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Woman of the week |
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Cannes President
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Talented Isabelle has been appointed as the president of the Cannes jury for 2009. She is the fourth woman to head this committee...
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Today's Celebrity |
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Producer Jessica Biel
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Jessica Biel’s co-production ‘Hole in the Paper Sky’ is set to release in Australia. This actress who wore the producers cap for the first time, loved hopping around the sets making coffee for the crew.
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Is Euro Economy in a Recession?
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Written By:
Vivek Sharma
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It has been officially announced that the economy in the 15 countries that use the euro may already be in a recession and will barely grow next year, expanding just 0.1 percent as the financial crisis hits hard. It has been predicted that the currency zone’s largest economies will come to a standstill or shrink next year, with Germany, France and Italy not growing at all at 0.0 percent. Moreover, Ireland and Spain will see output fall and jobless lines and government deficits swell, the EU executive said.
According to the business week magazines, among EU members that don’t use the euro, Britain’s economy will slip into recession with minus 1 percent growth, while Baltic States Estonia and Latvia will also see negative growth. Experts feel that the euro economy may already be experiencing a technical recession by shrinking for two quarters in a row, the EU warned. It is also predicted that negative quarterly growth is 0.1 percent in the third and fourth quarter, after contracting 0.2 percent in the second quarter.
To combat this recession, all the EU finance ministers head towards meeting, to coordinate on a recovery plan similar to a program for the banking sector agreed by EU nations last month. Sources quoted that they need a common action to help the recovery. They need investments, as this is the weakest element of our internal demand. Furthermore, Germany is expected to set out a program of public spending and tax breaks to boost investment and create jobs and France has called for industry to receive state help to ride out the slowdown.
Online business magazines have warned that things may get even worse as forecasters could not rule out a deeper credit crunch that would break the economy, strain government finances and put a near-freeze on household spending. Moreover, even slightly higher costs for borrowing and an extra risk premium of 0.5 percent on interest rates would simply tighten credit available to households. It could trigger an outright recession, a decline of 1 percent of GDP in the euro area.
The EU forecast that the labor market should deteriorate sharply next year, with unemployment in the euro-zone climbing to 8.4 percent in 2009 from a decade-low of 7 percent at the end of 2007. This will see an extra 2 million people out of work in the euro area. Spain might see the worst of this as a housing bubble bursts and tourism slows. The jobless rate may shoot up to 15.5 percent in 2010 from 10.8 percent this year, the EU says.
EU economists said the outlook for the euro area and the wider 27-nation European Union “remains bleak” with growth only recovering gradually toward the end of next year as exports start to pick up. It is also anticipated that the euro area will grow 1.2 percent for the entire year, 0.1 percent next year and 0.9 percent in 2010. It forecast EU gross domestic product this year at 1.4 percent, falling to 0.2 percent in 2009 and 1.1 percent in 2010. Let’s keep our fingers crossed and hope for the best.
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Send Your Query
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Posted :
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04 Nov 2008
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