The government has
been accused of underfunding R&D, making it harder for Italy to
compete with other European nations and leading to a "brain-drain" of
the country's brightest talents.
Analysts say that
hiring and firing staff is still too difficult and expensive,
hampering the development of small and medium-sized businesses.
As a result, they
say, Italy's corporate landscape is filled with numerous smaller
companies that are often reluctant to become bigger because of all the
extra hassle that would accompany the running of a larger firm.
At the same time,
bankruptcy laws make it difficult for failed company directors to set
up new businesses and emerge from their debts, a situation that is
hampering Italy's entrepreneurial spirit.
says that it has set about tackling the problems, adding that getting
growth going was the responsibility of all of Italy's 60 million
GERMAN BUSINESS CONFIDENCE SLIDES
confidence fell in February knocking hopes of a speedy recovery in
Europe's largest economy.
research institute Ifo said that its confidence index fell to 95.5 in
February from 97.5 in January, its first decline in three months.
The study found
that the outlook in both the manufacturing and retail sectors had
Observers had been
hoping that a more confident business sector would signal that
economic activity was picking up.
that the Ifo index has taken such a knock," said DZ bank economist
"The main reason
is probably that the domestic economy is still weak, particularly in
the retail trade."
Economy and Labour
Minister Wolfgang Clement called the dip in February's Ifo confidence
figure "a very mild decline".
He said that
despite the retreat, the index remained at a relatively high level and
that he expected "a modest economic upswing" to continue.
grew 1.6% last year after shrinking in 2003.
economy contracted by 0.2% during the last three months of 2004,
mainly due to the reluctance of consumers to spend.
are that growth is still proving elusive and Ifo president Hans-Werner
Sinn said any improvement in German domestic demand was sluggish.
Exports had kept
things going during the first half of 2004, but demand for exports was
then hit as the value of the euro hit record levels making German
products less competitive overseas.
ASIAN BANKS HALT DOLLAR'S SLIDE
regained some lost ground against most major currencies Feb 23 after
South Korea and Japan denied they were planning a sell-off.
suffered its biggest one-day fall in four months day earlier on fears
that Asian central banks were about to lower their reserves of
Japan is the
biggest holder of dollar reserves in the world, with South Korea the
The dollar was
buying 104.76 yen at 0950 GMT, 0.5% stronger on the day. It also edged
higher against both the euro and the pound, with one euro worth
$1.3218, and one pound buying $1.9094.
rising oil prices and the outlook for the dollar pushed down US stock
markets on Feb 22; the Dow Jones industrial average closed down 1.6%,
while the Nasdaq lost 1.3%.
BUSH MAKES FINAL STOP FOR PUTIN
George W Bush has arrived in Slovakia ahead of a summit with his
Russian counterpart on the last leg of his fence-mending European
During a visit to
Germany, Bush and German Chancellor Gerhard Schroeder agreed to put
aside their differences over Iraq.
They also united
in calling for Iran not to develop nuclear weapons. Moscow's close
ties with Iran are expected to be addressed by Bush when he meets
President Vladimir Putin.
He is also
expected to discuss US concerns about democracy in Russia, following
the Yukos affair, media clampdowns and alleged interfering in the
Ukraine elections. Bush said he had been told of concerns about Russia
by other EU leaders during his talks in Brussels.
NEWEST EU MEMBERS UNDERPIN GROWTH
Union's newest members will bolster Europe's economic growth in 2005,
according to a new report.
The eight central
European states which joined the EU last year will see 4.6% growth,
the United Nations Economic Commission for Europe (UNECE) said.
In contrast, the
12 eurozone countries will put in a "lacklustre" performance,
generating growth of only 1.8%.
The global economy
will slow in 2005, the UNECE forecasts, due to widespread weakness in
It warned that
growth could also be threatened by attempts to reduce the United
States' huge current account deficit which, in turn, might lead to
significant volatility in exchange rates.
forecasting average economic growth of 2.2% across the European Union
output across the Euro zone is forecast to fall in 2004 from 1.9% to
FRENCH CONSUMER SPENDING RISING
increased their spending by 1.5% in January, a figure which bodes well
for the country's economic growth, figures revealed.
Statistic Institute (INSEE) added that consumer spending in January
rose 3.8% on a year-on-year basis.
Rising sales of
household equipment were behind the increase.
The INSEE also
said that French consumer prices fell 0.6% in January, but were up
1.6% on an annual basis.
general increase in spending in January, French households bought
fewer cars in January.
According to the
INSEE, car sales fell 2.8% in January, following a fall of 0.6% in
December. But on a year-on-year basis, the sector still saw a sales
increase of 6.5%.
fuelled France's economic growth in the last quarter of 2004 and
analysts expect that it will continue to support the economy.
BAD WEATHER DAMPENS NESTLE SALES
A combination of
bad weather, rising raw material costs and the sluggish European
economy has hit sales at Swiss food and drink giant Nestle.
