Eurozone And The World Update 2013 Q1
Eurozone’s Financial Stability
The Eurozone entered the year 2013 with an inflation rate of 2.0 percent and by the end of March the inflation rate of the entire area fell to 1.7 percent. This has been the lowest rate of inflation the Eurozone has experienced since August 2010, and with lesser inflationary pressure brought by an increase in wages and lessening pressures in the price of food, most of the banks of the nations under the single currency have started to consider lowering their rates. This, however, did not stop the increase in unemployment, as Eurozone has its record high unemployment rate of 12.0 for this quarter. Many of its member countries are still in trouble – we’ll get to that later – though there are some already progressing up following the lessening inflationary pressure. Prices in various sectors have gone up – such as in consumer foods and in energy – and in balance prices have gone down – for services and factory goods.
The Mediterranean country has experienced a record high in unemployment early first quarter (January 2013), from 25.7% in December 2012 to 27.2%. This meant that over 200,000 Grecians by the first month of January 2013 do not or no longer have jobs. But on the other hand, Greece was able to cut its deficit by over 1.4 billion Euros and managed to make its budget targets for the first quarter. The country is now gearing up for tourism as there is no longer that threat of a Grexit following the budget surplus, in hopes that the influx of tourists expected for this year will bring the country out of recession. International creditors such as the European Commission, the European Central Bank and the International Monetary fund forecast that, if the current conditions and reforms are being maintained, Greece would be able to return to growth gradually by 2014.
Racist attacks have been increasing in the country since last year – after three Grecian foremen opened fire on their Bangladeshi workers in a strawberry farm after said workers demand their six months back pay, the figures for racism attacks of 2012 were released.
In the first quarter of 2013, Italy has experienced lowering inflation rates from 2.2 to 1.91 to 1.6 in the months January, February and March, respectively. But even with this decrease, many are still struggling with increasing prices of imports and consumer goods, as unemployment reach an all time high in January, and barely going down in February. Though with their current standing, Italy can now request for a leeway in their budget deficit. Reform proposals have been made, but as parties in the Italian government are unwilling to cooperate, the country remains at a standstill. The leadership has been questioned for the creation of the committee creating the reforms – as the members of this committee aren’t authorized to make decisions, but the deadlock end soon as a new prime minister has been put into office. Enrico Letta, the new Italian Prime Minister, has said that the austerity measures are no longer enough and he was willing to work with his rivals for reforms.
Because of the ongoing economic crisis, even the younger generation are being affected, as United Nations Children Fund or UNICEF, released a report suggesting that 17 percent of Italian children, or roughly 2 million children are living in poverty and almost had nothing for their needs. An Italian couple committed suicide after struggling with their economic situation. It turned to a triple suicide when the woman’s brother threw himself to sea upon hearing the news. Italians found a way to alleviate their food problems by making their own bread at home.
Pope Benedict XVI announced his resignation, set on February 28, 2013, stating his advancing age as reason for retiring. By March 13, 2013, after 4th unsuccessful ballot, his successor, Cardinal Jorge Mario Bergoglio, an Argentinian, took over his position and took on the name Pope Francis.
The number of unemployed in Spain reaches 6 million as its unemployment rate increases to 27.2 for the first three months of 2013, increasing from 25.02 to 26.02 from the previous months. This increasing unemployment rate is said to have been caused by the austerity measures being imposed on the country. Spain’s inflation rate has fluctuated during the first quarter, from 2.68 in January, to 2.75 in February, then lowering down to 2.4 in March. If this decrease continues, this could help Spain exit recession.
Because of the financial crisis the country is facing, along with the austerity measures being imposed, among other things, protests have been occurring in Spain for around 2 years now, the latest held in Madrid amidst Spain’s economic predicament. The protest coincides with the government spending cuts and the record high employment.
With the government responding to the crisis by imposing budget cuts on welfare benefits, many Spanish people find themselves evicted from their homes after failing to pay rents and mortgages, giving rise to squatters and corralas.
The United Kingdom managed to dodge a triple-dip recession for the first quarter of 2013 as its services sector grew. The country’s economy has been contracting and is in recession during the first few months of 2013. But despite the improving economy, unemployment rate has risen within the first quarter, from 7.8 to 7.9 and the inflation rate steadily increasing from 2.7 to 2.8 within said quarter. Coupled with decrease in output in the manufacturing and construction sectors, the economy is still struggling to achieve sustained growth.
Bank lending is expected to increase this year, after the Treasury and Bank of England provided a lending scheme for struggling small businesses, with a funding of £80bn.
An outbreak of measles has been reported in Wales, with over 1000 cases recorded since the start of the outbreak.
For the first quarter of 2013, the United States of America’s GDP grew at a rate of 2.5%. This increase is contributed by increase in consumer spending, which contributes for more than two-thirds of the economy, by 3.2%. It has been slowly but steadily increasing ever since it got out of recession last 2009. However, its growth was lesser than expected – this was caused by several drops or slow growth of some sectors, such as the decline of savings when disposable income decreases and the rise in prices of important goods and commodities such as gasoline.
By late first quarter, President Barack Obama signed an order that puts sequester into effect. Sequester are across-the-board budget cuts, cutting around $85bn from various sectors, the bulk of the cuts coming from the defense and social spending. This could potentially slow down growth for the second quarter of 2013 and cut off benefits from middle to lower class citizens working or under said sectors. The effect of the sequester is being felt not only by the sectors whose budgets are being cut off, but also those interacting directly with these sectors.
From All Around The World
The Syrian civil war has claimed over 70,000 lives since it started back in 2011, with 6,000 within March 2013 alone. Attempts to bring over humanitarian aid to those stuck between the fighting factions over the crossfire are getting difficult.
Egyptian protests in Port Said has taken 48 lives. More are injured as the protests progress since its start in 2011, and further escalates after the Egyptian President Mohamed Morsi granted himself the power to legislate without judicial review, coupled with police brutality upon breaking protests.
Last February 12, 2013, North Korea conducted its underground nuclear test. The United Nations Security Council has unanimously approved sanctions to be imposed on North Korea after its nuclear test, to which North Korea promised a pre-emptive nuclear strike against the United States.
Weather Disturbances, Climate Change and Disasters
Bush fires, heat waves and flooding that has been occurring in Australia are predicted to become worse in the following years. Many attribute intensifying disasters to climate change – as the current and previous year hold the record for the highest recorded summer, hottest month and day. Government agencies are now prompting citizens to prepare for extreme climate.
Last February 15, a meteorite entered the Earth’s atmosphere and lands all over Russia, injuring over a thousand people. The meteorite created a sonic blast, damaging buildings and breaking glass and doors – which caused injuries.