Morning papers: Brussels pushes for wide ECB powers
The headlines brought to you by Investment Adviser: Friday, August 31 2012.
The European Central Bank (ECB) would be given sweeping authority over all 6,000 eurozone banks under a plan being drawn up by the European Commission, putting Brussels on a collision course with Germany and the ECB itself, which have urged a more decentralised first step towards “banking union”, reports the Financial Times.
The plan, agreed at a meeting this week between top aides to José Manuel Barroso, commission president, and Michel Barnier, the EU’s senior financial regulator, would strip existing national supervisors of almost all authority to shut down or restructure their countries’ failing banks, giving those powers to Frankfurt.
‘Get some backbone’ Osborne urged as CBI and BCC slash growth forecasts
Business has called on ministers “to get some political backbone and show some leadership”, as the two largest industry lobby groups - the CBI and BCC - slashed their growth forecasts for the year, rounded on the government for failing to kick-start the economy, and warned the chancellor that he may miss his deficit reduction goals, reports The Daily Telegraph.
Ministers are wasting easy opportunities to lift growth, leaving businesses “frustrated” with the lack of action, the CBI said as it predicted that GDP would shrink by 0.3 per cent this year – sharply lower than its outlook in May for 0.6 per cent growth. Demanding “swift action”, the British Chambers of Commerce (BCC) also cut its 2012 forecast, from 0.1 per cent growth to a contraction of 0.4 per cent.
Judgment days arrive for euro crisis
After an uncharacteristically calm August, European policy makers and financial markets are facing a tumultuous autumn marked by major showdowns in key eurozone battlegrounds, reports The Wall Street Journal.
For years, policy makers have wondered what would happen if a large eurozone country, like Spain, was unable to borrow money in large quantities. Now they are edging closer to finding out. Demand for Spanish bonds is wilting fast, and Spain must issue billions more to cover its deficits and repay old debt coming due in October.
China’s fears grow over eurozone crisis
China has expressed deep alarm at the escalating crisis in Europe and warned against austerity overkill as Europe’s crumbling demand sends shock waves through Asia, reports The Daily Telegraph.
Premier Wen Jiabao told German chancellor Angela Merkel that Europe must “strike a balance” between fiscal tightening and measures to promote growth. “Europe’s debt crisis has continued to worsen, giving rise to serious concerns in the international community. Frankly, I am also worried,” he said.
Shoppers regain taste for sweets and sewing
JJB Sports is not alone in its troubles. Independent sports shops are also disappearing from Britain’s high streets while specialist hobby stores selling craft materials and musical instruments and old fashioned sweet shops are making a comeback.