1.4% to 86.7bn Swiss francs ($74.6bn; £39.1bn) in 2004 as sales of ice
cream and mineral water were dampened by the wet summer.
RYANAIR IN $4BN BOEING PLANE DEAL
Ryanair has placed an order for 70 Boeing 737-800 planes, in a deal
valued at $4bn (£2.1bn) which should lead to 2,500 new Ryanair jobs.
It also has an
option for a further 70 aircraft, a move which brings the Ryanair/Boeing
order book up to 225 firm orders and options on 193 more.
GOOGLE AND YAHOO SEE RATINGS CUT
Shares in search
engine companies Google and Yahoo fell in the US markets on Feb 24
after RBC Capital Markets cut its ratings on the companies.
also entered the field as AOL, the search engine and email service
owned by Time Warner, launched a local search service.
Google shares fell
6%, but recovered to close down 2.6%, or $5.06, at $188.89 on the
Nasdaq. Yahoo dipped 5.6% initially but closed just 2% lower at $31.48
on the Nasdaq.
FED WARNS OF YET MORE RATE RISES
US interest rates
look set to keep rising after the Federal Reserve said the current
2.5% level may be too low to keep inflation in check.
The comments came
in recent release of the minutes from the last Fed rates meeting on
February 1 and 2.
Although at that
meeting the Fed voted to raise rates by 0.25% to 2.5%, it said they
may have to continue to rise, at least over the medium term.
SA UNVEILS 'MORE FOR ALL' BUDGET
The South African
government has put tax cuts and increased social spending at the
centre of its latest budget.
Aiming to both
stir economic growth and aid the country's poor, finance minister
Trevor Manuel said the focus of the 2005 budget was "more for all".
The tax cuts
target firms and individuals, cutting corporate tax from 30% to 29%
and offering income tax cuts worth 6.8bn rand ($1.2bn; £910m).
Spending on health
and education will rise by 9.4% and 8.1% respectively.
housing and sanitation will rise by 12%. All the spending increases
will run over the next three years.
ORE COSTS HIT GLOBAL STEEL FIRMS
Shares in steel
firms have dropped worldwide amid concerns that higher iron ore costs
will hit profit growth.
Germany's ThyssenKrupp, the UK's Corus and France's Arcleor fell while
Japan's Nippon Steel slid after it agreed to pay 72% more for iron
Iron and Steel Co. said it was delaying a share sale because of weak
market conditions, adding it would raise steel prices to offset ore
BOE VOTED 8-1 FOR NO RATE CHANGE
The decision to
keep interest rates on hold at 4.75% earlier this month was passed 8-1
by the Bank of England's rate-setting body, latest minutes have shown.
One member of the
Bank's Monetary Policy Committee (MPC) — Paul Tucker — voted to raise
rates to 5%.
BROWN ANNOUNCES BUDGET DATE
Brown will deliver his budget to the House of Commons on March 16, the
Treasury has announced.
The budget, likely
to be the last before the General Election. The annual event is when
the chancellor outlines the government's taxation and broader economic
INDIA AND RUSSIA IN ENERGY TALKS
India and Russia
are to work together in a series of energy deals, part of a pact which
could see India invest up to $20bn in oil and gas projects.
On the agenda are
oil and gas extraction as well as transportation deals, to be led by
Russian energy giant Gazprom and India's ONGC.
BROWN CALLS FOR CHINA PARTNERSHIP
The rise of China
as an economic power should be seen as an opportunity not a threat,
Gordon Brown has said in a keynote speech in Beijing.
between China and the industrialised nations is vital, the UK
chancellor said on his first visit to the world's most populous
nation. He also pushed for a shared agenda in facing global economic
challenges. After meeting Chinese premier Wen Jiabao, Brown urged
China to ease its currency peg to the US dollar.
US DATA SPARK INFLATION WORRIES
in the US rose at the fastest rate in more than six years in January,
according to government data.
New figures show
the Labor Department producer price index (PPI) rose by 0.3% - in line
But core producer
prices, which exclude food and energy costs, surged by 0.8%, the
biggest rise since December 1998, increasing inflationary concerns.
In contrast, the
University of Michigan barometer of US retail consumer confidence
showed a slight dip.
index of consumer spending fell to 94.2 in early February from 95.5 in
January, which could indicate a fall in retail spending by the US
public. The mixed set of data last week led to volatile early Wall
Street trade, as the Dow Jones, Standard and Poor's 500, and Nasdaq
swung between positive and negative territory.
LATIN AMERICA SEES STRONG GROWTH
Some of the main
economies in Latin America have posted better-than-expected economic
Argentina and Mexico confirmed growth of 17.3%, 8.8% and 4.4%
respectively for 2004 while at 5% Peru saw its strongest growth since
Growth was based
on strong exports, fuelled by demand for commodities, especially in
the US and China. Forecasts are for strong growth in 2005, if global
demand stays strong.
to see GDP growth of 5.5% in 2005 while Peru, Mexico and Venezuela
forecast growth rates of 4.5%, 4.8% and 5% for 2005.