here would exactly say that) with the number of people signing on for unemployment falling by 26,000, to a four-year low of 350,000.
Photo by .v1ctor.
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