Morning papers: Dutch may break rules on Europe pact
The Netherlands, one of the eurozone’s “hardliners” on financial discipline, has the “same problems as Italy and Spain” and is on track to break Europe’s three-week old fiscal pact, its own officials have warned, reports the Daily Telegraph.
The Netherlands Bureau for Economic Policy Analysis (CPB) said the country’s budget deficit could increase to 4.6 per cent of GDP during this year and next year - a level that far exceeds the 3 per cent ratio that 25 European Union countries pledged to meet by next year.
Europe faces ‘long, hard road’ to recovery, US treasury secretary says
Europe is only at the beginning of a “very tough, very long, hard road” to recovery and its future is still a threat to the US economy, Timothy Geithner, the US treasury secretary, warned on Tuesday, reports the Guardian.
In testimony to the House financial services committee on the state of the international financial system, Mr Geithner warned against draconian spending cuts by heavily indebted countries and called on better-off European countries to help their neighbours.
Recovery in Britain will remain ‘slow and painful’, leading Bank of England official warns
The recovery in Britain will remain “slow and painful” with “enormous personal and social costs”, a leading Bank of England official warned last night, reports the Daily Mail.
Spencer Dale, the central bank’s chief economist, said the UK faces a “challenging journey” after years of debt-fuelled spending.
Gilt sales expected to rise
Bond sales by the UK government are tipped to rise to their second-highest level on record in the 2012-13 fiscal year despite signs of progress in cutting the budget deficit, as the government has to refinance a greater number of bonds falling due, reports the Wall Street Journal.
The increase in issuance gilts may push up borrowing costs and impair efforts to mend finances.
Saudi oil minister calls high oil prices ‘unjustified’
Saudi Arabia’s powerful oil minister, Ali Naimi, made a rare intervention into overheating oil markets on Tuesday, declaring that high oil prices were “unjustified” and vowing that the kingdom would boost its output by as much as 25 per cent if necessary, reports the Financial Times.
IMF sees $160 oil risk despite Libyan boost
Libya’s oil exports have rebounded much faster than expected and will exceed pre-Arab Spring levels as soon as April, plugging a crucial gap in world crude supply as the Iranian crisis comes to the boil, reports the Daily Telegraph.
However, Christine Lagarde, the head of the International Monetary Fund, has warned over recent days that high oil prices risk choking global recovery before a fresh cycle of growth is safely underway.
Up to 40% of high street shops ‘could close over next five years’