Europe Round Up - German Parliament Backs Bailout

(RTTNews) - Friday, the week closed in Europe with news that lawmakers had approved a bailout for banks in Eurozone’s largest economy.

The German parliament approved EUR 500 billion-bailout package for banks. President Horst Koehler is expected to sign the bill soon, when the proposal will be made into a law, which is expected to come into effect ahead of the financial market opening on October 20. The government headed by Chancellor Angela Merkel had announced the package on October 13. The announcement came after EU leaders agreed to take measures to lessen the impact of the financial crisis and boost confidence in financial markets. The package consists of EUR 400 billion in loan guarantees, EUR 80 billion for recapitalizing troubled banks as well as taking over their risky assets. Further, EUR 20 billion is set aside to cover loses from loans.

The recent intensification of the financial market crisis has affected the outlook for economic growth and price stability in the euro area, the Executive Board member of the European Central Bank, Josï¿½ Manuel Gonzalez-Paramo said in a speech late Thursday. He added that the current crisis increases downside risks to growth and at the same time, it diminishes the upside risks to price stability and bring inflation expectations back to levels consistent with price stability.

Eurozone recorded higher than expected trade deficit in August due to a surge in imports, the Eurostat said. According to the official report, the 15-nation economy recorded a trade deficit of EUR 9.3 billion in August, increasing from July’s revised deficit of EUR 2 billion. Economists had expected a deficit of EUR 5.5 billion for August. At the same time, the statistical office revised July’s deficit from EUR 2.3 billion.

Additionally, the Eurostat said the construction output in the Eurozone grew a seasonally adjusted 0.1% month-on-month in August, unchanged from the rise in July. On a yearly basis, construction output was down 2.5% in August.

Italy’s industrial orders declined 5.2% year-on-year in August, reversing a 5.5% growth recorded in July, the statistical office ISTAT said. Economists had expected a 2.3% fall for August. Domestic orders declined 0.5% and foreign orders slumped 12.8%. At the same time, industrial turnover declined 11% on an annual basis.

Spain’s National Statistics Institute said in a report that industrial orders declined 6.6% year-on-year in August, reversing a 7.6% rise recorded in July. At the same time, the statistical office reported industrial turnover fell 4.3% in August from the previous year. In July, the Spanish industrial turnover was up 6.2%.

A report from Statistics Finland showed the producer price annual inflation for manufacturing products stabilized at 5.4% in September compared with August. Statistics Finland also announced that the producer prices for services increased 5.2% year-over-year in the July to September period, marking the same pace as seen in the April to June period.

The Statistical Service of the Republic of Cyprus said the tourist arrivals declined 3.2% year-on-year in September. Separately, the statistical agency said the retail sales turnover value rose 11.3% month-on-month in July compared with a revised 3.5% growth in June.

Poland’s Central Statistical Office announced that industrial producer prices, or PPI, increased 2.1% year-over-year in September, after rising 2% in August. Separately the statistical office said, Poland’s industrial production increased 7% year-on-year, while it climbed 17.4% on a monthly basis.

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