Thursday, November 14, 2013

Eurozone recovery falters; Ireland to exit bailout without safety net; Lockheed Martin axing 4,000 jobs; Barclays to cut 1,700 UK jobs; Amazon deforestation up 28%



1 Eurozone recovery falters (Phillip Inman in The Guardian) The eurozone's economic woes persisted in the third quarter as Italy's longest recession continued and a contraction in French output dragged growth down to 0.1%. In the summer, hopes of a strong recovery were boosted by a second-quarter GDP rise of 0.3%, but the momentum of the first half of the year has fizzled out. The figures gave weight to fears that high unemployment, low inflation and disagreements among political leaders over further moves towards integration will keep the currency zone locked into a prolonged period of low growth.

In France, a slump in exports and business investment failed to offset strong consumer spending to leave François Hollande's socialist administration to cope with a 0.1% decline in GDP. Italy, which has faced prolonged period of political instability, was also mired in economic gloom after a 0.1% decline in GDP in the third quarter extended the country's recession from the summer of 2011 to nine quarters.

Of the smaller eurozone members, Austria returned to growth after a flat summer period with a 0.2% rise in GDP, while the Netherlands, which also flatlined in the summer, nudge 0.1% higher and Finland managed a 0.4% expansion. German growth fell from 0.7% in the second quarter to 0.3%, though several analysts said the eurozone's powerhouse economy was merely returning to its expected annualised rate of 1.2% a year.

http://www.theguardian.com/business/2013/nov/14/eurozone-economic-recovery-falters-third-quarter

2 Ireland to exit bailout without safety net (Stephen Castle in The New York Times) Ireland announced on Thursday that it would make a clean break from its international bailout program next month and do it without first seeking a precautionary credit line. Ireland would become the first of four euro zone bailout nations to end its reliance on huge loans made during the worst months of the debt crisis. Ireland’s bailout program will have totalled 67.5 billion euros or $91 billion.

Ireland is seen as the best-performing of the four bailed-out economies; the others are Greece, Portugal and Cyprus. Its return to economic normalcy is an important psychological moment for Europe’s single-currency zone, which is spasmodically emerging from its near-death experience. Ireland’s decision to improvise without a prearranged credit line from international lenders was seen as especially daring given Europe’s shaky economic stance. 

Ireland’s banks are still laboring under a mountain of bad debt incurred during the property boom that preceded the country’s economic crash, and extra capital may still be needed. But a credit line might have come with conditions attached, and the Irish government said that it was confident it could manage a full return to economic sovereignty without the need for a special credit line. The interest rates on its sovereign debt are low and public finances under control, it added. 

http://www.nytimes.com/2013/11/15/business/international/ireland-to-end-reliance-on-bailout-lifeline.html?ref=business&_r=0

3 Lockheed Martin to cut 4,000 jobs (The New York Times) Lockheed Martin is cutting 4,000 jobs, about 3.5 percent of its workforce, as the defense contractor continues to look for ways to lower costs amid reduced government spending. "In the face of government budget cuts and an increasingly complex global security landscape, these actions are necessary for the future of our business," CEO Marilyn Hewson said in a statement.

Across-the-board spending cuts by the federal government have helped trim US budget deficits. Budget negotiators in Congress are holding talks centered on find ways to cut spending and tax breaks to replace the automatic cuts that started earlier this year that are slamming the Pentagon and domestic agencies. Lockheed Martin Corp., maker of Patriot missile defense system and the F-35 and F-16 fighter planes, will close plants in Goodyear, Ariz.; Akron, Ohio; Newtown, Pa.; and Horizon City, Texas; as well as four buildings at its Sunnyvale, Calif. campus, by mid-2015, eliminating 2,000 jobs. 

Another 2,000 positions will be cut in its information systems and global solutions, mission system and training, and space systems units by 2014's end. Lockheed Martin said it has cut its workforce to 116,000 employees from 146,000 since 2008. 

http://www.nytimes.com/aponline/2013/11/14/us/ap-us-lockheed-martin-jobs.html?ref=business

4 Barclays to shed 1,700 jobs (BBC) Barclays is to cut 1,700 jobs from across its branch network in the UK, the bank has announced. The cuts come as it scales back the number of branches across the country. Barclays said in a statement that the way people accessed banking services was changing rapidly, with more using smart phones and other technology. Barclays has 1,577 branches employing 33,600 staff.

The Unite union, which represents some bank staff, said customer service could suffer as result of the cuts and said Barclays was making a "colossal mistake" . The jobs going are equivalent to one staff member per branch, Barclays said, and will involve a host of frontline roles including cashiers, personal bankers, operational specialists, and branch and assistant managers. They will be rolled out through 2014. 

http://www.bbc.co.uk/news/business-24947774

5 Amazon deforestation up 28% (BBC) Brazil says the rate of deforestation in the Amazon increased by 28% between August 2012 and last July, after years of decline. The government is working to reverse this "crime", Environment Minister Izabella Teixeira said. Activists have blamed the increase in destruction on a controversial reform to Brazil's forest protection law. Last year Brazil reported the lowest rate of deforestation in the Amazon since monitoring began. 

The provisional statistics from August 2012 to last July suggest that the area suffering deforestation was 5,843 sq km (2,255 sq miles), compared to 4,571 sq km (1,765 sq miles) in the previous 12 months. Despite the interruption of the decline sequence started in 2009, the latest deforested area still remains the second lowest ever recorded. The result frustrated the government's expectations, but several scientific institutions had suggested increases in their monthly deforestation reports.

Environmentalists say the controversial reform of the forest protection law in 2012 is to blame for the upwards trend. The changes reduced protected areas in farms and declared an amnesty for areas destroyed before 2008. The reform, a long-standing demand of the country's farmers' lobby, known as the ruralists, was passed after several vetoes by President Dilma Rousseff. Agriculture accounts for more than 5% of the Brazilian GDP. "If you sleep with the ruralist lobby, you wake up with deforestation," Amazon expert Paulo Adario from Greenpeace wrote on Twitter.

The majority of Brazil's greenhouse gas emissions, believed to be one of the main causes of global warming, stem from deforestation. The Brazilian government made a commitment in 2009 to reduce deforestation in the Amazon by 80% by the year 2020, in relation to the average between 1996 and 2005.

http://www.bbc.co.uk/news/world-latin-america-24950487

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